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31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for Business Ventures – Safe Harbor in M&A

White collar defense practitioners have long called for a specific safe harbor for companies in the mergers and acquisition context where they meet the criteria set out by the DOJ. This clarion call was answered in the summer, 2018 when in July 2018, the DOJ announced a revision to the FCPA Corporation Enforcement Policy, specifically around mergers and acquisitions. The new language read:
M&A Due Diligence and Remediation: The Department recognizes the potential benefits of corporate mergers and acquisitions, particularly when the acquiring entity has a robust compliance program in place and implements that program as quickly as practicable at the merged or acquired entity. Accordingly, where a company undertakes a merger or acquisition, uncovers misconduct through thorough and timely due diligence or, in appropriate instances, through post-acquisition audits or compliance integration efforts, and voluntarily self-discloses the misconduct and otherwise takes action consistent with this Policy (including, among other requirements, the timely implementation of an effective compliance program at the merged or acquired entity), there will be a presumption of a declination in accordance with and subject to the other requirements of this Policy.

In announcing the change, then Deputy Assistant Attorney General Matthew Miner, that while the FCPA Resource Guide did provide some guidance on what may constitute a safe harbor; that word ‘may’ was a “sticking point for corporate management when deciding whether and how to proceed with a potential merger or acquisition. There is a big difference between a theoretical outcome and one that is concrete and presumptively available.”
Three Key Takeaways

  1. The FCPA Corporate Enforcement Policy was amended in 2018 to provide a safe harbor in the M&A context.
  2. Pre and post-acquisition compliance work must be equally robust.
  3. If you find misconduct, report and remediate.
Categories
FCPA Compliance Report

HHR Webinar on Strategic Competition Between US and China

Welcome to the award-winning FCPA Compliance Report, the longest running podcast in compliance. Today, we have a special edition of the FCPA Compliance Report. On Wednesday, February 22, 2023, Hughes Hubbard & Reed and BGR Group co-hosted a virtual panel discussion on the U.S. House of Representative’s recent resolution to establish a Select Committee on Strategic Competition Between the United States and China as well as major changes in U.S.-China trade policy and its impact on U.S. and Chinese businesses with operations in both jurisdictions.

The panel was moderated by Hughes Hubbard partner and head of the Sanctions, Export Controls & Anti-Money Laundering practice group, Ryan Fayhee, who is joined by fellow international trade partner and chair of Hughes Hubbard’s China Practice, Roy Liu, as well as former staff director of the Senate Foreign Relations Committee, Lester Munson, co-head of the International Practice at BGR Group. This is a recording of their presentation.

Key Highlights

U.S. Export Control Regulations and Restrictions [00:04:51]

The Effectiveness of the China Select Committee in the House of Representatives. [00:09:19]

The Role of Bipartisanship in Overlapping Authorities [00:12:51]

Impact of U.S. Computer Chip Industry Subsidies [00:16:37]

The Presidential Authority and the US-Taiwan Relationship [00:20:19]

The Potential of Retaliatory Measures in China [00:23:42]

Navigating Chinese Investment in the US Amid Changing Protocols[00:28:14]

The Impact of Commerce on Bilateral Relationships [00:32:13]

 Impact of China on Western Companies and Semiconductor Industry [00:40:01]

Exploring Business Opportunities in Changing China-US Relations [00:44:11]

US-China Relations and Their Impact on Global Politics [00:48:02]

The Impact of Congressional Hearings on Chinese Companies and Businesses Partnering with China [00:51:53]

Reforming the NDAA Process in 2024[00:56:00]

Original Source:

HHR House Committee on Strategic Competition.mov from Hughes Hubbard & Reed LLP on Vimeo.

Categories
Greetings and Felicitations

Ben Locwin – Navigating Postmodernism

Welcome to the Greetings and Felicitations, a podcast where I explore topics which might not seem to be directly related to compliance but clearly influence our profession. Today we delve into the most controversial topics of the day with guest Ben Locwin. We speak about postmodernism – a philosophical movement that emerged in the late 1800s, challenging traditional views of universal truths and the idea of an objective reality. Ben believes that rejecting the thought process of our predecessors has become popular, with an emphasis on fashion and social media. He says it’s important to get facts from reliable sources, not just from viral content. Ben stressed the importance of primary education, advocating for the teaching of scientific methods to uphold the value of evidence-based opinion. Join us on Greetings and Felicitations as we explore the pressing topics of today with genuine and thoughtful conversations.

Key Highlights

The Postmodern rejection of the Enlightenment and its impact on Society [00:05:10]

Innovation and Disruption in Established Fields of Science [00:09:30]

The Impact of Popular Culture on Society [00:13:41]

The Perils of Social Media’s Echo Chambers: Recognizing the Need for Evidence-Based Truths [00:17:51]

The Dangers of Alternative Facts [00:22:10]

Role of Primary Education in Constructive Correction and Critical Thinking [00:26:48]

Notable Quotes

1.     “It’s really a broad topic. It is an interesting 1 to me because it’s  ultimately very philosophical, and I tend to try to stray away from that. On a daily basis.”

2.     “Postmodernism suggests that it’s fashionable to reject clear minded rational thinking. It basically distinguishes itself from other schools of thought by rejecting universal truths, by rejecting an objective reality.”

3.     “Another big 1 is reject any idea that through the use of reason and logic that human beings can change themselves in societies for the better.”

4.     “John Adams once observed, I’ll have to paraphrase it, but something like facts are stubborn things. And whatever may be our wishes or inclinations or the dictates of our passions. They can’t alter the state of facts and evidence.””

Resources

Ben Locwin on LinkedIn

Categories
2 Gurus Talk Compliance

2 Gurus Talk Compliance – Episode 1

What happens when two top compliance commentators get together? They talk compliance, of course. Join Kristy Grant-Hart and Tom Fox for their new podcast, 2 Gurus Talk Compliance! But it is not simply Kristy and Tom talking about compliance. In this podcast series, Kristy and Tom also review other top commentators in compliance. In this podcast, we will consider all things compliance, corporate ethics, ESG, governance, and whatever else is on our minds and the minds of other experts in the field. Kristy and Tom explore all of these topics with expertise and wit.

In this inaugural episode, they discuss the latest compliance trends and news, including two Supreme Court cases that have implications for the compliance profession. They also cover the Department of Justice and whistleblower trends, taking a look at Miranda and Upjohn’s warnings and increasing numbers of whistleblower reports to the SEC. They also dive into an article from the Harvard Law School Forum on corporate governance and discuss the Illinois Biometric law. Join the conversation and discover the latest on compliance and regulations with 2 Gurus Talk Compliance.

Highlights Include

The Role of In-House Attorneys in Communication Between Outside Counsel and Businesses [00:05:17]

Supreme Court Decision on the Future of the CFPB [00:09:11]

Impact of the Colorado Draft Regulation on Artificial Intelligence Compliance Programs [00:13:23]

The Benefits of Automated Data Deletion [00:17:23]

A Miranda component to corporate Upjohn Warnings [00:21:25]

The Obligation of Society to Address Climate Change [00:25:33]

The Benefits of Self-Disclosure in the DOJ Justice System [00:29:18]

The Role of the Board in Overseeing Third Parties in High-Risk Countries [00:33:14]

The Impact of Whistleblowers on the SEC [00:40:54]

White Castle’s Violation of Illinois Biometric Law [00:45:05]

Notable Quotes

  1. The DOJ is urging a federal judge to sanction Google’s parent, Alphabet, for its practice of setting employee chats to auto delete despite promising to preserve records.”
  2. “It goes beyond the specifics of this law, something you and I have talked about for several years now, that the compliance function and the CCO is well perhaps the most well-suited corporate discipline to deal with these new initiatives because it’s the basic framework of compliance that you and I have worked with for 15 years.”
  3. “Most compliance programs just don’t have good frameworks for things like AI or for big data even though we’ve been using that word for a long time.”

Resources

  1. Boards and 3rd Party Risk Oversight
  2. CO Draft AI Rules for Insurance
  3. Miranda Warnings in Corp Investigation
  4. Current whistleblowing landscape
  5. Has the stature of the CCO changed? 
  6. Analysis of the DOJ’s update to the self-disclosure program
  7. Supreme Court considering defunding the CFTC
  8. Trends in state privacy law   
  9. Litigation holds and records retention/Google/DOJ  
  10. Individuals charged – first enforcement action 2023 

Connect with Kristy Grant-Hart on LinkedIn

Spark Consulting

Connect with Tom Fox on Linkedin

Categories
Daily Compliance News

March 10, 2023 – The Convicted Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News: