Women, Influence & Power in Law Conference

September 18-19, 2014

The Capital HiltonWashington, DC

The Global Anti-Corruption Architecture

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Glenn T. Ware

Principal, International Anti-Corruption and Program Integrity

PwC

September 18, 2014

Global Anti-Corruption Architecture

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Key milestones in the modern anti-corruption movement

Council of Europe Civil Law Convention enters into force

Council of Europe Criminal Law Convention on Corruption enters into

force

Despite limited enforcement of the FCPA, business pressure to

“level the playing field”

1980sUS Foreign Corrupt Practices Act (FCPA)

1977

Transparency International founded

1993

Inter-American Convention Against Corruption enters into

force

1997

African Union Convention on Preventing and Combating Corruption enters into force

United Nations Convention Against Corruption enters into force

OECD Anti-Bribery Convention enters into force

1999

2002

2003

2005

2006

• 1977 - U.S. implemented anti-corruption legislation to outlaw bribery in business transactions overseas (Foreign Corrupt Practice Act – FCPA)

• U.S. businesses pressured United States government to globalize the anti-corruption regulatory regime in order to “level the playing field”

• 1993 - Founding of Transparency International; put pressure on international community to create global treaty architecture

• Mid 1990’s - Normative movement; proliferation of international instruments and declarations “outlawing” corruption.

Global Anti-Corruption Architecture

• Signed and ratified by states

• Require state action to implement

International Treaties

• Created by individual states

• Often benchmarked against international standards

Domestic Law

• Civil and criminal enforcement

• Subject to state jurisdiction limits

Enforcement

• Five major MDBs• Very active in anti-

corruption enforcement

• Administrative sanctions process

• Enforcement not tied to state jurisdictions

MultilateralDevelopment

Banks

Enforcement

International Treaty Enforcement Multilateral Development Bank Enforcement

How do anti-corruption treaties impact business?

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Emerging Multi-polar Enforcement Landscape

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United StatesForeign Corrupt Practices Act (FCPA)

BrazilClean Companies Act

AustraliaCriminal Code Act Section 70

AustriaAustrian Criminal Code Section 304-305

United KingdomU.K. Bribery Act (UKBA)

CanadaCorruption of Foreign Public Officials Act

GermanyCriminal Code Sections 299 and 331EU Corruption Act International Corruption Act

FinlandPenal Code Chapter 9,16, 40

SwitzerlandSwiss Penal Code Section 322

ChileCriminal Code 248, 251bisLegal Entities Criminal Liability Law

Emerging Multi-polar Enforcement Landscape

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African Development Bank

Asian Development Bank

European Bank for Reconstruction and Development

Inter-American Development Bank

The World Bank

Global Enforcement

Rise of Non-State Regulators

Emerging Multi-polar Enforcement Landscape

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Multilateral Development Banks – Assessing Your Risk

02Do you know how to navigate the MDB sanctions process?The MDB sanctions process is distinct from national law, and is unique to the MDBs themselves. This presents unique challenges for companies caught in the cross-hairs. Notable process features include (1) broad definitions of sanctionable practices, (2) permissive consideration of evidence, and (3) lower standards of proof characteristic of an administrative adjudicative process.

03Are you aware of potential criminal and civil liability?

MDB Risk

Do you know whether your project is MDB-financed?

MDBs operate across the full range of emerging markets – precisely the markets leading companies are targeting for growth. MDBs are particularly active in financing infrastructure, energy & mining, water & sanitation, health, transportation, and agriculture projects.

04How would cross-debarment

impact your global operations?

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MDB investigators routinely collaborate with and refer cases to national law enforcement authorities, which can lead to concurrent investigations and overlapping civil and criminal liability.

Debarment by one MDB may result in automatic debarment by other MDBs. US and foreign government agencies are also increasingly respecting MDB debarments in their own procurement processes.

Emerging Multi-polar Enforcement LandscapeTransboundary Cooperation

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Improper Payment Risks and NSRs

Nora R. Dannehy

Associate General CounselGlobal Ethics & Compliance

United Technologies

September 18, 2014

ControlsCompliance reviews / auditsTraining / certification

ControlsDue diligenceContractual Reps and warranties

Improper Payment Risks

Cash

Travel

Hospitality

Preferential hiring

Entertainment

Gifts

• Non-employee sales representatives • Minority J/V partners • Subcontractors• Distributors (including “one-time”)• Government intermediaries (e.g., Customs Clearance Agents,

Tax and Labor Law Consultants)• Collection Agencies

CharitableContributions

Govt. Official / Customer

Third Parties

10This slide contains no technical data subject to the EAR or ITAR.

Company

NSRs

Most FCPA cases involve corrupt payments made through consultants and sales representatives

Payment must be made “knowing” it would be directed in whole or in part to a foreign official

Knowing includes acting with “deliberate ignorance” or “conscious disregard.”

Ignorance is not Bliss

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history of corruption in the country

customer’s request to hire the NSR

high commissions

unusual payment patterns or financial arrangements

lack of transparency in expenses and accounting records

lack of qualifications or resources to perform the scope of work

refusal to agree to appropriate representations and warranties

family and/or personal relationships with government officials

Any kind of unethical behavior

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Red Flags

This page contains no technical data subject to the EAR or the ITAR

NSRs

Monitoring

NSR OVERSIGHT

• Annual Training and Certification• Annual media/database checks by

investigation firm (med/high risk NSRs)• Annual on-site assurance reviews with

in-person training (High Risk NSRs)

Resources and Tools to Enhance

Oversight:Unit representativeInvestigation firm

Audit Firm

• NSR contract with compensation caps, reps and warranties, and audit rights

• NSR questionnaire• NSR certification• Internal database checks• Sponsor letter & certification• NSR interview (legal)• Investigation firm report

• Investigation firm report (med/high-risk NSRs)

• Repeat full on-boarding procedures if material changes to NSR

Global Anti-Corruptionand Anti-Bribery

September 18, 2014

Mara V.J. Senn

Mara_Senn@aporter.com

202-942-6448

How Investigations Begin

Whistleblowers (internal and external)

Industry sweeps

Information from other ongoing government investigations

Referrals from the World Bank or other countries

Press stories

Self-reporting

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Foreign countries increasingly passing anti-corruption laws

• Coordination between national enforcement agencies

The number of formal foreign bribery actions by countries other than the US increased by 71% between 2012 and 2013.

China became the leading enforcer against their own government officials.

Carbon copy prosecutions

Multi-Jurisdictional Investigations

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Witness Interviews: Cross-Border Issues

Data privacy

Translations (in interviews and any forms)

Cultural pitfalls

Labor requirements

Security risks

Protect whistleblowers

Preserve the privilege

Other local legal issues

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7/24/201417

Resolving Investigations

Non-public

Declination

Global settlement

Non-prosecution agreement

Deferred prosecution agreement

Plea

Compliance

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Thank You If you have any questions, please contact:

Mara V.J. Senn ● Mara.Senn@aporter.com ● 202.942.6448

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Mara V.J. SennWashington, D.C.

Beyond the FCPA

Michele E. Beasley

General Counsel, Chief Compliance Officer, Secretary and Senior Vice President

First Wind

September 18, 2014

The US FCPA is only one of many anti-corruption regimes worldwide that apply to US companies:• UK Anti-Bribery Act• World Bank and other international trade/finance agencies’ anti-corruption rules• Internal laws of countries where US companies do business

Some legal systems prohibit only bribery of government officials; other rules apply more broadlyCrafting compliance policies that cause your company to simultaneously comply with all applicable laws and rules is critical• Statement of principles• Broad prohibition of improper acts• Don’t just restate or summarize the FCPA• Do think about aligning procedures to actual risks and corruption incentives, by

jurisdiction

Beyond the FCPA

Anti-Corruption for a Small Planet

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