Having strong policies and procedures in place isn’t enough – they must be tested, and they must work. That remains a central compliance message.
The U.S. Department of Justice (DOJ) clarified this through policy pronouncements in 2019, and many companies have confirmed that program implementation is a focus for 2020. Fittingly, for this Global Bribery and Corruption Outlook, we asked a number of clients to talk about compliance concerns in their industries.
Know your industry
We cover energy, automotive, life sciences, financial institutions, diversified industrials, and technology, media, and telecoms. Bribery and corruption risk in these industries, picked for the lessons they offer, often involves one or more triggers. Examples include emerging markets, global supply chains, competitive pressures, and so on. These triggers affect other industries as well. But despite similarities, not every business has the same bribery and corruption risk, which is why we recommend your compliance program is relevant to the risks you face. There’s no one-size-fits-all approach.
Cooperate with authorities
Briefly, DOJ has reaffirmed that due diligence and compliance integration are vital in M&A. It encourages companies to self-disclose if they find misconduct. Germany, with a new draft law on corporate sanctions, plans to introduce monitorships and compliance systems audits, to catch offenses committed abroad, to extend liability of legal successors, and more. And the French Anti-Corruption Agency (Agence Française Anticorruption), in January 2020, issued a practical guide on anti-corruption audits in M&A. It explains how and when to audit.
Beware of enforcement activity
The U.S. Federal Bureau of Investigation announced a new Miami-based international corruption squad last year and is focusing on Latin America. Meanwhile, authorities in the region continue to work closely with other U.S. enforcement agencies. In South East Asia, governments have enacted new laws in Vietnam and Malaysia. Meanwhile, Indonesia’s Corruption Court sentenced the first company for corruption crimes. And in the European Union, a new directive sets minimum standards to protect whistleblowers. For example, it bans retaliation and intimidation against whistleblowers and people who help them.
Abide by the law (or come clean)
Under Germany’s draft law, generally, companies aren’t obliged to cooperate, but sanctions may be reduced if a company waives attorney-client privilege in an internal investigation. In contrast, not cooperating can often result in dawn raids.
Companies under both antitrust and anti-corruption investigations in the European Union and the United States may find themselves caught out by differing approaches of antitrust and anti-corruption regulators. While cooperation is essential for antitrust leniency, the same does not apply across the board in anti-corruption regimes.
Lead with culture
Culture and the tone from the top matter most in managing bribery and corruption risk. With a bird’s-eye view, senior and middle management are uniquely well placed to lead in this area. In its guide to countering financial crime, the UK Financial Conduct Authority (FCA) says it expects senior managers to take responsibility for managing risks. The FCA also suggests internal audits to monitor firms’ systems and controls. In addition, one approach we use in South East Asia, for example, is to adapt global compliance policies to the quirks of local cultures, customs, and sensitivities.
For more on anti-bribery and corruption (ABC) from our Investigations, White Collar, and Fraud practice, visit our ABC Portal.