Month: July 2011

The First Days of the UK Bribery Act

It’s a been a few days since the UK’s Bribery Act became effective, making some questionable corporate behavior become clearly illegal. There have been thousands of news stories, legal alerts, and dire warnings about the line in the sand drawn on its date of effectiveness, July 1.

Now, there is a bit a waiting, a calm before the storm, until we hear the first government action. Companies with a UK presence have most likely taken a look at their operations and implemented the changes needed to comply with the new law. (Perhaps that is optimistic.) The SFO now has a loaded gun and is likely on the hunt for behavior that violates the new law.

It took decades before the FCPA became actively enforced. I don’t expect it will take as long to see the first action under the Bribery Act. The SFO has already seen how effective FCPA has been in the United States. (If you consider “effective” to be good headlines and relatively easy wins.)

When will the first action happen? Will it be a government investigation or self-reporting? What industry will be first?

Sources:

Fourth of July and Compliance

What better way to celebrate the independence of the United States than by taking the day off from work, grilling meat, and watching stuff blow up.

In colonial Boston, official proclamations were read from the Old State House balcony, looking down State Street towards Long Wharf.

Each July 4th, the Captain Commanding of the Ancient and Honorable Artillery Company reads the Declaration of Independence from the balcony of the Old State House. The reading of the Declaration of Independence dates back to July 18, 1776, when Colonel Thomas Crafts performed this duty for the first time.

Compliance Bits and Pieces for July 1

These are some compliance-related stories that caught my eye.

Okay, so this first one is not about compliance, but about the Tour de France that starts on Saturday morning for its three week race across France.

Top 10 Reasons Geeks Should Love the Tour de France in Wired’s GeekDad.

Fraud in Commercial Real Estate: Tips & Red Flags on Money Laundering & Terrorist Financings by Keith Mullen in Tough Times for Lenders

In the late 2006, FinCEN issued a study highlighting money laundering trends in the commercial real estate industry. In the information reviewed for this study, the most commonly reported suspected illicit financial activity associated with the commercial real estate sector is money laundering to promote tax evasion. … This should NOT be a surprise: Federal examiners have issued a 439 page manual on this topic. One good way to jump into the topic is to examine Appendix F to the manual, which contains a nice list of red flags for money laundering and terrorist financing. Here are some of the topics covered in the list –

How ‘Bad Boy’ Guarantees Can Make a Non-Recourse Loan Suddenly Become Recourse by Robert A. Silverman in National Real Estate Investor

Recent court decisions should serve as a warning to borrowers to carefully review the wording of recourse carve-out guarantees in both existing and proposed mortgages, lest they be held fully liable for real estate loans. While “non-recourse” loans typically require carve-out guarantees allowing the lender to pursue the guarantor’s assets in instances of “bad-boy” acts — such as waste, funds misapplication, environmental issues and voluntary bankruptcy filings — the precise wording of the guarantees is crucial.

The Bribery Act – Foreign public officials & why you should care who they are

Certain countries will contain many publicly owned businesses. For example, some corporations take the view that there is strong likelihood that local partners in China may constitute a public official. As a result they err on the side of caution and treat all local partners they deal with in that jurisdiction as state owned enterprises and the people they work for as foreign public officials.

5 Things to Know When Merging Compliance and Ethics Programs by John Martin, Bill Hughes and Edward Applegate in Corporate Compliance Insights

Corporate America has tried the stick and is now trying the carrot approach. Why is it so hard to integrate compliance with ethics? Here are five things to consider when attempting to integrate or combine compliance with ethics.

Creating a “Gap” Analysis and Sharing Issues with Management by Michael Portorti in FCPA Complaince and Ethics Blog

The Gap Analysis document can then be used to track status of deficiencies and used as a source to update Executive Management as necessary. It also can expose bottlenecks and identify potential revisions for controls that need additional tailoring to fit in with the Company’s operational environment. Accumulating deficiencies in this manner keeps all parties up-to-date on remediation progress so overall compliance efforts can move along at an acceptable rate.