Welcome to Episode 5 of Compliance Man Chooses the Target with Tim Khasanov-Batirov.My goal is to highlight matters that should be on agenda of practitioners that deploy compliance programs in industries or countries of active FCPA enforcement. In each episode, I target three specific matters that you might like to address in the course of implementation of your compliance program. Today we will focus on compliance risks in Russia.

Target #1: Compliance Program.

Russia is number six in FCPA countdown of all times. In practice it means that, this jurisdiction should get your special attention in the course of deploying corporate compliance program. Your company could face risks in many business areas. What would be the best way to find out if you are on the safe side?  I suggest you to do assessment of the corporate compliance program in Russia based on the DOJ’s guidance called Evaluation of Corporate Compliance Programs.  The most effective way to do this exercise would be engagement of the outside counsel. While this tip might look obvious, I want to specifically mention the test, which should be addressed in order to get a full picture:

  • The international team from counsel side should consist of both US lawyers who have practical experience in FCPA matter along with Russian attorneys who would be able to tailor the US recommendations in accordance with Russian legislation.

I elaborate on importance of this test when we discuss the Target #3.

Target #2: Risk Assessment & Risk Appetite.

The vital part of your efforts on global arena is FCPA risk assessment. There is no chance that any company would be able to spend millions of dollars spreading compliance resources on unnecessary or minor issues.

In the very same time on practice, I have seen that sometimes company were not clear on particular risks they were trying to mitigate. In plain language, they were just wasting compliance resources by doing something for the sake of doing something. To be effective on a high-risk market you should define priorities, the most risky areas that you would like to address. As a second step, the company should define the risk appetite, or so to say, the internal standard on risk acceptance, that company agrees to take.

Target #3: Legislation.

While deploying international antibribery standards in the branch of your organization in Moscow do not ignore local laws.  The reasons are the following:

  • Sometimes Russian anticorruption legislation might contain provisions that in some instances are more restrictive than FCPA (for example, local requirement in certain cases to notify the former employer of your newly hired ex-governmental official);
  • Certain FCPA principles might collude local laws (for example, due diligence of your business partner should be construed not to breach Russian antitrust legislation);
  • Some pieces of legislation should be reviewed carefully prior to deployment of the compliance instruments (for example, Russian data privacy laws should be analyzed prior to launch of whistleblower line).

Join us for the next episode of Compliance Man Chooses the Target with Tim Khasanov-Batirov. 

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