COVID-19 & Anti-Corruption - What Compliance Teams Need To Know

COVID-19 & anti-corruption: What
compliance teams need to know

PRO Compliance
European Union, Global, United Kingdom, USA May 14 2020
Lexology Pro Compliance provides an overview of some of

their heightened anti-corruption and bribery risks faced by
companies in the context of COVID-19, as well as some
guidelines on how to respond to the challenges, advice
from regulators and insights from experienced compliance
professionals.
The economic upheaval brought about by the COVID-19
pandemic has left many companies facing unprecedented
pressure to stay afloat as revenues decline, which has also led
to a heightened risk of unethical behaviour and exposure to
fraud.
The COVID-19 crisis often means multiple layers of
governance processes, effective controls and oversight of
employee conduct are all relaxed in the name of business
continuity, which has the potential to compromise effective
compliance monitoring creating an opening for criminal activity.
While managing risk can be especially challenging during times
of crisis, however, companies who lead in integrity will be able
to differentiate themselves, while those who do not are likely to
be held accountable after this crisis has passed.
Below is a summary of some of the key risks and the guidance
from major regulators around the world as well as some tips on
how compliance officers can stay up-to-date and help protect
their businesses.
Heightened risks
The global scope of the COVID-19 pandemic has brought with
it increasing risks relating to international corruption and
financial crime. Indeed, the Council of Europe’s Group of States
against Corruption (GRECO) has issued guidelines to its 50
member states highlighting particular corruption risk areas
implicated by the pandemic. This article on Lexology highlights
some of the key considerations for organisations to review and
address.
The EU Financial Action Task Force (FATF) has also released
a paper setting out challenges, good practices and suggested
policy responses to address financial crime risks in the current
environment. While in the US, the Securities and Exchange
Commission (SEC) and the Financial Industry Regulatory
Authority (FINRA) continue to monitor and address ongoing
impacts of COVID-19 and issued guidance outlining specific
fraud risks for businesses.
Heightened corruption risks, and the attention being brought to
it, means that companies participating in the international
economy, especially those in the healthcare sector, should
prepare for increased scrutiny from enforcement authorities
when the pandemic subsides. This blog highlights some of the
areas you should be looking at now in order to avoid liability
and reputational damage.
AML and fraud
Companies and financial institutions should account for the
increased compliance risks created by the pandemic, as well as
the uptick in enforcement that will accompany the global
recovery.
For legal and compliance teams, therefore, it is more important
than ever to think carefully about building and sustaining strong
anti-money laundering (AML) and anti-corruption and bribery
(ABC) processes, so their organisations are not faced with
issues further down the line. This Lexology Pro Compliance
article highlights how organisations can leverage compliance
resources, including technology and people, as effectively as
possible to maintain a robust programme and navigate their
companies through the turmoil.
Given that the pandemic has created numerous opportunities
for fraud or scams to which companies may unknowingly
become exposed, this article outlines four common scams
targeting business and what compliance teams can do to
ensure robust measures are in place to spot red flags.
Events in the past including the 2008 financial crisis, the string
of corporate failures in the early 2000s, and natural disasters
can provide an insight into government enforcement responses
to various historical crises and act as a valuable guide to how
enforcement priorities will be directed in the current
environment. This article ways companies can focus on the
financial crime risks arising from the current crisis,
and proactively enhance their compliance programmes to
prevent or mitigate potential enforcement actions.
Due diligence
Over the past few months, Rebecca Rohr, VP for anti-
corruption and global trade, ethics & compliance office at
Hewlett Packard Enterprise and her team have been faced with
a new reality as the COVID-19 crisis has raised the risk of
bribery, fraud and financial crime. In an interview with Lexology
Pro Compliance, she discusses why shifting to remote anti-
corruption due diligence practices and reinforcing ethical
conduct will protect companies during and after the covid-19
crisis.
In the UK, the Financial Conduct Authority (FCA) recently
released a statement setting out its expectations for companies
to combat and prevent financial crime. While the authority
recognised that there may be some delays to monitoring or
review work, companies are advised not "change or switch-off"
any screening or monitoring controls to reduce operational
burdens, setting out a list of potential alternative means of
verification to help compliance teams cope.
While traditional measures, including face-to-face customer
contact and the collection of certified hard copies of documents
may now be impossible, many companies have been exploring
undertaking electronic due diligence to verify customer
identities, here is a summary of some of the measures being
taken.
The crisis has disrupted global supply chains in nearly every
industry, many companies have scrambled to find alternative
sources of supply but bringing on new and untested partners
brings with it significant compliance risks that should not be
ignored. As a result, companies should have a plan that is
designed to assess supplier risk in the current environment
and here are some of the key issues to consider.
Managing investigations
With most employees working from home or in other unusual
ways, its clear employers are grappling with new ways of
working, but what should employers do if they become aware of
an allegation of misconduct or wrongdoing? This article
considers whether a remote investigation is the right step to
take and what employers should bear in mind if they conclude
that it is.
Once the immediate danger from the pandemic dissipates,
many anticipate an increase in focused on the vast amounts of
relief funds that individuals and businesses received.
Companies would be well-advised to carefully plan for how they
might respond if they become the subject of a probe or an
unannounced search, including considerations such as
protecting client-attorney privilege, preserving evidence and
ensuring staff are well prepared.
Compliance management in a crisis
Many companies have been forced to shift stretched resources
and attention away from key business and operational units,
including compliance as a result of the pandemic, but it is of
vital importance to maintain an ethical culture and focus
resource to navigate this challenging new reality. Here is
a summary of specific areas of concern to compliance teams
and how best to mitigate them.
While managing compliance remotely presents certain
challenges, now is not the time to ignore obligations or best
practices and compliance officers should view this crisis as an
opportunity to invest in better virtual processes in order to avoid
bigger, more costly problems in the future. This alert outlines
some ways in which compliance professionals can continue to
accomplish their mission while adapting to our current reality.
Now more than ever, employees are looking for guidance to
understand expectations and to make sense of conflicting
priorities and business leaders want to know whether
compliance is going to be a trusted advisor in navigating these
uncertain times or just another bureaucratic headache. Here
are some important tips for compliance teams to ensure they
are best placed to lead the business during times of crisis and
how lessons learned from this period can help identify
opportunities to enhance compliance operations in the future.
Explore Lexology PRO Compliance
Lexology Pro Compliance, a unique information platform
for chief compliance officers, general counsel and their
teams. With a focus on anticorruption, antitrust and data
protection -three core compliance areas for businesses
around the world, Lexology PRO Compliance provides
users with analysis, interviews, legal research, know-how
materials, global comparative tools and more.
Find out more by clicking here.

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COVID-19 & anti-corruption: What

compliance teams need to know

European Union, Global, United Kingdom, USA May 14 2020

Lexology Pro Compliance provides an overview of some of

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