Lessons learnt from the weaknesses in the oversight review of global anti-bribery & corruption systems and controls
Companies have Bribery and Corruption controls and even paid accountants, solicitors and consultants to advise them. If the processes are not documented, tested, embedded and integrated, quite often the oversights verdict is; not good enough. The failure to implement a holistic and automated solution is the root cause for a system and control failure.
In spite numerous industry-wide warnings to ensure that businesses have proper systems and controls in place, to counter the risks of bribery and corruption in their business activities and play their role in preserving the integrity of global trade which includes taking all steps necessary to prevent financial crime and fail to take action.
Do not loosen the grip on third party compliance.
It is not enough just to have written bribery and corruption policies and procedures in place they often fail to live up with the terms of content and implementation.
In a recent article in Forbes, emerging markets have outperformed their counterparts across the globe. Contrary to the general belief, some of the best performers for 2014 were Egypt, Turkey, India and a few tiger economies of South East Asian. At the same time, corruption risk are shown to be "in the bottom half" of the Transparency International Index of the same countries adequately. Therefore do not let the grip to be loose and always consider bribery and corruption risks before making payments to third parties.
Some crucial lessons we can learn or update the current procedures from recent fines are:
- The firm failed to take reasonable care in setting up and maintaining adequate systems to counter risks of anti-bribery and corruption, and "operated a weak control environment" regarding its dealings with third parties.
- The fines were imposed after the firm received both general warnings and warnings specific to the firm itself.
- Failed to conduct adequate risk assessment of third parties before starting business relationships, or conduct adequate due diligence to assess the risks involved in doing business with third parties.
- The firm failed to establish and record sufficient commercial rationales to support payments to third parties, or monitor staff to ensure that each new third party had been subject to the recording of an adequate commercial rationale or adequate due diligence.
- The firm failed to regularly review its relationships with third parties in sufficient detail to justify an ongoing business relationship.
- The company failed to keep adequate records of the ABC measures taken in its third party account files.
Therefore, once again. Make sure that you have covered compliance to Adequate Procedures Guidance for a minimum of four offences:
- Offering, promising or giving a bribe
- Requesting, agreeing to receive, or accepting a bribe
- Bribing a foreign public official
- Failure of a commercial organisation to prevent bribery ("the Corporate Offence")
And a Zero fault adherence to the six principles that prevent bribery being committed:
- Proportionate Procedures: are proportionate to the bribery risks faced taking into consideration the nature, scale and complexity of the activities.
- Top Level Commitment: that fosters a true culture where bribery is unacceptable.
- Risk Assessment: relevant to the extent of exposure to global country risk, sectoral risk, transaction risk, business opportunity risk, and business partnership risk.
- Due Diligence: proportionate and risk-based due diligence across the organisation.
- Communication and training are proportionate to the risks it faces.
- Monitoring and Review: for improvements and reporting.
Contact us for a detailed implementation presentation and whitepaper or an Bribery and Corruption IT Assessment tool to achieve the above.
