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Anti Corruption An Inside View – Practical Risks faced by GFIs & Tips for Risk Control By Benedicte Nolens Septembe

Anti Corruption An Inside View – Practical Risks faced by GFIs & Tips for Risk Control By Benedicte Nolens September 2011. Back Drop – Global.

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Anti Corruption An Inside View – Practical Risks faced by GFIs & Tips for Risk Control By Benedicte Nolens Septembe

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  1. Anti CorruptionAn Inside View – Practical Risks faced by GFIs &Tips for Risk ControlBy Benedicte NolensSeptember 2011

  2. Back Drop – Global Global - Since September 11, 2001, more than 100 countries have changed their laws related to financial services regulation, with the fight against political corruption playing a fundamental role. The Wolfsberg Group - Has issued an updated version of its global anti-corruption guidance, which is designed to help firms mitigate bribery risks. August 2011. Financial Action Task Force - FATF’s review of its recommendations could mean that corruption, tax evasion and issues on tax havens become more closely related to AML. September 2011. United States FCPA – Reporting acts of Foreign Bribery may entitle you to receive financial compensation, potentially millions of dollars…. [and] collect up to 30% of the fines that the government collects. In 2010 the US government collected over $1.5 Billion dollars in FCPA fines. Libya - Libya’s rebels are examining possible corruption at the country’s $65bn sovereign wealth fund and its links to the family of Colonel Muammar Gaddafi. August 2011. UK Anti-bribery Act – Has global reach; game-changing. July 2011. Egypt - Ex-President Hosni Mubarak has denied charges of corruption on the pending day of his trial in Cairo. August 2011.

  3. Back Drop – Closer to Home Vietnam - Under pressure from international anti-corruption laws to act. September 2011. China - Extensive public attention to matters of fraud and corruption. In 2010 Premier Wen Jiabao stated that steps would be taken to investigate "those who trade power for money"… [and that] FIs are one of the key focal areas of the government's anti-corruption fight. In July 2011, China executed two former vice-mayors for bribery. India - Anna Hazare's call for "India Against Corruption“. August 2011. Thailand - Amendments to Thailand's National Anti-Corruption Commission Act (NACC Act) have paved the way for the Office of the National Anti-Corruption Commission of Thailand (NACC) to pursue high-profile corruption cases. September 2011.

  4. Gifts & Entertainment Define government officials Set thresholds Focus on lavishness May differ between Private Bank and Investment Bank Discourage paying out of pocket Emphasize importance of adequacy of books and records Gifts Prohibit cash Prohibit facilitation payments Entertainment Focus on repetition Focus on family attendance Practical Risks & Tips for Risk Control

  5. PEP Clients DD, and Continuous risk assessment needed Finders, Third Parties & Senior Advisors DD Clear contractual terms, and Continuous risk assessment needed JVs & Strategic Partnerships Clear contractual agreement, and Cooperation on compliance policies needed Internships & Training Programs Fair evaluation process needed Per diems discouraged Charitable & Political contributions Threshold based fair evaluation process needed Practical Risks & Tips for Risk Control

  6. Conclusion • Globally, a fast evolving field • Regulatory incentives to pursue/ not to pursue bribery vary • Whistle blowing incentives vary • Enforcement margin is moving from cash bribes to the less obvious • Emails can bite • Inaccurate books and records bite • Look at the components of the GFIs compliance and control program • Build a culture of zero tolerance Top Down

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