FCPA Compliance and Ethics Blog

May 23, 2012

Assessing Risk? ethiXbase is an Invaluable Tool

Most compliance practitioners have gotten the message that a risk assessment should inform the creation of, or enhancements to, your Foreign Corrupt Practices (FCPA) or Bribery Act anti-corruption compliance program. But just say that you are Compliance Officer and the Chief Compliance Officer (CCO) comes into your office and tells you that the company wants to look at going into China to either manufacture a key component of your company’s most valuable product or go into Russia to sell a new product line. The CCO would like you to do a risk assessment from the anti-corruption/anti-bribery perspective. You cannot go to outside counsel or an outside expert. Faced with this problem, what might be the best single resource for you to begin this research?

Put another way, what is the best one-stop database site for anti-corruption and anti-bribery on a worldwide basis? I think that the answer is will lead you to one resource that I would suggest you take a very hard look and that is ethiXbase.com. The reason – it simply has a breadth and scope that cannot be matched.

The database has five tabs which allow you to research in a wide variety of areas. In addition to the individual tabs, details of which are listed below, you can set notifications for email alerts. You should also note that the site is updated on a daily basis. The specific information includes the following:

Dashboard

This tab allows you to set any of the BRIC, Brazil, Russia, India and China, countries as a default country. From this setting you will receive information on the latest actions in the country; the latest FCPA enforcement actions related to the country you have selected; enforcement statistics and trends and summary of legislation relating to anti-corruption, translated into English. This tab also provides general statistics on the country such as population, capitol and elected federal officials.

FCPA Index

This tab provides a simply breath-taking scope of information for the compliance practitioner. Every FCPA enforcement action and publicly announced on-going investigation is available to you in a searchable database. The ease of use is outstanding. There is information on Federal register, federal agency, public laws, and Congress bills related to the FCPA and, finally, there are risk factors disclosed by companies around the world in all of the above. Amazingly, this database is updated on an hourly basis so you have the most up-to-date information available.

Global Index

This database is equally broad in scope to the FCPA Index but set up for the entire world. Pick any country and you will immediately have access to anti-corruption legislation and the applicability of the Organization for Economic Co-operation and Development (OECD) and United Nations Convention against Corruption (UNCAC). You will find OECD reports as well as other Non-Government Organizations (NGOs) such as the International Monetary Fund (IMF). There is also an index of ancillary laws such as privacy laws and anti-money laundering legislation in each country.

Law Firm Memos

For any compliance practitioner, this resource is simply fabulous; it houses the best legal Memos from the best law firms in the world. It is database of more than 1,000 client alerts and white papers from firms specializing in compliance issues. It is searchable by law firm name, topic and title. You can set up customized watches or bookmark specific memos.

News

Last, but certainly not least, is the News section. This features news in the following categories: Home, News Home, Featured, Africa, Middle East, Europe, North America, Central-South America, South East Asia, Australasia, South Asia and Central Asia. Why is this so important? It can keep you abreast of the most current anti-corruption and anti-bribery news across the globe. More importantly, if an issue or matter pops up in your industry or a geographic region in which your company does business, you will know about it and can be prepared to review it internally. It is a great way to understand how and where the Department of Justice (DOJ) is using its investigative resources.

So how does all of this relate to your assigned task? ethiXbase allows you to research the relevant laws of each jurisdiction that you wish to enter. You can also review all FCPA enforcement actions to determine if your sales model may be similar to any companies which have run afoul of the FCPA. The Law Firm Memo section will give you the underlying legal basis to support your findings. With the Dashboard you can set up the email notifications for any new legal enforcement actions, Memos or news for the country or countries that you need to follow closely. Lastly, the News section will allow you to keep abreast of the reported information for each country.

I have thoroughly reviewed ethiXbase and use it in my compliance legal practice. You should as well.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

April 17, 2012

The Ashes and Australian Anti-Bribery Enforcement Efforts, with an assist from ethiXbase

Today we celebrate my favorite English sport, cricket. As baseball is my first love, it is not too surprising to find that I enjoy cricket. I like the cerebral nature of the game, coupled with its meandering pace, which can lead to Test Matches of five days. We note that England currently holds the Ashes, which is a Test series that has been played between England and Australia since 1882. It is one of the most celebrated rivalries in international cricket and is currently played biennially, alternately in England and Australia. England is the current holder after winning the Ashes in 2009 and again in the 2010/11 series in Australia. The next series will be held in 2013 in England.

Transitioning from the Ashes, we expand our UK theme week to include the Commonwealth of Nations country of Australia, which has an anti-bribery law on the books, entitled “The Criminal Code Amendment (Bribery of Foreign Public Officials) Act 1999”, which was viewed by the Australian Federal Government as a major step in formalizing Australia’s commitment to stamping out international corruption. A Transparency International (TI) White Paper, entitled “Australian Laws Prohibiting Foreign Bribery”, said that the Australian legislation was a part of an international effort to ensure that contracts are won and awarded fairly, which was led by signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

As reported by TI, in an article entitled “Steps taken to implement and enforce the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions”, this law was amended in 2010, when “the Australian Parliament passed the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010.” This new law increased the financial penalties for bribery offences by creating a formula for fines and penalties based on existing penalties for restrictive trade practices and cartel behavior but it allowed a higher monetary fine if the serious criminal nature of bribery and the serious detrimental effects of bribery merited it.

From the looks of recent developments Down Under, it appears that the anti-bribery enforcement is alive and well. There have been several recent articles involving different industries in Australia, which have allegedly self-reported violations of the Australian Laws Prohibiting Foreign Bribery or are otherwise under investigation. In an article in The Age, entitled “Firms tell of possible bribes”, Richard Baker and Nick McKenzie reported that “companies involved in mining, exploration and other sectors in Africa and Asia have discovered possible evidence of overseas bribery during recent internal audits.” One company Leighton Holdings has publicly admitted “it had alerted the AFP to a possible breach of anti-bribery laws. The alleged breach involves its Singapore-based subsidiary Leighton Offshore Pvt and payments made to facilitate a wharf construction project in Iraq.” Further, The Age reported “Documents from a NSW Supreme Court case last year reveal Leighton conducted an internal inquiry into ”apparently corrupt conduct” involving allegations that a senior employee channelled half a million dollars worth of steel to a third-party project at the Bantam Shipyard in Indonesia.”

In another article by the same two reporters, this time in the Sydney Morning Herald, entitled “Defence firm faces bribery probe”, Baker and McKenzie reported “AUSTRALIA’s biggest military contractor, Tenix Defence, is under federal police investigation for allegedly bribing officials and politicians across Asia to win massive contracts.” The article reported that the Australian Federal Police (AFP) has stated the agency ”received a referral in 2009 for alleged improper payments made by multinational staff members to secure contracts in the Asia region”. The investigation involves five separate Tenix transactions in which the company “is suspected of channelling several million dollars in alleged kickbacks through agents to win defence contracts across Asian countries including Indonesia and the Philippines between 2001 and 2008.”

With this increase in Australian enforcement, you may wonder, if you are sitting in the UK or US, just how can you keep up with the plethora of new laws, codes and enforcement actions. One of the best answers appeared this week in the FCPA Blog with the announcement of the “rollout of ethiXbase, the world’s largest anti-corruption database. ethiXbase builds on the global success of the FCPA Database. It features 8,000 BRIIC and U.S. anti-corruption enforcement actions, live SEC and DOJ feeds, and the most extensive collection of local anti-corruption and gift-giving laws ever assembled.” In addition to providing the legal basis for anti-corruption and anti-bribery enforcement, the database has trending analytics tools that reveal emerging compliance trouble spots around the world. Additionally, users of the database can create alerts for countries, industries, and companies. Finally, close to my heart as a practicing lawyer, the database has a global law firm directory available to the public, which includes 9,000 listings. It also includes more than 1,200 searchable law firm memos by leading practitioners who cover the US Foreign Corrupt Practices Act (FCPA), UK Bribery Act, and other global enforcements.

So while thinking of England and the UK Bribery Act, it is well to remember that most of the world is moving towards a more robust enforcement regime to combat corruption and bribery. While the US has led the way, other countries are quickly catching up and the era of international enforcement cooperation is upon all compliance practitioners and companies. It is far better to learn what laws you may face, assess your risks and then manage or mitigate those risks now rather than later.

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The articles referenced in this post were provided by James Greenall, a Director with STEELE in Washington DC,  who has been closely following anti-corruption efforts in his native Australia, where his firm conducts a significant amount of investigative due diligence. James can be reached atjgreenall@steelecis.com.

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This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

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