The document provides an overview of heightened anti-corruption and financial crime risks faced by companies during the COVID-19 pandemic. It discusses guidance from regulators on key risk areas and offers tips for how compliance teams can respond. Specifically, it outlines increased risks of bribery, fraud, and money laundering. It also addresses challenges for performing proper due diligence and managing investigations remotely during this time. Compliance teams are advised to leverage resources effectively to maintain robust programs and prepare for potential increased enforcement after the crisis subsides.
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COVID-19 & anti-corruption - What compliance teams need to know.docx
The document provides an overview of heightened anti-corruption and financial crime risks faced by companies during the COVID-19 pandemic. It discusses guidance from regulators on key risk areas and offers tips for how compliance teams can respond. Specifically, it outlines increased risks of bribery, fraud, and money laundering. It also addresses challenges for performing proper due diligence and managing investigations remotely during this time. Compliance teams are advised to leverage resources effectively to maintain robust programs and prepare for potential increased enforcement after the crisis subsides.
The document provides an overview of heightened anti-corruption and financial crime risks faced by companies during the COVID-19 pandemic. It discusses guidance from regulators on key risk areas and offers tips for how compliance teams can respond. Specifically, it outlines increased risks of bribery, fraud, and money laundering. It also addresses challenges for performing proper due diligence and managing investigations remotely during this time. Compliance teams are advised to leverage resources effectively to maintain robust programs and prepare for potential increased enforcement after the crisis subsides.
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.