FCPA Compliance and Ethics Blog

August 9, 2013

Who Watches the Watchmen? A Look at Anti-Bribery Risks in the Legal Profession

Teodoro Obiang Mangue  has led a life that few could easily relate to.   At age 8, his father organized a coup against his uncle to assume the Presidency of Equatorial Guinea.  Thirty years later, his father continues to maintain a tight grip over the country and Teodoro (nicknamed “Teodorin”) has become the heir apparent, comfortably coasting for the time being as Minister of Agriculture and Forestry.

Equatorial Guinea is a small country of about 600,000 people on the west coast of Africa.  Much in Equatorial Guinea changed in the 1990s when large offshore oil deposits were discovered and the country quickly became one of the leading oil producers in sub-Saharan Africa.  But while the elite in government enjoyed their newfound wealth, none have enjoyed it with quite as much flair as Teodoro.  Among his list of expensive toys are  several Bugattis, a couple Ferraris, Lamborghinis and Bentleys,  a $38.5 million private jet, and a $30 million Malibu home bought in 2006 that was later ranked as the 6th most expensive residential purchase in the United States that year.  Not bad for someone whose official salary is only $60,000 a year.  The true tragedy of the situation, however, is that the majority of Equatorial Guineans live below the poverty line, and the country ranks 136 of the 186 nations on the United Nation’s Human Development Index.  This hasn’t stopped a playboy millionaire like Teodoro, though, who’s reportedly spent nearly $700,000 just to rent Microsoft co-founder Paul Allen’s 303-foot yacht for a weekend.

The Bribery Bar

For years, the international community has tried to expose Obiang’s illegitimate wealth, and in 2010, the United States Senate’s Permanent Subcommittee on Investigations published a scathing report on Obiang’s use of U.S. lawyers, bankers, real estate agents and escrow agents to launder $110 million in suspect funds out of Equatorial Guinea and into the United States.  The report, entitled Keeping Foreign Corruption Out of the United States: Four Case Histories, shows how two U.S. lawyers, Michael Berger and George Nagler, actively helped Obiang to circumvent U.S. anti-money laundering controls at U.S. banks by allowing him to use their attorney-client and law office accounts as conduits for his funds.  The two-step process of first transferring the funds to the lawyers’ attorney-client and law office accounts before transferring the funds to U.S. banks helped mask the fact that the funds were coming from Equatorial Guinea, which most banks flag as a high risk country due to its reputation for corruption.  According to the report, Mr. Berger and Mr. Nagler assisted Mr. Obiang to hide his identity from the banks by, among other things, setting up shell companies for Mr. Obiang and failing to disclose to the banks that Mr. Obiang was the beneficial owner of those companies.  “The Obiang case history,” summarized the Senate Subcommittee report, “demonstrates how a determined [politically exposed person] can employ the services of U.S. attorneys to bring millions of dollars in suspect funds into the United States through U.S. financial institutions.“

A few months after the Senate published its findings on Obiang, the International Bar Association, in cooperation with the Organization for Economic Co-operation and Development (OECD) and the United Nations Office on Drugs and Crime (UNODC), published the results of their own survey entitled Risks and threats of corruption and the legal profession.  The survey’s goal was to alert readers “to the unfortunate fact that lawyers are indeed approached to act as agents/middlemen in transactions that could reasonably be suspected to involve international corruption.”  Indeed, the results of the survey were disconcerting:

  • Nearly half of all respondents stated that corruption was an issue in the legal profession in their own jurisdiction;
  • More than a fifth of respondents said they have or may have been approached to act as an agent or middleman in a transaction that could reasonably be suspected to involve international corruption; and
  • Nearly 30 per cent of respondents said they’d lost business to corrupt law firms or individuals who have engaged in international bribery and corruption.

That lawyers are routinely involved in bribery schemes should come as little surprise to those in the FCPA bar. Some of the biggest cases brought under the Foreign Corrupt Practices Act have involved lawyers, including:

  • Hans Bodmer, a Swiss lawyer, who pleaded guilty in 2004 to helping move money in Viktor Kozeny’s scheme to bribe Azeri officials and gain control over the state-run oil company;
  • Jeffery Tessler, a British lawyer, who was hired by the TSKJ consortium to funnel bribes to high-ranking Nigerian officials regarding contracts to build liquefied natural gas facilities in Nigeria; and
  • Pablo Alegría Con Alonso and José Manuel Aguirre Juárez, two Mexican attorneys accused of assisting Walmart to deliver cash to mayors, city council members, urban planners, and all manner of government bureaucrats in Mexico in order to secure business in the country.

Legal Obligations

Why are members of the legal profession so often implicated in these bribery schemes?  Part of the problem may be due to a lack of client transparency.  In many countries, lawyers have no obligation to look into the source of their client’s funds, even if their client is a high-risk, politically exposed person.   In the US, for example, lawyers have been excluded under the Patriot Act to conduct anti-money laundering due diligence, unlike banks and other financial institutions.  Other countries that have no direct anti-money laundering measures applicable to lawyers include China, India and Canada.

Even when a lawyer is aware that their client is engaged in illegal behavior, many legal professionals may feel a contradictory obligation to refrain from revealing confidential information that they’ve gained as part of the attorney-client relationship.   This issue was brought center-stage in the early 2000s after the Enron, WorldCom and Tyco scandals, which showed just how much attorneys knew of the illicit behavior going on without doing anything to stop it.  Now, in the wake of Sarbanes Oxley, the American Bar Association’s Model Rules of Professional Conduct state that once a client has used the lawyer’s services in furtherance of a crime, the lawyer must withdraw completely from representation.

Still, many lawyers remain unaware of their responsibilities, especially those having to do with corruption.  As a result, the IBA has made it a goal to continue to inform lawyers of their duties not to perpetuate bribery schemes.  Earlier this year, it published an Anticorruption Guidance meant for bar associations around the world to develop anti-corruption initiatives that are relevant to practitioners in their jurisdictions, and last year, the IBA coordinated with the OECD, the UNODC and 40 law schools selected from various countries to pilot the use of anti-corruption training into the syllabus of law degrees.

Increasing Due Diligence

Another problem in this area is the fact that law firms are so rarely vetted themselves for anti-bribery.  In fact, more than two-thirds of respondents in the 2010 IBA survey said that their law firms had never been subject to anti-corruption or anti-money laundering due diligence conducted by foreign clients; more than 90 per cent stated that less than 25 per cent of clients required them to certify that they had any anti-corruption compliance program at all.  Often, that means that companies operating in foreign jurisdictions are choosing who to hire for legal advice based solely on reputation.  In its 2010 report, the IBA wrote “that clients are unaware of their own due diligence responsibilities and/or that they do not consider lawyers as intermediaries who could engage in corrupt acts and/or be subject to anti-corruption rules and regulations.”  The dilemma brings to mind the Latin phrase quis custodiet ipsos custodes?  –  “who watches the watchmen?“

As companies become increasingly aware of these risks, many are now asking to conduct at least some level of due diligence on their outside lawyers.   And if this was something that at one time would have been frowned upon in the legal profession, many foreign lawyers, like other third party intermediaries, are seeing due diligence as a way to distinguish themselves from their peers.  Earlier this Summer, TRACE International partnered with the Pan-African Lawyer’s Union (PALU) to offer free TRAC profiles to African lawyers and law firms.  The TRAC certification offers PALU law firms an online platform to rapidly exchange baseline due-diligence information with potential clients.  For those companies operating in the high-speed world of complex international commercial negotiations and international dispute resolution, TRAC is a quick and easy way to gain comfort with an outside law firm.

Conclusion

Lawyers, as guardians of the law, play a vital role in the fight against corruption.  Yet the unfortunate reality is that some abuse their positions to perpetuate bribery schemes.   Companies, aware that there is a growing expectation for them to conduct due diligence on a broader range of third parties, are now beginning to weigh outside counsel as potential risks.  After all, if bribery  doesn’t discriminate based on profession, then nor should a company’s due diligence program.  All of that is a good thing for honest lawyers, companies that want to do right, and, in the end, the innocent victims of corruption.

Severin Wirz, Attorney and Manager, Advisory Services ,TRACE International, Inc. He can be reached via email  at wirz@TRACEinternational.org and phone at 410) 990 0076.

TRACE is a non-profit membership association helping companies to raise their anti-bribery standards.  As part of its commitment to transparency in the legal profession, TRACE is waiving the fee for all attorneys and law firms who would like to subscribe to TRAC.  Simply visit www.tracnumber.com and apply the code: OPENLAW2013.  This code will remain valid for the whole month of August.   

June 28, 2013

The NHL and Compliance: Some Thoughts From Alexandra Wrage On Doing Business Ethically

This past week I chaired the Beacon Events Corruption and Compliance – Asia Congress 2013 conference. One of the speakers was Alexandra Wrage, the founder and President of TRACE International, Inc (TRACE). If you have never heard Alexandra speak on anti-corruption, you have missed one of the most dynamic speakers in the industry. Alexandra is Canadian and, in our chats during the event, one of the things that we talked about was the National Hockey League (NHL) championship series between the Chicago Blackhawks and the Boston Bruins. Not only was the series the first championship between two of the Original Six teams since 1979 but the hockey was some of the finest and most exciting played in recent memory. Alexandra noted my somewhat forlorn use of the Houston Astros as a teacher in lessons around compliance and ethics. She also remarked that I had never discussed hockey in any of my blogs so she challenged me to use one of her homeland’s greatest gifts to mankind in a blog post. So here goes.

Last week the Chicago Blackhawks won the NHL’s championship, thereby securing the Stanley Cup, named after Lord Stanley former Governor General of Canada. The six-game series between the Blackhawks and the Boston Bruins was fabulous, in the deciding game, Game Six, the Blackhawks scored two goals in the final 90 seconds to not only erase a 2-1 deficit but win the game and bring the Cup back to Chicago. But here is the compliance angle, this most physical of all sports was played cleanly with no fighting, no cheap shots or dirty checks and no major penalties imposed on the players of either team. It was a great example that the game can be played the right way and done so at the highest level.

This translates into anti-corruption and anti-bribery in the business world as well because as Alexandra put it in her talk to the conference, entitled “Turning compliance into a tool and a strategic asset to drive company performance”, ethical principles are business advantages. She explained that by doing business ethically, not only does a company protect itself for the increasing international enforcement regimes that are being enacted but organizations can protect themselves in a myriad of other ways. If a company agrees to pay a bribe to obtain a contract, that is but one step that puts a company at risk during the entire process and relationship. As Wrage described, when you pay a bribe you are targeting your company for a relationship that can be endlessly changed. It becomes an endless pit of payments from which you cannot extricate yourself. Any government official who accepts a bribe has control over you and the amount that he or she can squeeze out of you going forward. You completely lose control of the negotiating process and indeed the entire contract because there is nothing that you have to enforce. A bribe, even if memorialized in writing, cannot be enforced in any court of law or other legal proceeding such as arbitration.

Wrage also talked about the hidden costs involved in any bribery scheme. An entire set of falsified documents must be created and even alternative corporation structures put in place to set the criminal structure to facilitate bribes. Company employees are not doing their regular jobs when they are engaging in such criminal actions. Indeed, if an employee is willing to engage in bribery, it does not take a long leap for that employee to turn to other criminal activities such as embezzlement. If there is money being syphoned off to pay bribes, it certainly can be routed into an employee’s individual bank account.

Wrage also explained why doing business ethically can benefit companies in the mergers and acquisitions (M&A) context. She talked about the off-cited example of eLandia, where the acquiring company basically had to write off an entire investment because it discovered that the entity purchased had a long running bribery scheme which artificially inflated the value of the company and post-acquisition, when the bribery scheme was stopped, the value plunged.

Wrage also noted that it is well-nigh impossible to get proper valuation on a potential acquisition target if bribery and corruption is occurring inside it. This is because if you take away the business generated from the bribery and corruption, what is the business worth? Put another way, what is your deal worth? Your inquiry needs to extend further than simply into the business as well. You need to understand any target’s sales model and understand how their business partners operate. Additionally, if their sales model is third parties, that is obviously your greatest risk.

Wrage’s thoughts echoed in many ways some of the discussion we saw in last year’s Department of Justice (DOJ)/Securities and Exchange Commission (SEC) FCPA Guidance, where for the first time, there was an extensive discussion about pre-acquisition due diligence, in addition to post-acquisition compliance integration, in the M&A context. The FCPA Guidance related that “most commonly, inadequate due diligence can allow a course of bribery to continue—with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability.” The FCPA Guidance listed several hypotheticals which discussed pre-acquisition due diligence and that by engaging in such efforts a company may well be able to shield itself from Foreign Corrupt Practices Act (FCPA) liability after the merger occurs.

The FCPA Guidance also presented a fact pattern in its discussions of Declinations to Prosecute (Declination) where a US company was acquiring a foreign entity which was not previously subject to the FCPA. In one example, a US company received its Declination based upon its extensive pre-acquisition due diligence which allowed it to identify and halt the corruption. As there was no continuing misconduct post-acquisition, the FCPA was not violated. The clear import is that if this pre-acquisition due diligence was not performed; a Declination may not be forthcoming.

The bottom line from Wrage is that compliance is good for business. She made clear that ethical principles are a business advantage and not a business disadvantage. Having a strong compliance program in place also builds moral among employees. Lastly, Wrage believes that doing business ethically also builds good reputation with customers. There are numerous stakeholders for any corporation. Wrage has been one of the leading lights to demonstrate that by doing business ethically, and in compliance with anti-corruption/anti-bribery laws like the FCPA and the UK Bribery Act, a company can satisfy many of those constituency simultaneously.

The Blackhawks and the Bruins showed that professional hockey can be played at the highest level without the extracurricular activity that mars so many of the regular season games. So, just as doing business ethically and in compliance with international anti-corruption regimes is good for business, playing great hockey within the rules makes for not only great hockey to watch but improves the entire NHL hockey.

And who says a Texan, or any other Southerner for that matter, cannot fully appreciate hockey?

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, 2013

November 19, 2012

The FCPA Guidance: An Exploration of ‘Corruptly’ and ‘Willfully’

I am back from my surgery and convalescence and I wanted to thank everyone for the good wishes and thoughts. I would also like to give a very big special thanks to Mary Shaddock Jones for her entire series of timely and topical articles that she and her associate Miller Flynt wrote while I was out. I would also like to thank Candice Tal, Founder and CEO of Infortal Worldwide and Alexandra Wrage, Founder and President of Trace International, for their articles as well. I hope that you enjoyed the articles from all of these great compliance practitioners.

Today I wanted to begin to look at the Department of Justice (DOJ) “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (the “Guidance”), which was released last week and available (at no cost) here. My review will be through the prism of Major League Baseball (MLB) and the events last week where the owner of the Florida Marlins completely and utterly neutered the team through the fire sale give away of all of the team’s talent. The giveaway of the Marlins talent was so devastating that I can only say that the Houston Astros are no longer the worst team, nor have the lowest payroll, in baseball. Jeffrey Loria, owner of the Marlins, promised all of the Marlin fans, politicians and voters of south Florida that if they publicly funded a new stadium for him to the tune of $400MM, he would commit to paying for and fielding a competitive baseball team. Not only did he not tell the truth to those folks, he apparently continued to ‘dissemble’ while assembling his now traded talent. According to Sports Illustrated, “Shortstop Jose Reyes and left-hander Mark Buehrle, two of the five Marlins headed to Toronto in a pending blockbuster, are upset that the team broke verbal promises to them regarding trades, according to major-league sources. The Marlins do not award no-trade clauses, but club officials, while recruiting Reyes and Buerhle as free agents last offseason, assured both players that they would not be moved, sources said. Buehrle knew the Marlins’ history of dumping high-priced players, and it concerned him, according to a friend. Team president David Samson, however, told both Buehrle and his wife, Jamie, that the team was committed to a long-term vision, sources said. A source close to Reyes, asked if the shortstop also received verbal assurances from the Marlins that he would not be traded, responded, “The answer is yes. A vehement yes.””

I thought about the above while reading the Guidance. Initially I would note that despite the protestations of numerous of the FCPA commentariatti, the Guidance is an excellent resource for the compliance professional. It collects, in one very usable volume, the DOJ and SEC enforcement actions, Opinion Releases, current compliance best practices, and relevant Prosecutorial and Sentencing Guidelines. The item which caught my eye with regard to the Marlins giveaway of their players was the section on “What Does “Corruptly” Mean”. Fortunately for Loria, he is not subject to the FCPA as the definition cited by the DOJ reads as follows:

In order for a corporation to be criminally liable under the FCPA, it must be found to have acted corruptly. The word “corruptly” is used in order to make clear that the offer, payment, promise, or gift, must be intended to induce the recipient to misuse his official position; for example, wrongfully to direct business to the payor or his client, to obtain preferential legislation or regulations, or to induce a foreign official to fail to perform an official function.

The Guidance goes on to relate that the FCPA focuses on intent, so that it does not require that a corrupt act succeed in its purpose. Further, a foreign official need not solicit, accept or indeed receive a bribe for the FCPA to be violated. The Guidance points to the Innospec enforcement action in which “a specialty chemical company promised Iraqi government officials approximately $850,000 in bribes for an upcoming contract. Although the company did not, in the end, make the payment (the scheme was thwarted by the U.S. government’s investigation), the company still violated the FCPA and was held accountable.” Further this is why “Regardless of size, for a gift or other payment to violate the statute, the payor must have corrupt intent—that is, the intent to improperly influence the government official. The corrupt intent requirement protects companies that engage in the ordinary and legitimate promotion of their businesses while targeting conduct that seeks to improperly induce officials into misusing their positions.”

But beyond corruptly, for an individual to be criminally liable under the FCPA, that person must act ‘willfully’. The Guidance notes that the FCPA does not define ‘willfully’ but the Guidance points to its construction by federal court decisions. Indeed in US v. Kay, the US Supreme Court upheld jury instructions stated that willfully is “knowledge that [a defendant] was doing a ‘bad’ act under the general rules of law” thereby connoting a willful act is one which is committed both voluntarily and purposefully, and with a bad pursose in mind. The Guidance went on to cite the US Supreme Court in Bryan v. United States, for the proposition that “[a]s a general matter, when used in the criminal context, a ‘willful’ act is one undertaken with a ‘bad purpose.’ In other words, in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’”

So what if we look at Jeffery Loria under these two requirements of the FCPA? First, under the corporate requirement of ‘corruptly’ do you think that he misled the voters of Florida when he told them that if they built it, they (top notch ballplayers) will come because Loria would pay for them. Remember its “offer, payment, promise, or gift, must be intended to induce the recipient” but that payment does not have to be made, or in Loria’s case withdrawn. What about under the individual requirement of ‘willfully’ regarding Loria’s and the Marlin’s statements to the players it signed? Here the standard is “knowledge that [a defendant] was doing a ‘bad’ act under the general rules of law”. Were they doing a bad act when they promised that they would not be traded and then they were unceremoniously traded? I guess the bottom line is that Mr. Loria had better be glad he is not subject to the UK Bribery Act where bribery of both public officials and regular citizens is a violation of that law.

Or here in Houston we could simply celebrate that there is a worse owner than Jim Crane because, you know, we got new Astros uniforms from him. I feel better already.

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

November 16, 2012

Share more. Spend less. Reduce Risk.

Alexandra Wrage, President of TRACEEd. Note-today we have a guest post from Alexandra Wrage, President of  Trace International.

Well over a thousand people with an interest in enhancing transparency worldwide met in Brasilia for the International Anti-Corruption Conference last week to share best practices, brainstorm, promote new ideas and, often, just to complain about the slow pace of change.

At this conference, as elsewhere, three themes have emerged.

1.The burden on companies will continue to grow.

Governments hoping to have an impact on transnational crime recognize that exerting pressure on multinational companies is the most expedient way to proceed. Governments are hampered by legal obstacles and political sensitivities and cannot easily reach across borders to solve significant social, economic and security challenges. They can, however, require their companies or companies listed on their exchanges to work to reduce bribery (the FCPA and similar laws in other jurisdictions), curb the use of forced or trafficked labor (California Transparency in Supply Chains Act of 2012), reduce violence associated with conflict minerals (Dodd-Frank Wall Street Reform and Consumer Protection Act), and prevent money laundering, (various new initiatives impacting the financial services industry).

2.The current pace of expenditure on compliance is unsustainable.

The numbers of employees companies are expected to train on compliance topics, using both on-line and in-person training, is increasing. Many companies have determined that it’s simpler to just train everyone rather than invest the resources to sort and track different categories of employees. Companies are searching denied parties lists with increasing frequency. Ten years ago, many companies searched only the entity name and only upon contract renewal. Many now prudently search the entity name and the names of all owners, — and they search weekly or daily. The world of due diligence has probably changed the most dramatically as companies are encouraged to seek certainty in all of their relationships. Certainty isn’t available at any price, and near-certainty is very expensive indeed. Companies spend breathtaking sums to try to prove that a media report is not true, that a rumor is unfounded or that a government official’s golf buddy is not likely to trade on the relationship.

And that’s just for compliance with the FCPA. Now companies are looking at setting up parallel due diligence systems to vet their suppliers with respect to their use of conflict minerals or for egregious labor practices. The former may be the purview of the procurement department and the latter the responsibility of the labor and employment group. Multiple processes, occasionally duplicative and often without visibility across departments, result in mounting expense, compliance fatigue and employee cynicism.

3.Companies will have to choose between a more collective, shared-cost approach to compliance, doing too little or paying too much.

Companies have, on the whole, not been able to overcome their queasiness about ill-defined anti-trust concerns or their natural instincts to avoiding sharing information with competitors. That needs to change for the business community to begin stemming the financial hemorrhage and increasing levels of risk.

Here are just three examples of how this could work. Spoiler alert: one is a TRACE project of which we’re very proud.

On-line training: Currently, companies choose either to create their online training in-house with some combination of video vignettes and PowerPoints or pay for generic or moderately tailorable off-the-shelf training that isn’t always relevant to their industry or the regions in which they operate. Instead, industry groups could get organized.  They could pool the resources of their members to create an on-line training module tailored to the specific needs of that industry, with carefully selected case studies relevant to their respective employees, pay a third party LMS to host the module and then share the product amongst the contributors. The benchmarking and exchange of expertise around the roll-out ensures a high-quality product. Everyone gets trained to the same high standard and the cost is shared.

Model policies: Most compliance experts agree that a purely off-the-shelf compliance program is inadequate and companies simply cut and paste their program at their peril. On the other hand, there are component parts of any compliance program that are largely duplicative and vary little. Companies can benefit from perusing the policies of other multinationals and highlighting the aspects relevant to their business. Once this benchmarking step is complete, in-house counsel or compliance experts are in an informed position and can speak to their outside counsel knowledgeably, making the process more meaningful and less expensive. Similarly, access to databases of policies can support on-going benchmarking efforts for companies keen to maintain their state-of-the-art policies. The United Nations Office on Drugs and Crime maintains such a database with the policies of the Global Fortune 500. Industry groups could also work to pool redacted policies for the benefit of all members.

Due diligence: Currently, companies – in-house or through vendors – collect baseline due diligence information about their third party representatives including ownership, ties to the government, past misconduct, denied party hits and compliance certifications. And then the next company does the same thing all over again. The collection of this first round of information is labor-intensive and requires attention to detail, but – apart from the fact of the relationships themselves – none of the information gives rise to either competitive or anti-trust concerns.  Intermediaries themselves will tell you that they are being bludgeoned with repetitive, near-identical requests for information from multiple companies. Instead, third parties could be invited to answer all questions and upload documentation once to a secure global platform, subject to rigorous verification and continuous watch list screening, and all companies could have access to this baseline due diligence with the third party’s approval. (As foreshadowed, TRACE has built this public tool – TRACnumber.com)  Companies pay nothing. Third party intermediaries pay a modest fee to fund the platform and the translation and verification process. The information is shared, saving both parties the cost and delay of duplicative efforts. (Click here to see a 90-second animated video on TRAC.

There are a lot of smart and creative people working in the field of compliance, including the intrepid but briefly incapacitated host of this blog. Accomplishing the more basic tasks through these and other collective approaches will free up time and budget, enabling companies to direct their more complex problems to these experts for carefully tailored solutions.

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.

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