powerpoint presentation · ongoing and unresolved fcpa-related investigation > high dollar cases...

9/20/2013

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©2013 TRACE International, Inc. Raising the Standard of Anti-Bribery Compliance Worldwide

A Shared-Cost Approach to Anti-Bribery Compliance

Alexandra Wrage

President, TRACE International

12th Annual Compliance & Ethics Institute


Alexandra Wrage President TRACE International, Inc.

Contact Information [email protected] (410) 990-0076

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FCPA & Anti-Bribery Enforcement

> Over 90 companies are currently the subject of an ongoing and unresolved FCPA-related investigation

> High dollar cases continue (Total fourth largest case in the history of FCPA enforcement)

> Rise of international, multi-agency cooperation

> Nearly 90 percent of FCPA cases involve conduct by 3rd parties

> More is expected of companies and their third parties each year

> Improving transparency across supply and marketing chains requires collaboration

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The Cost of Non-Compliance

Wal-Mart Bribery Probe

> FCPA-related professional fees and expenses approximately $1.25 million per working day

> $73 million in its first fiscal quarter of 2014 on probe

> $44 million on the investigations

> $29 million on a global compliance review and organizational enhancements

Total

> Fourth largest case in the history of the FCPA

> $398.2 million in total monetary sanctions

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Risks Associated with Third Parties

An Evolving Landscape

> Corruption and bribery

> Money-laundering

> International sanctions

> Forced and trafficked labor

> International crime

> Conflict mineral usage

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Time to Rethink Our Current Approach to Anti-Bribery

> Increasing number of international business partners

> Expanding risks: companies held accountable for a growing number of compliance issues

> Organizations are struggling to remain within “best practices”

> Third parties that want to embrace compliance are often confused about conflicting messages

> Cumulative effect: expense & waste

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New Approach to Due Diligence

>No waste

>No duplication of effort

>No needless expense for identical processes

>The comfort of working to a common standard

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Portable Due Diligence A New Approach to Due Diligence

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What is Portable Due Diligence?

> “Portable” reporting represents an evolution in due diligence

> Third parties complete due diligence process – to a high standard – one time per year at the entity’s expense

> Portable due diligence helps companies realistically manage risk across thousands or tens of thousands of suppliers

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Portable Due Diligence Benefits

> Shifts the burden of screening third parties away from companies

> Eliminates most of the expense and delay associated with the vetting process

> Enables third parties to share their verified due diligence information with all of their business partners

> Offers ongoing monitoring of third party relationships with daily screening of names against international sanctions and enforcement lists.

> Provides certified intermediaries with a valuable business credential and companies with the confidence they are looking for in selecting business partners

> Simplifies third party recertification process for companies

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Portable Due Diligence Solutions

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Transparent. Efficient.

> Based on social media principles, this global online platform captures, assesses, and shares baseline due diligence information on organizations and individuals across complex supply chains and assigns a universal ID number (TRAC number) to all approved applicants.

> A detailed review, analysis and approval process than enables candidates to own their verified due diligence reports. Candidates are required to complete a mandatory anti-bribery online training course and update their due diligence information annually.

Together TRAC and TRACEcertification provide companies and their business partners with a practical and comprehensive solution to

supply chain compliance.


Transparent. Efficient.

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What is TRAC?

TRACE Registered Access Code

1-23-456-7891-12

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> Unique identifying number for individuals, companies, partnerships, SOEs

> Linked to web profile of key identifying documentation and information

> Meets basic due diligence, know your customer, and screening standards

> Names searched against all relevant government watch lists

> Standardizes the information gathered globally for vendors, suppliers and low risk intermediaries on and third-party platform


Why Do We Need TRAC?

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Efficient

> the burden on companies and individuals to identify themselves repeatedly is growing

Reliable

> the burden on companies, banks, charities, airlines and others to confirm, reliably, the identification of partners and suppliers is growing

Free to access

> the expense of implementing due diligence at this level is preventing companies from acting


Who Can Get a TRAC?

> any company, entity, charity, business association or individual committed to transparency and improving their efficiency;

> most useful for suppliers, vendors, and other intermediaries to prove their identity, and verify their location;

Relying on TRACE’s traditional shared‐cost compliance model, entities receive a TRAC number and profile which will be available at no charge to anyone the TRAC‐holder designates

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Who Uses TRAC?

> the TRAC holder company, entity, charity, or individual uses the TRAC system to demonstrate transparency and improve their efficiency managing compliance;

> companies use the TRAC system to vet their supply chains and bring discipline to their procurement process by requiring partners and suppliers to obtain a TRAC;

> banks use TRAC to meet their know their customer requirements

> companies and private equity firms for initial screen on acquisition targets

> Other uses: identification program in aid programs, clinical trials, etc.

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How Does a Company Gain Access to Another’s TRAC?

> only with approval of the TRAC-holder;

> TRAC-holder provides the permission;

> receive individualized link by email;

> company can then view / print the compliance profile

TRAC-holder may allow access to their TRAC profile for as little as 24-hrs or as long as several years depending on the nature of their relationship

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Getting Started

> there is no charge to use as a compliance tool; TRAC holders pay US$80;

> identify a manageable set of initial vendors or business partners; need a list containing only a name and email address;

> get set up as a multinational company user of TRAC and send a custom message through the TRAC system to your supplier list that also contains model language explaining the TRAC process and directing them to the TRAC site to apply for a TRAC number;

> require TRAC number as part of accounts payable process;

> review TRAC profiles as necessary or in accordance with internal compliance program and expand use of TRAC on suppliers and business partners

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©2013 TRACE International, Inc. Raising the Standard of Anti-Bribery Compliance Worldwide 19


What is TRACEcertification?

> TRACEcertification is a detailed due diligence review designed for medium-to-high risk third party intermediaries

> Includes a requirement to complete anti-bribery training

> Candidates are required to update their due diligence information annually

> A review that reaches completion results in the certification of the candidate by TRACE

> Certified third parties own their verified due diligence reports and have the ability to share them with an unlimited number of global partners

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What does a TRACEcertification Report Include?

> Red flags identified

> Comprehensive anti-bribery questionnaire

> Company literature collected and reviewed

> Business registrations

> Names and CVs for owners, directors, and key employees

> Contact information for three business references

> Financial reference

> A signed Anti-Bribery Code of Conduct

> Reputational screening

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Why Do We Need TRACEcertification?

> The need for unbiased, trustworthy reporting on global business partners has never been greater as both compliance expectations and expenses rise.

> Corporations can no longer bear the expense in time and dollars of obtaining due diligence reports on every single business partner around the globe with whom they work.

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Value of TRAC and TRACEcertification to Large Multinationals

> Reduce costs and labor along the supply and marketing chain

> Provide ongoing monitoring of third party relationships with constant screening of names against international sanctions and enforcement lists that are updated every 24 hours

> Mitigate risk across complex supply and marketing chains

> Turn supply chain compliance into a reality for corporations with thousands or hundreds of thousands of suppliers

> Corporations pay nothing to access verified due diligence information

> Provide compliance certifications on issues such as anti-bribery, forced labor, and conflict minerals

> Encourage supply chain entities to think about compliance issues and their reputation

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Value of TRAC and TRACEcertification to Suppliers and Intermediaries

Save time and enhance reputation

> Efficiently distribute information without duplicating the labor-intensive vendor qualification process.

> Promote transparency to third party companies and enable them to control and disseminate their identifying information to partners.

> Marketing value in demonstrated transparency

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Other Cost-Effective Anti-Bribery Solutions

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Ascertaining Best Practices

> The OECD’s Good Practice Guidance http://www.oecd.org/investment/anti-bribery/

> U.K. Serious Fraud Office Guidance http://www.sfo.gov.uk/bribery--corruption.aspx

> DOJ & SEC Resource Guide to the Foreign Corrupt Practices Act http://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf

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Written Policies

UNODC Database (www.unodc.org)

> Anti-corruption policies and measures of the Fortune Global 500

UN TRACK (www.track.unodc.org)

> Tools & Resources for Anti-Corruption Knowledge

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http://www.oecd.org/investment/anti-bribery/




http://www.sfo.gov.uk/bribery--corruption.aspx




http://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf







http://www.unodc.org/

http://www.track.unodc.org/

http://www.track.unodc.org/

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Written Policies

Gift and Hospitality Guidelines

> The US Department of State maintains per diem thresholds for almost all cities, broken down by meals, accommodation and incidentals.

> http://aoprals.state.gov/web920/per_diem.asp

Facilitation Payments

> Expensive and risky

> Flat prohibitions can save companies money

> Guidebook: The High Cost of Small Bribes

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Training Tools

Webcasts and Videos

> A combination of on-line training and webcasts can be very cost-effective.

> Webcasts: an opportunity to ask questions, which can educate trainers on specific challenges that employees face.

RESIST Training Tools

> Pamphlet providing brief scenarios aimed at training employees to avoid extortion & online video tool (www.icc-france.net)

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Training Tools

TRACE Training Video

> Toxic Transactions: Bribery, Extortion & the High Price of Bad Business

Ethicana (www.ethicana.org)

> Video on corruption in the construction industry

Global Infrastructure Anti-Corruption Center (GIACC) Anti-Corruption Training Manual

> Training manual designed for infrastructure, construction, and engineering sectors.

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http://aoprals.state.gov/web920/per_diem.asp

http://aoprals.state.gov/web920/per_diem.asp

http://www.icc-france.net/



http://www.ethicana.org/

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FREE Anti-Corruption Resources

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Resources

TRACE Compendium

> Fully searchable database of comprehensive summaries of case law.

> 2012 TRACE Global Enforcement Report – trends by country and by industry

> Online center for anti-corruption news

> For qualified nonprofits, TrustLaw will link organizations with lawyers willing to represent them in corruption-related matters.

TrustLaw

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Resources

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OAS’s Anti-Corruption Portal of the Americas

> Provides model laws, training programs and tools categorized by topic.

Group of States Against Corruption (GRECO)

> Offers resources for sharing best practices, as well as reports on anticorruption legislation and enforcement in member states.

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Follow us online at www.TRACEinternational.org

facebook.com/TRACEinternational

linkedin.com/company/TRACE-international-inc.

twitter.com/TRACE_inc

youtube.com/TRACEinternational

Questions?

Visit TRACnumber.com to use your FREE TRAC Code: SCCE2013

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http://www.traceinternational.org/

https://www.facebook.com/TRACEInternational

http://www.linkedin.com/company/trace-international-inc.





https://twitter.com/trace_inc

http://www.youtube.com/TRACEInternational

http://www.tracnumber.com/

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