Adequate Procedures, Bribery Act & Proceeds of Crime - Written by on Sunday, May 13, 2012 15:05 - 1 Comment

Key ingredients of a compliance program

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Have you wondered what key ingredients of a compliance program might look like?

If your compliance program has the following and they have been properly implemented the only thing keeping you awake at night should be the sounds of your neighbours.

We’ve distilled the list from the UK Bribery Act guidance and recent DOJ suggestions in Deferred Prosecution Agreements.  It may be that certain items are not appropriate in your business – but the menu you select from should include these – and if you are not using one of these ingredients then you should be able to justify why not, perhaps as a result of the Risk Assessment.

Here goes:

Internal controls, policies, and procedures including: (a) a system of internal accounting controls designed to ensure that the business makes and keeps fair and accurate books, records, and accounts; and (b) a rigorous anti-corruption compliance code, standards, and procedures designed to detect and deter violations of applicable anti-corruption laws. Including:

1. A clearly articulated and visible corporate policy against violations of the Bribery Act including strong, explicit, and visible support and commitment from senior management to the program.

2. Appropriate measures to encourage and support the observance of ethics and compliance standards and procedures against foreign bribery.  These should apply to all directors, officers, and levels of employees and, where necessary and appropriate, outside parties acting including but not limited to, agents and intermediaries, consultants, representatives, distributors, teaming partners, contractors and suppliers, consortia, and joint venture partners.

Standards and procedures should include policies governing:

a. Gifts;

b. Hospitality, entertainment, and expenses;

c. Customer travel;

d. Political contributions;

e. Charitable donations and sponsorships;

f. Facilitation payments; and

g. Solicitation and extortion.

3. The standards and procedures, including internal controls, ethics, and compliance programs should be prepared on the basis of a risk assessment.

4. Annual review.

5. Appointment of properly resourced and independent compliance officers.

6. Accurate books and records.

7. Communication and training. These mechanisms should include: (a) periodic training for all directors, officers, and employees, and, where necessary and appropriate, agents and business partners; and (b) annual certifications by all such directors, officers, and relevant employees, and, where necessary and appropriate, agents, and business partners, certifying compliance with the training requirements.

8. Systems for:

a. Providing guidance and advice to directors, officers, employees, and, where appropriate, agents and business partners, on complying with compliance policies, standards, and procedures, including when they need advice on an urgent basis on difficult situations in foreign jurisdictions;

b. Whistleblowing system; and

c. Responding to such requests and undertaking appropriate action in response to such reports.

9. Disciplinary procedures in relation to anti-bribery.

10. Due diligence and compliance requirements pertaining to the retention and oversight of all agents and business partners, including:

a. Properly documented risk-based due diligence pertaining to the hiring and appropriate and regular oversight of agents and business partners;

b. Informing agents and business partners of commitment to abiding by laws on the prohibitions against foreign bribery, and of ethics and compliance standards and procedures or other measures for preventing and detecting such bribery; and

c. Seeking a reciprocal commitment from agents and business partners.

11. Standard provisions in agreements, contracts, and renewals with all agents and business partners that are designed to prevent violations of anti-corruption laws, which may include: (a) anti-corrption representations and undertakings relating to compliance with the anti-corruption laws; (b) rights to conduct audits of the books and records of the agent or business partner to ensure compliance; and (c) rights to terminate an agent or business partner as a result of any breach of anti-corruption laws, and regulations or representations and undertakings.

12. Periodic review and testing of the compliance code, standards, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and compliance and ethics programs, taking into account relevant developments in the field and evolving international and industry standards.


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