Corruption Crime & Compliance

In a watershed week for FCPA enforcement, the US Department of Justice announced FCPA criminal charges against seven individuals.  Specifically, the Justice Department announced four guilty pleas and one indictment as follow on prosecutions to the January 2017 Rolls Royce FCPA enforcement action, and two guilty pleas in a yet to be announced enforcement action against SBM Offshore. The Justice Department's unprecedented week underscored that the FCPA Unit intends to comply with the Yates Memorandum's direction to increase prosecution of culpable individuals. Going forward, global companies face increasing risk of individual prosecutions. Join Michael Volkov as he discusses the FCPA criminal prosecutions and the implications of the Justice Department's recent enforcement actions.

An effective ethics and compliance program requires a careful assessment of risks and existing controls.  In order to design and implement an effective program, a chief compliance officer has to identify and prioritize company risks.  In addition, a CCO has to review and understand how existing compliance controls mitigate existing risks. A risk assessment is the foundation of a compliance program, but has to incorporate a review of existing controls.  A CCO has to address both of these subjects to develop an effective strategy for risk mitigation and overall compliance program operations. In this episode, Michael Volkov discusses how to conduct a risk and compliance assessment.

Global companies and corporate officers and employees face significant criminal antitrust risks.  The US Department of Justice's Antitrust Division has a mature and aggressive enforcement program targeting illegal cartel activity.  Unfortunately, companies have been slow to implement ethics and compliance programs that are adequately focused on these serious criminal risks. In this episode, Michael Volkov discusses the need for robust ethics and compliance programs and strategies to mitigate criminal antitrust risks.

In the aftermath of the Panama Papers scandal and increased focus on shell companies and hidden ownership interests, US enforcement and regulatory agencies are increasing focus on beneficial ownership of related entities.  In this era of aggressive enforcement, global companies have to integrate beneficial ownership requirements when conducting due diligence of business associates and when engaging customers in order to ensure full compliance with anti-corruption, sanctions and anti-money laundering requirements. In this episode, Michael Volkov discusses the current environment and the need to identify beneficial owners.  He reviews requirements for anti-corruption due diligence, sanctions and AML requirements.

The Ukraine-Russia Sanctions program is a complex set of executives orders, statutes and regulations defining prohibited business transactions with Russian entities and individuals.  The sanctions program was instituted in 2014 in response to Russia's invasion of the Ukraine and annexation of Crimea.  In August 2017, Congress enacted statues and directed OFAC to implement additional regulations.  Congress acted in response to fears that the Trump Administration would relax the Russia Sanctions Program. In this episode, Michael Volkov reviews the Russian Sanctions Program and discusses some practical concerns and warnings for compliance professionals for business interactions with Russian entities and individuals.

The ISO 37001anti-bribery risk management system was issued in 2016.  The standard provides additional guidance on anti-bribery risk management systems and creates a certification process for organizations. Even after one year, there are still questions surrounding the value of ISO 37001 and its certification process. FNotwithstanding the uncertainty surrounding the value of a certification, ISO 3700 includes a number of interesting practices and innovations that may assist a compliance program.

Corruption, Crime & Compliance is pleased to welcome Tom Fox, the Compliance Evangelist, for an interesting interview on Tom's career, his vast compliance program and writing network, and his interesting perspectives on the compliance profession.

The Department of Justice's approach to criminal prosecution of corporations and individuals has evolved over the last 20 years.  Beginning with the traditional model of building criminal cases, brick-by-brick, by investigating and prosecuting individuals, traditionally used to dismantle organized crime and drug trafficking/gang organizations, the Justice Department has now embraced a new model of enlisting corporations to conduct internal investigations, usually with the assistance of outside counsel, and reporting back to the Justice Department on what occurred and who was involved in the criminal violations.  As part of this new strategy, the Justice Department has ignored its traditional role in prosecuting culpable individuals. Michael Volkov examines this new strategy and the reasons for its development in Podcast Episode 4 -- Too Big To Fail, Too Big To Jail -- The Justice Department's Outsourcing of Criminal Investigations and Prosecutions.

Recently, the Justice Department announced the arrest of John Baptiste as part of an ongoing investigation into corruption in Haiti.  The arrest warrant affidavit outlines an undercover investigation, including Title III wiretaps of John Baptiste’s cellphone. In this podcast, Michael Volkov reviews the investigation of Baptiste, culminating in the arrest of Baptiste on August 28, 2017. A copy of the arrest warrant affidavit is here.

With the increased focus on corporate culture, chief compliance officers have to educate the board and senior management on the inextricable link between an ethical culture and financial profitability. In this episode of Corruption, Crime & Compliance, Michael Volkov outlines the link between ethical culture and sustainable growth.  During the episode, Michael refers to two studies on the subject.  The studies are noted below with links to the studies. The Financial Performance of the World's Most Ethical Companies: Advantage in Times of Crisis -- Here Measuring the Return on Character -- Harvard Business Review: Here