Bribery and Corruption: Navigating the Global Risks

Praise for BRIBERY AND CORRUPTION

"Bribery and other forms of corruption are among the greatest risks concerning audit committee members and board members in general of multinational corporations. This book provides excellent, practical advice to those board members in overseeing effective risk management programs and dealing with specific problems when they occur."
Dennis R. Beresford, Professor of Accounting, University of Georgia, current or former audit committee chairman of five public corporations, and former Financial Accounting Standards Board Chairman

"Bribery and Corruption: Navigating the Global Risks is an excellent resource for compliance, audit, and litigation support practitioners. The book provides an exceptional overview of relevant global anti–bribery and corruption laws and regulations as well as specific guidance to help ensure compliance with these laws. Additionally, the book provides comprehensive coverage of anti–corruption programs and controls, including policies and procedures, risk assessment processes, and effective due diligence programs. This book is a must–read for those involved with the prevention, detection, or investigation of bribery and corruption as the authors provide a practical approach to resolving such complex issues as the FCPA and commercial bribery, and other forms of corrupt activities."
Paul E. Zikmund, Senior Director, Forensic Audit, Tyco International

"Bribery and Corruption: Navigating the Global Risks should be on the shelf of every CEO of a multinational company and every lawyer advising them. The authors provide excellent historical perspective on the recent anti–bribery mania, highly useful guidance for professionals designing compliance programs, and a road map for companies and their lawyers who are investigating possible corruption or considering an acquisition abroad. It′s a very thoughtful resource."
Aaron R. Marcu, Partner, Freshfields Bruckhaus Deringer LLP, and former federal prosecutor

"With ever increasing investment and development in the emerging markets, there is an inherent need for understanding the specific risks facing companies as they move across borders. The level of detail that Ernst & Young provides in this book on regional and country–specific trends and activity presents attorneys in varying jurisdictions with a powerful resource in guiding their clients into new geographies. As an attorney in an emerging market, I found the information extremely valuable and believe this book is an essential read for any anti–bribery and corruption practitioner."
Isabel Franco, Partner, KLA–Koury Lopes Advogados, São Paulo, Brazil

Foreword xi

Preface xiii

Chapter 1: Introduction 1

Enforcement Trends 4

Anti–Corruption Compliance Programs 6

Remember the Purpose 6

Notes 7

Chapter 2: Overview of FCPA 9

Legislative History 11

Overview and Key FCPA Statutory Elements 12

Ancillary Statutes 22

Summary 25

Notes 25

Chapter 3: The U.K. Bribery Act and International Bribery and Corruption Initiatives 29

U.K. Bribery Act of 2010 30

Global Anti–Corruption Initiatives 34

Summary 42

Notes 43

Chapter 4: Compliance Programs 47

Goals of an Effective Anti–Corruption Compliance Program 48

Accepted Standards and Guidance 48

What Should an Anti–Corruption Program Include? 64

Summary 72

Notes 73

Chapter 5: Policies and Procedures 75

Bribery, Corruption, and Fraud Prevention Policies 76

Communication and Training 80

Internal Financial Controls 86

Summary 111

Notes 111

Chapter 6: Risk Assessments 113

Scoping the Risk Assessment 117

Conducting the Risk Assessment 120

Gap Analysis 125

Reporting 126

Documenting the Risk Assessment 127

Summary 127

Notes 127

Chapter 7: Monitoring 129

Building an Anti–Corruption Monitoring Program 130

Conducting the Anti–Corruption Compliance Audit 134

Reporting the Results 139

Audits of Agents/Intermediaries 141

Use of Data Analytics in Monitoring 142

Summary 151

Notes 151

Chapter 8: Anti–Corruption Due Diligence 153

Current Transaction Market Perspectives 154

The FCPA Due Diligence Regulatory Environment 157

Why Is Anti–Corruption Due Diligence Significant? 159

Unique Considerations of Anti–Corruption Due Diligence 163

What to Do When Violations Are Found During Anti–Corruption

Due Diligence 173

Summary 174

Note 175

Chapter 9: Investigations 177

Trigger Events 178

Triage 180

Response 186

Remediation 222

Summary 224

Notes 224

Chapter 10: Regional Considerations for Bribery and Corruption Risks 225

Asia–Pacific 225

Europe 237

India and South Asia 251

Middle East 259

Africa 267

Latin America 274

Notes 286

Contributors 292

Chapter 11: Industry Considerations for Bribery and Corruption Risks 295

Aerospace and Defense 296

Automotive 304

Construction and Real Estate 311

Consumer Products 318

Diversified Industrial 323

Energy 328

Financial Services 335

Life Sciences 341

Media and Entertainment 348

Mining and Metals 354

Retail and Wholesale 361

Technology 366

Transportation 373

Notes 381

Contributors 383

Acknowledgments 387

About the Authors 389

About the Contributors 391

Index 395

Brian P. Loughman is a Partner at Ernst & Young LLPand the Americas Leader of the Fraud Investi–gation & Dispute Services Practice. He has extensive experience investigating and remediating bribery and corruption issues for multi–national clients. He frequently presents his findings to the Securities and Exchange Commission and the Department of Justice.

Richard A. Sibery is a Partner at Ernst & Young LLPand leads the Fraud & Investigations group within its Fraud Investigation & Dispute Services Practice. He has extensive experience leading complex international investigations for large public companies. His experience in assisting clients with bribery and corruption issues spans six continents and includes a wide range of industries.