United States Strategy on Countering Corruption

  • Source: www.whitehouse.gov

Treliant Takeaway:

Companies need to review and refresh their existing anti-bribery and corruption policies and controls, as well as consider due diligence with high-risk third parties; and the intersection with anti-money laundering policies and processes. Our team at Treliant, which includes compliance professionals, ex-regulators, and auditors has deep experience across FCPA, investigations, Anti-Money Laundering and Economic Sanctions program development, and assurance and remediation; and is well equipped to help our clients build strong and effective programs to respond to any government scrutiny.

Highlights:

On December 6, 2021 the White House launched its first ever U.S. Strategy on Countering Corruption.  The strategy coincides with several other policy efforts including updates to the DOJ’s enforcement policy in October 2021 and the November 2021 OECD’s revised Recommendation for Additional Combating Bribery of Overseas Public Officers in Worldwide Enterprise Transactions.   The strategy is centered on Five (implementation) “Pillars”:

PILLAR ONE: Modernizing, Coordinating and Resourcing US Government Corruption Efforts.

A recognition of an up-to-date concerted government effort including data sharing and increased intelligence and analysis of corrupt actors, and focus on regional, thematic and sectoral priorities.

PILLAR TWO: Curbing Illicit Finance.  Coordinating activities with allies to deal with recognized vulnerabilities in the U.S. and international financial systems including, issuing beneficial ownership transparency regulations for opaque corporate structures; targeting new “gatekeepers” (lawyers, accountants, trust service providers..)

PILLAR THREE: Holding Corrupt Actors Accountable.  Working with the private sector to encourage and enforce adoption of anti-money laundering regimes; elevating efforts to support and protect actors who expose corruption; and establishing asset reward programs.

PILLAR FOUR: Preserving and Strengthening the Multilateral Anti-Corruption Architecture.  Prioritizing U.S. support for multilateral initiatives, organizations, and standards that move countries to make real improvements in countering corruption.

PILLAR FIVE:  Improving Diplomatic Engagement and Leveraging Foreign Assistance Resources to Achieve Anti-Corruption Goals:  Elevating anti-corruption work within U.S. diplomatic and foreign assistance engagement including integration of security assistance into military planning, bolstering public sector capacity, and support of anti-corruption actors such as internal audit and oversight institutions.

This significantly extends the national security (research, data collection and analysis) capabilities to combat what has been traditionally regulatory and criminal activity; who is defined as an ‘actor’; additional staffing for, and monitoring of, beneficial ownership registry; opens the door for proposals to expand recordkeeping and reporting requirements to previously opaque sectors; and likely increase investigations against institutions that were more difficult to target in the past.

 KEY TAKEAWAYS

A critical element of the strategy is combatting illicit finance and strengthening the existing anti-money laundering regulatory regime.   This means that companies who have only focused on FCPA must extend their programs to include AML, False Claims Act, bid-rigging, market manipulation and sanctions.

Many more actors in the transaction, supply chain cycle will be subject to review highlighting the need to identify potential enablers and facilitators and re-examine domestic and foreign service offerings how services are provided including dealings with third parties.

Reporting and record-keeping requirements for non -financed real-estate transactions which creates additional needs to scrutinize internal processes and controls that ensure compliance with decision-making, governance and execution.

Author

David Krestin

David Krestin, a Senior Advisor with Treliant, is an experienced financial services audit and risk professional who has held executive leadership positions with global investment and commercial banking institutions. David has an extensive history working with capital markets, wealth management, and wholesale banking products and interfacing with the agencies overseeing…