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Fcpa blog tour bogota v3

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  • 1.
  • 2. High-VelocityEnforcement
  • 3. DOJ / SEC Matters Initiated | 2002 - 2010
  • 4. Total Criminal and Civil Penalties
    Imposed on Corporations | 2002 - 2010
  • 5. WhatHas Not Changed?
  • 6. Photo © Edgar de Evia
    WhatHasChanged?
  • 7.
  • 8. Total Criminal and Civil Penalties
    Imposed on Corporations | 2002 - 2010
  • 9. Current Enforcement Picture
    Legal Elements of the Offense
    UK Bribery Act Effective Date
    Designing and Implementing a Compliance Program
    Third Party Agents and Due Diligence
    Overview
    9
    9
  • 10. 10
    CurrentEnforcementPicture
  • 11. FCPA Global Enforcement Trends
    11
    Corporate mega fines fueled by voluntary disclosure process.
    DOJ has dedicated additional prosecutors to FCPA cases.
    FBI has dedicated FCPA squad.
    Obama administration is continuing focus on FCPA prosecutions.
    FBI is using aggressive investigative tactics.
    DOJ is increasing use of industry-wide investigations.
  • 12. FCPA Enforcement in Latin and Central America
    12
    US Department of Justice is increasing prosecution of non-US corporations and individuals in United States Courts.
    In 2010, 70 percent of the companies prosecuted for criminal FCPA violations were foreign companies
    Many of the criminal cases involve corruption in Latin and Central America, particularly Brazil, Mexico, Venezuela, and Argentina.
    US Department of Justice is increasing coordination with Latin and Central America enforcement agencies
  • 13. Increase in FCPA Enforcement Actions
    13
    2010 witnessed an 85% increase in FCPA enforcement actions over 2009, which itself was a record year.
    60
    48
    50
    40
    DOJ
    30
    26
    26
    SEC
    20
    20
    18
    20
    14
    13
    8
    10
    7
    7
    5
    3
    2
    0
    2004
    2005
    2006
    2007
    2008
    2009
    2010
  • 14. Blockbuster FCPA Settlements
    14
    * Eight of the top ten monetary settlements in FCPA history were reached in 2010.
    $900
    2010
    Siemens
    $800
    2009
    $700
    2008
    KBR/Halliburton
    $600
    $500
    BAE Systems
    ENI/Snamprogetti
    $800
    $400
    Technip
    $300
    $579
    Daimler
    $400
    $200
    Alcatel-Lucent
    $365
    $338
    Panalpina
    ABB
    $100
    $185
    Pride International
    $137
    $82
    $58
    $52
    2010 Total*:
    $1617
    $0
  • 15. David Kay,American Rice, Inc.
    37 months
    John Warwick,Ports EngineeringConsultants Corporation
    37 months
    Robert Antoine,Haiti Telco
    48 months
    Juan Diaz,Third party consultantto Haiti Telco
    57 months
    Douglas Murphy,American Rice, Inc.
    63 months
    Albert Jack Stanley,KBR
    84 months
    Charles Paul Edward Jumet,Ports EngineeringConsultants Corporation
    87 months
    0
    10
    20
    30
    40
    50
    60
    70
    80
    90
    100
    Most Severe Jail Sentences for FCPA Violations
    15
  • 16. Industry-Wide Investigations
    16
    Oil and Oil-Services Industry – Panalpina Investigation – Vetco settled FCPA case in 2007 based on illegal bribes made through Panalpina. Following settlement, DOJ issued at least 11 letters to oil and oil services companies, requesting information about their dealings with Panalpina. On Nov. 4, 2010, DOJ and the SEC announced settled FCPA enforcement actions against Panalpina plus six of these oil and oil services firms (most of which were Panalpina customers) totaling $236.5 million in disgorgement, fines, and penalties.
  • 17. Industry-Wide Investigations
    17
    Medical Device and Pharmaceutical Industry
    E.g., Biomet, DePuy, Diagnostic Products, Medtronic, Micrus, Smith & Nephew, Stryker, Syncor, Wright Medical, Zimmer Holdings
    E.g., Eli Lilly, Merck, Astra Zeneca, Bristol-Myers Squibb, GlaxoSmithKline, SciClone
    Military and Law Enforcement Products Industry
    E.g., SHOT Show Sting targets, Armor Holdings, DynCorp, Smith & Wesson, Allied Defense, Blackwater/Xe
    Telecommunications Industry
    • E.g., Alcatel-Lucent, Haiti Teleco, ITXC, Latin Node, Magyar Telekom, Siemens entities, UTStarcom, Veraz
    SEC recently launched industry-wide investigation against global financial companies focusing on dealings with sovereign wealth funds
  • 18. 18
    Corruption in Latin America
  • 19. Latin America Economic Trends
    19
    Countries in Latin America, such as Brazil, Mexico, Colombia, Peru, Chile and others, are attracting global investment because of significant economic opportunities
    The region is viewed as attractive for foreign investment
    At the same time, governments are increasing anti-corruption and other enforcement programs to reduce corruption and anti-competitive activities.
  • 20. Corruption Risks in Latin America
    20
    CORRUPTION PERCEPTIONS INDEX 2009
  • 21. Global Perception of Latin America Corruption
    21
    Transparency International has reported that 22 of the 32 countries in Latin America are perceived to suffer from high levels of corruption
    This problem of corruption goes hand in hand with the high level of inequity that has not been overcome by the economic growth experienced by the region in the last few years.
    Weak government institutions, low levels of governance and the influence of particular interests negatively affect efforts to promote equitable and sustainable human development.
  • 22. International Efforts to Reduce Corruption
    22
    Nearly all Organization of American States (OAS) member states have signed and ratified two key legal instruments that provide a foundation for preventing corruption: the Inter-American Convention against Corruption and the UN Convention against Corruption.
    Most signatory countries have joined the follow-up mechanism of the Inter-American Convention, a fundamental step for the treaty to become truly effective.
    Member states have generally been slow to implement meaningful reforms and enforcement program
  • 23. Level of Anti-Corruption Enforcement
    23
    • Improvement of Anti-Corruption Laws Applicable to Companies
    • 24. International pressure to reform laws to comply with international treaty obligations
    • 25. Slowly, countries have been increasing enforcement efforts with new tools provided by new laws
    • 26. Dissemination of Compliance Culture among Companies
    • 27. The Level of Enforcement is Likely to Increase, but at a Slow Pace
  • Elements of theOffense
    24
  • 28. FCPA was first enacted in 1977 but it has acquired new vigor in the post-SOX environment.
    The FCPA consists of civil and criminal penalties
    The FCPA has two parts:
    The anti-bribery provisions
    The books and records/internal controls provisions (applies to "U.S. issuers")
    FCPA Violations
  • 29. Who is liable under the FCPA?
    26
    Domestic
    • All US “issuers” and private companies (“domestic concerns”)
    • 30. Any US corporation or national or any foreign bribery-related conduct
    • 31. US citizens or foreign nationals operating in the US or using instrumentalities
    Foreign
    • Foreign corporations subject to SEC regulation (e.g., via ADRs) and using instrumentalities
    • 32. All foreign persons when in US territory, whether or not they use instrumentalities of interstate commerce
    Includes directors, officers, employees, and agents of entities subject to the statute
  • 33. Elements of an FCPA Violation
    27
    Accounting / Recordkeeping Provisions:
    Under the books and records provisions, issuers must keep accurate books and records and maintain adequate internal controls.
  • 34. Anti-Bribery Provisions
    28
    “It is a crime for any U.S. Person or Company to directly or indirectly pay or promise money or anything of value to any foreign official to obtain or retain business or any other improper advantage.”
  • 35. Money or Anything of Value
    Cash
    Gifts (such as expensive meals, wines, merchandizing with the Company logo)
    Services
    Travel expenses
    Business Opportunities; Advantages; Changes in law.
    Bribe need not to be paid ― the promise of a bribe is also illegal.
    The terms “obtaining or retaining business” or any “improper advantage” are construed very broadly.
  • 36. Foreign Official
    Government officials and employees
    Political party candidates and employees
    Employees of government controlled companies or instrumentalities
    Employees of public international organizations
    Any others in an official capacity (including honorary positions)
  • 37. State Owned Enterprises
    31
    • A “foreign official” includes any officer or employee of a non-U.S. government, and any officer or employee of “any department, agency, or instrumentality” of a non-U.S. government.
    • 38. FCPA applies to interactions between businesses and state-owned companies owned by foreign governments (e.g. Ecopetrol in Colombia)
    • 39. To determine whether employees of a state-owned enterprise are “foreign officials”, SEC and DOJ consider the percentage of government ownership in the enterprise and the amount of control the non-U.S. government exerts over the entity in question.
  • Knowledge and Intent
    It is unlawful to make a payment to any third party while “knowing” that all or a portion of such payment will go directly or indirectly to a foreign official.
    “Knowledge” is broader than “actual knowledge,” and includes “conscious disregard” and “willful ignorance.”
    “Firm belief” that an illegal payment is “substantially certain to occur.”
    Any third party – Agents; consultants; contractors; representatives; partners in a joint venture; subsidiaries
    KBR (2009)
  • 40. Civil Penalties
    33
    • In the civil context, the SEC and DOJ can impose a $10,000 fine per violation upon individuals and companies.
    • 41. The SEC may also impose further civil penalties ranging between $7,500 to $150,000 upon individuals and $75,000 to $725,000 upon companies.
    • 42. Alternatively, the SEC may impose a civil penalty equal to the gross pecuniary gain to an individual or company and equitable relief, such as disgorgement of profits.
  • Criminal Penalties
    34
    • For companies, criminal violations can result in:
    • 43. $2 million fine for an anti-bribery violation; and
    • 44. $25 million fine for a books and records violation.
    • 45. Individuals face up to:
    • 46. 5 years in jail with a maximum $250,000 fine for an anti-bribery violation; and
    • 47. up to 20 years in jail with a maximum $5 million fine for a books and records violation.
    • 48. Under a federal alternative fine provision, companies and individuals may be fined up to twice the benefit sought or received.
  • Exceptions and Affirmative Defenses
    It is NOT a defense that “everyone else is doing it.”
    This, unfortunately, can give a sense of false security, but will provide absolutely no protection in the event the underlying activities are not in compliance.
    Use thoughtful common sense, and don’t be lulled into thinking it’s OK because “That’s the way XX does it” or “Its always been done that way here in XXX.”
  • 49. Affirmative Defenses:
    36
    Reasonable Bona Fide Marketing and Promotion Payments and Payments Authorized Under Written Language of the Foreign County
    • Reasonable and bona fide expenditures, such as travel and lodging expenses directly related to (A) the promotion, demonstration, or explanation of products or services, or (B) the execution or performance of a contract with a foreign government or performances of a contract with a foreign government or agency thereof.
    • 50. Travel expenses to United States (FCPA Op. Proc. Rel. 07-01)
    • 51. Product samples for testing (FCPA Op. Proc. Rel. 09-01)
    • 52. Journalist stipends (FCPA Op. Proc. Rel. 08-03)
    • 53. Trips to tourist destinations (US v. Metcalf & Eddy, Inc)
  • UTStarcom Incorporated (2009)
    37
    • Arranged and paid employees of Chinese state-owned telecommunications companies to travel to popular tourist destinations in the United States, including Hawaii, Las Vegas and New York City, and making improper payments to consultants in China and Mongolia while knowing that they would be used to pay bribes to foreign government officials.
    • 54. UTSI voluntarily disclosed the violations, and agreed to pay a $1.5 million penalty to the DOJ, plus $1.5 million to the SEC.
  • Exception:
    Facilitating or Expediting Payments
    Small payments for the purpose of expediting or securing the performance of a routine AND non-discretionary governmental action (something for which the Payor is already entitled).
    Facilitating payments need to be properly recorded and identified as such.
    Facilitating payments are usually illegal under local laws.
    Vetco Gray – average $5,550 (378 payments in 2 years = $2.1M)
    Current trend/Best practices: limit facilitating payments to life threatening situations or eliminate completely.
  • 55. Mergers and Acquisitions:Buying an FCPA Violation
    39
    • Acquiring company can buy liability for FCPA violations which occurred prior to the acquisition unless the acquiring company conducts a “due diligence” review.
    • 56. Due diligence review will identify the past FCPA violations and the target might need to make a disclosure to the Justice Department.
    • 57. Companies will have to address past FCPA violations: change in price, structure, additional warranties and indemnifications; deal could terminate or be delayed.
    • 58. Similar procedure occurs in joint ventures.
  • UK Bribery Act:Effective this Year
    40
  • 59. UK Bribery Act Basics
    41
    • Two general offenses for bribing or taking a bribe
    • 60. A discrete offense of bribing a foreign public official
    • 61. A new corporate offense for failure to prevent bribery
  • UK Bribery Act:Corporation’s Failure to Prevent Bribery
    42
    • Person associatedwith a commercial organization bribes another:
    The term “associated persons” includes any person who “performs services for or on behalf of the relevant commercial organisation” – and may include subsidiaries, employees, agents, JV partners, consortium members.
    • Defense to liability if the commercial organization has “adequate procedures” to prevent such bribery from occurring:
    A “commercial organization” includes UK entities and those companies and partnerships incorporated or formed overseas that “carry on a business or part of a business in the UK.”
    • The bribery may occur anywhere in the world – a conviction for bribery in the local jurisdiction is not required.
  • UK Bribery Act: Delay in Implementation
    43
    • UK Bribery Act effective date of April 2011 recently delayed for second time until guidance is issued (3-month lag between guidance and effective date).
    • 62. UK government is conducting “review” of law because of UK business complaints.
    • 63. UK prosecutors have stated they intend to aggressively enforce the Act against global companies “doing business” in UK.
    • 64. Guidance on “adequate procedures” defense and prosecution policies are supposed to be issued three months before new effective date.
  • FCPA & Bribery Act
    Similarities:
    FCPA v. Bribery Act: Comparison
    44
    payment of money or anything of value; Bribery Act: “financial or other advantage”
    Covered:
    third parties (agents, consultants and distributors)and have broad extraterritorial reach
    BroadlyApplied to:
    FCPA
    Bribery Act
    Distinctions:
    public and private
    Persons:
    bribery of foreign official
    “corrupt intent”
    Intent:
    “intention to influence”
    corporate offense for failing to prevent bribery; affirmative defense: had “adequate procedures”
    facilitation exception for “grease payment”, affirmative defenses for reasonable bona fide expenses or legal under written local law.
    Exceptions and Defenses:
  • 65. The Risks ofFCPA and UK Bribery Act Enforcement Action
    45
    • DOJ intends to increase “joint” enforcement actions; will coordinate information sharing and enforcement actions.
    • 66. No company wants to be the “guinea pig” for initial UK Bribery Act enforcement actions.
    • 67. Companies need to review and revise FCPA compliance programs to address Bribery Act.
    • 68. Enforcement and interpretation of Bribery Act will be dynamic and require companies to keep up with requirements.
  • Designing andImplementing anAnti-CorruptionCompliance Program
    46
  • 69. FCPA Compliance Policy and Tone at the Top. The Company should develop and promulgate a clearly articulated and visible corporate policy against violations of the FCPA and a strong commitment from senior management.
    Strong policy statement should be adopted by the Board.
    Board and senior management should be required to make commitment to anti-corruption compliance.
    Compliance commitment must be demonstrated by actions.
    Basic Elements of FCPA Compliance Program
    47
  • 70. The Company should develop and promulgate compliance standards and procedures which shall include policies governing:
    gifts;
    hospitality, entertainment, and expenses;
    customer travel;
    political contributions;
    charitable donations and sponsorships;
    facilitation payments; and
    solicitation and extortion.
    Anti-Corruption Policies and Procedures
    48
  • 71. The Company should develop its compliance standards and procedures using a risk assessment.
    The risk assessment should be a formal and documented review which examines:
    • the nature and extent of corruption in each country in which the company does business relying on public and internal sources of information (Transparency International, OECD, etc);
    • 72. the extent of government interactions and the persons in the company responsible for such interactions; and
    • 73. the use of third-party agents, consultants in each country.
    Use of Risk Assessment
    49
  • 74. Annual Review. The Company should review its anti-corruption compliance standards and procedures, on no less than an annual basis to ensure they are working.
    Ongoing Assessment. The Company should conduct ongoing assessments of its FCPA compliance program.
    • During the year, Spot checks and quarterly audits of the compliance program should be conducted.
    • 75. Dynamic process for modifying the compliance program should be made as new information is learned.
    Ongoing Assessment
    50
  • 76. The Company should assign responsibility to one or more senior corporate executives of the Company for the implementation and oversight of its Company's anti-corruption policies.
    Company should designate a compliance officer in senior management and provide adequate resources to compliance office.
    Compliance officer should be separate from General Counsel and internal auditing functions.
    Senior Management Oversight and Reporting
    51
  • 77. The Company should ensure that it has a system of internal controls for the purpose of foreign bribery or concealing bribery.
    Internal controls are key to identifying and preventing bribery.
    Internal audits must be supplemented with forensic audits since internal audits hinge on “materiality” and may not catch bribery schemes.
    Every expenditure of money where bribery may occur should have specific controls and management procedures to prevent bribery (e.g. gifts and hospitality, review form for certain amounts and review by compliance and legal offices).
    Internal Controls
    52
  • 78. FCPA training which shall include: (a) training for all directors and officers, and, where necessary and appropriate, employees, agents, and business partners; and (b) annual certifications, certifying compliance with the training requirements.
    Training programs should be tailored to different audiences and risks. Offices that have interactions (sales and regulatory) with foreign officials should have different program from senior management.
    Legal and compliance staff throughout organization should have separate training program.
    Training
    53
  • 79. The Company should establish or maintain an effective system for
    Providing Guidance;
    Internal Reporting; and
    Response to such internal reporting.
    Internet-based guidance and reporting systems
    Hot-line reporting system for employees to make anonymous reports
    Detailed procedure for review and response to internet and hot-line reports
    Ongoing Advice and Internal Reporting
    54
  • 80. The Company should have appropriate disciplinary procedures to address violations of the anti-corruption laws and the Company's anti-corruption compliance code, policies, and procedures.
    Specific disciplinary procedure should be adopted for employees who commit corruption offense.
    No tolerance policy should be adopted and enforced.
    Discipline
    55
  • 81. Foreign Business Representatives. The Company shall:
    Perform appropriate due diligence on foreign business representatives;
    Inform foreign business partners of its FCPA compliance program;
    Seek reciprocal written anti-corruption and anti-bribery commitments from its foreign business partners.
    Compliance Terms and Conditions. The Company should include FCPA terms and conditions in its contracts with foreign business partners.
    Foreign Business
    56
  • 82. Third Party Agentsand Due Diligence
    57
  • 83. Due Diligence Screening of Third Party Agents
    58
    Screen the Initial Terms of Relationship with Third Party:
    Review the creation of relationship, or any subsequent changes to responsibilities or countries where agent operates.
    Establish procedure for centralized review of contracts to ensure consistent standards.
    Depending on size of company, should establish review at highest level within the company.
    Develop a Different Screening Procedures for Review of Individual Transactions.
  • 84. Guidelines for Due Diligence Process
    59
    Do not over-standardize procedure.
    Need to tailor to individual circumstances in each country based on risk.
    Need to conduct background check to determine (5-10 year history).
    Existence of ties to foreign government officials and employees.
    Existence of any pending or prior investigations of bribery or other criminal conduct or civil violations.
    Create written package and record of review and approval process to demonstrate compliance.
  • 85. Basic Issues to Cover
    60
    Existence of Relationships with Foreign Government Officials
    Purchasing Authority
    Licensing or other regulatory authorities
    Prior History of Bribery and other Crimes
    Nature of Services, Compensation and Payment Method
    Written contract
    Representations and warranties on compliance
    Right to inspect and audit third-party books
    Right to terminate contract if believe violation has or will occur
  • 86. Red Flags
    61
    Due diligence review of relationship or individual transactions must include red flags which require additional investigation before approval.
    Red flags are facts and circumstances that raise serious questions of an FCPA violation.
    Companies which ignore red flags run the risk of FCPA enforcement actions, criminal fines and the need for costly remedial measures. 
    A red flag only means that further scrutiny is warranted.
  • 87. Red Flag Procedure
    62
    Red flags should be tailored to each country and the relevant risks.
    Red flags should be categorized based on risk factors (e.g. some are significant and require more investigation than others).
  • 88. A few thoughts - The perfect FCPA program
    Elements of a program that stands up to the Justice Department:
    The settlement in late 2010 between RAE Industries and the Justice Department and SEC included a detailed outline of “best practices” for a forward-looking FCPA compliance program. 
    Code of Conduct,
    Tone at the top,
    Anti-Corruption Policies and Procedures,
    Use of Risk Assessment,
    Annual Review,
    Oversight and Reporting,
    Internal Controls,
    Training,
    Ongoing Advice and Guidance,
    Discipline,
    Use of Agents and Business Partners,
    Contractual Terms And Conditions,
    Ongoing Assessment
    75% of the 1.8 Billion related to failure in the Due Diligence process
  • 89. A few thoughts - The perfect FCPA program
    Elements of a program that stands up to the Justice Department:
    Bullet point 11:
    Exercise appropriate due diligence and
    implement compliance requirements to ensure
    proper oversight of agents and business
    partners. These requirements should include:
     performing risk-based due diligence for “the
    hiring and appropriate and regular oversight
    of agents and business partners”;
     informing agents and business partners of
    the company’s commitment to follow the
    laws against foreign bribery and of the
    standards, procedures and other measures
    the company has in place to detect and
    prevent bribery; and
     seeking a reciprocal commitment from
    agents and business partners.
    Bullet point 12:
    Include standard provisions in agreements and
    contracts with agents and business partners
    that are designed to prevent violations of the
    anti-corruption laws. These provisions might
    include, depending on the circumstances:
     anti-corruption representations and
    undertakings;
     rights for the company to conduct audits of
    the books and records of the agent of
    business partner;
     rights for the company to terminate its
    relationship with an agent or business
    partner as a result of any breach of anticorruption laws.
     Conduct periodic review and testing of thetionship with an agent or business
    partner as a result of any breach of anticorruption laws
  • 90. How do you recognize a Red Flag?
    Definition: a flag that serves as a warning signal
    “Existence of Relationships with Foreign Government Officials”
    -Gather the name of the owners/executives of the 3rd Parties
    -Compare against a reputable database of Foreign Officials – Screening
    “Prior History of Bribery and other Crimes”
    -On average Google finds 500 new articles on “corruption investigation”
    -Company or Person with history of fraud or money laundering may be a precursor to corruption risk
    65
  • 91. Who they are
    Who “they” are – Identity Verification
    • They – any agent, distributor, M & A
    partner, client and vendor (TiPS)
    • Verification confirms they are “who we thought they were”
    • 92. Works well in 10 Countries, other places…
    • 93. “Who they are” is just half the pie
    William Kelleher - Reseller in Ireland
    CarraignabhFear
    Cork City, Ireland 
    DOB 1/15/1972
    66
  • 94. Who they aren’t…
    Due diligence confirms
    Who they aren’t - Negative Database
    • 3rd Party is not affiliated with a foreign government, SOE, purchasing decision for a government entity
    • 95. 3rd party is not being investigated for corruption (or fraud, or money laundering, etc.)
    William Kelleher Billy Kelleher
    President, XYZ FO Mstr. of State ,Trade and Commerce
    CarraignabhFear 1st Street
    Cork City, Ireland  Dublin, Ireland 
    DOB 1/15/1960 DOB 1/20/1968
    67
  • 96. Unsystematic Due Diligence
    Systematic Due Diligence
    High Risk
    Agents
    Partners
    TIPs in high risk jurisdiction
    Medium
    Distributors
    Resellers
    Low Risk
    Suppliers
    Vendors
    High Risk
    Medium risk
    Low Risk
  • 97. Building Blocks of Systematic Due Diligence
    Take out the Garbage - Validate your information, gather critical data such as owners Details
    Knock down the silos – create a central database that is consistent for all 3rd parties
    Screen – Prove who they aren’t, investigate
    Corruption happens every day, so should your due diligence
    Document, Document, Document
    69
  • 98. GIGO - “Check the Box” is not a sound policy
    Company: ABC Corporation
    Location: Hong Kong
    Owner: 唐老鸭
    TLI – Too Little Information
    You can’t prove “who they aren’t” without the proper information:
    WorldCompliance has 140 Foreign Officials or their contacts containing “Juan and Ramirez”
    Without a UI, Unique Identifier, you can waste valuable time and money proving who they are
    70
  • 99. Building Blocks of Systematic Due Diligence
    Take out the Garbage - Validate your information, gather critical data such as owners Details
    Knock down the silos – create a central database that is consistent for all 3rd parties
    Screen – Prove who they aren’t, investigate
    Corruption happens every day, so should your due diligence
    Document, Document, Document
    71
  • 100. Decentralized Vetting Process
    Deconflicting
    • First Line of defense
    • 101. Important mechanism of controls
    • 102. Only part of your program that protects you continuously
    72
  • 103. Decentralized Vetting Process
    Deconflicting
    • First Line of defense
    • 104. Important mechanism of controls
    • 105. Only part of your program that protects you continuously
    ?
    73
  • 106. Building Blocks of Systematic Due Diligence
    Take out the Garbage - Validate your information, gather critical data such as owners Details
    Knock down the silos – create a central database that is consistent for all 3rd parties
    Screen – Prove who they aren’t, investigate
    Corruption happens every day, so should your due diligence
    Document, Document, Document
    74
  • 107. Who they aren’t
    1 of a million documented foreign officials or
    their contacts
    1 of tens of thousand of persons investigated for corruption
    1 of thousands known corrupt foreign officials
  • 108. Building Blocks of Systematic Due Diligence
    Take out the Garbage - Validate your information, gather critical data such as owners Details
    Knock down the silos – create a central database that is consistent for all 3rd parties
    Screen – Prove who they aren’t, investigate
    Corruption happens every day, so should your due diligence
    Document, Document, Document
    76
  • 109. Building Blocks of Systematic Due Diligence
    Carl Ahlgrimm – Mayor of small town in Germany – Appointed 2010
    NereuAlves De Moura – Member of Chamber of Deputies, newly elected
    Mohammed Abul-Enein – Chairman of Group Cleopatra, largest producer in the world of Ceramic Tiles, founded 1983
    77
  • 110. Due diligence is continuous
    78
  • 111. Document your process and decisions
    Stopped using XYZ Company in Romania as of March 3, 2011 for logistics as owner was brother of Mr. Teselena
    79
  • 112. Systematic Due Diligence
    Your Checklist should used to gather information, not checking boxes
    Not a one time check
    There is no DOJ “anti corruption” certificate, yet
    Training is a component of your program, not the program
    Is a process that is continuous, and covers all TiPs not just the top of the pyramid
    80
  • 113. Metawatch License
    (Initial Due Diligence/Investigations)
    • Manual Search
    • 114. Multilingual Web Interface
    • 115. Multilingual Name Matching
    Zyng monitoring application
    (Ongoing Due Diligence)
    • Enables continuous screening of all relationships
    • 116. Advanced Name Matching intelligence
    • 117. Advanced reporting
    FCPAForce (Systematic Due Diligence)
    • Wco verifies critical information for client
    • 118. No IT involvement
    • 119. Wcodeconflicts
    • 120. Due diligence is completely hands
    free
    Solutions
    WorldCompliance
  • 121. Third Element of Third Party Due Diligence
    WorldCompliance
    Luis Fernando Jamarillo
  • 122. Third Element of Third Party Due Diligence
    WorldCompliance
  • 123. Fourth Element of Third Party Due Diligence
    WorldCompliance
  • 124. Ongoing Due Diligence: periodic scanning of your business contacts
    World Compliance Global Database GSL, GPL, GEL, GAL,GIL
    WorldCompliance
    Match Report based on the following:
    Zyng Name Matching Tool
    Your database of current relationships
    Vendors/Agents
    Distributors
    Customers
    M&A Partners
  • 128. ZYNG Match Report
    WorldCompliance
  • 129. ZYNG Match Report
    WorldCompliance
  • 130. Deciding who is a true match or no match has never been easier
    WorldCompliance
  • 131. Monitoring – risk profiles for relationships change over time
    Vendors/
    Agents
    World Compliance Global Database GSL, GPL, GEL, GAL,GIL
    Employees
    Alerts
    Customers
    Partners
    Name Matching Software
    Name Matching Report
  • 132. FCPA Force A New Solutions
    • Gather and clean your information on your Tips
    • 133. Create central registration site for your company
    • 134. Screen against the largest database of FOS, bad guys
    • 135. Monitor your TiPS and alert you to new risk
    • 136. Create an audit trail that tracks all decisions, and documents
    90
  • 137. Review
    WorldCompliance
    With the FCPA, the “long arm” of the US Justice System just got longer…..
    Due diligence is the cornerstone of your Anti Corruption and Anti Fraud programs
    WorldCompliance offers the largest database of Foreign Officials, the largest and most comprehensive database of high risk persons = the most protection
    With FCPA Force, we can offer all 4 pieces to providing complete protection for your organization in Latin Am and overseas
  • 138. Contact
    Ryan Morgan Pablo Ferrante
    Direct: +1 305.579.2298 Ext. 262 Direct: +1-713-238-2662
    RyanM@worldcompliance.com Cell: +1-713-240-5202
    pferrante@mayerbrown.com
    Richard L. Cassin
    info@cassinlaw.comBruno Werneck
    Direct: +55-11-2504-4245
    Michael Volkov Cell: +55-11-9104-1185
    Direct: (202) 263-3288 bwerneck@mayerbrown.com
    Cell: (240) 505-1992
    mvolkov@mayerbrown.com