Treliant Takeaway…Wolfsberg Group Issues Updated Anti-Bribery and Corruption Compliance Program Guidance
- Source: wolfsberg-principles.com
Possessing the ability to prevent, identify, and remediate potential bribery and corruption related misconduct is vital in this heightened regulatory environment. Treliant’s Global Financial Crimes Compliance (GFCC) team can assist in developing and maintaining effective corporate compliance programs for financial institutions of all sizes. Treliant’s team includes experienced industry leaders and subject matter experts such as former compliance officers, audit professionals, and regulatory and supervisory examiners.
On April 17, 2023, the Switzerland based Wolfsberg Group published an updated Anti-Bribery and Corruption (“ABC”) Compliance Program Guidance document, which supersedes the 2017 version. The guidance is designed to promote a culture of ethical business practices and compliance with ABC regulatory requirements.
The updated guidance includes outcomes from recent enforcement actions and specifically addresses updates to bribery and corruption red flags. In addition, the guidance expands on customer and transaction corruption risks and adds a section on identifying, reporting and mitigating emerging bribery and corruption risks.
The Wolfsberg Group’s Guidance is a risk-based approach for the adequate development of compliance programs to prevent, detect, and report acts of bribery and corruption. Although no compliance program can prevent or protect against bribery and corruption risks entirely, this guidance can help financial institutions alleviate risk by using elements including but not limited to:
- An applicable firm wide ABC policy;
- Governance with roles and responsibilities and access to top management;
- Periodic risk assessment to assess the nature and extent of the bribery and corruption risks, the establishment of a controls environment covering risks associated with anything of value, third party providers and customer related transaction risks, investments and acquisitions;
- Training and awareness including the sharing of lessons learned from internal and external events for continuous evaluation of the compliance program adequacy; and
- Monitoring and testing for compliance with controls to identify failure to act in a manner consistent with the financial institution’s business principles/policies/codes of conduct/applicable laws or regulations.
As mentioned previously, the newly published guidance includes an update to the list of bribery and corruption red flags that commonly signal potential misconduct. These red flags may be identified during various business activities, including general business activity, gifts and entertainment and charitable contributions. These red flags, in most cases, may warrant enhanced due diligence or investigation. The following items represent the new additions to the 2017 list:
- No obvious added commercial value added by the person or entity of concern;
- Use of consultants or vendors who serve no clear purpose;
- Use of nominees or proxies with no obvious commercial purpose;
- Use of entities with names mirroring more reputable entities with no connections to those reputable entities;
- Key contacts’ use of non-official communication channels such as personal email, text messages, or third-party applications;
- Deviation from standard procurement practice;
- Unusual involvement of public officials in commercial matters;
- Sudden unexplained resignations of key professionals;
- Recommendation to rely on the customer’s and or intermediary’s due diligence without written evidence of what the due diligence includes; and
- High-value and or complex deals or transactions that bypass or exclude the involvement of compliance in the review processes