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Congress Fills a Corruption Hole: The Foreign Extortion Prevention Act (FEPA)

The compliance community has long recognized the gaping hole in the Foreign Corrupt Practices Act (FCPA). As a supply side law, it criminalizes the payment of bribes, not the demand to pay a bribe or extortion. The gap was recently filled by the Foreign Extortion Prevention Act (FEPA) which extended crucial protections to Americans working abroad and provides the Department of Justice (DOJ) with a potent new tool. By criminalizing both the giving and demanding of foreign bribes, FEPA seeks to level the playing field for American workers while fostering ethical business practices globally. FEPA represents a promising solution to protect Americans working overseas, promote fair business competition, and combat corruption on a global scale. With its potential to bring about meaningful change, FEPA is a vital step in safeguarding American values and interests in the international arena. Sam Rubenfeld, cited to Scott Greytak, the director of advocacy for Transparency International US, for the following, “FEPA is a landmark, bipartisan law that holds the potential to help root out foreign corruption at its source. It is arguably the most sweeping and consequential foreign bribery law in nearly half a century.”

This legislation fills a significant gap in anti-corruption measures and raises important questions about its implications for the enforcement of the Foreign Corrupt Practices Act (FCPA) and the cooperation expected from companies involved in bribery schemes. FEPA, part of the National Defense Authorization Act (NDAA), addresses a long-standing concern among anti-corruption advocates. While the FCPA has been effective in penalizing US companies for offering bribes to foreign officials, there has been a lack of legal mechanisms to hold foreign government officials accountable for accepting these bribes. FEPA now provides prosecutors with the means to pursue such officials.

One of the key aspects of FEPA is that it criminalizes the solicitation or acceptance of bribes by foreign government officials from US entities. This complements the FCPA, which focuses on the offering of bribes by US companies. By targeting both sides of the bribery equation, FEPA aims to create a more comprehensive and effective framework for combating corruption.

However, the implementation of FEPA is not without its challenges. One of the main challenges is the extradition of foreign officials for prosecution, particularly from countries like Russia or China. Extradition processes can be complex and time-consuming, and cooperation from foreign governments may not always be forthcoming. This poses a significant hurdle in holding foreign officials accountable under FEPA.

Another notable feature of FEPA is the introduction of a “name and shame” list. This list is intended to publicly identify, and shame foreign government officials involved in bribery schemes. While this may serve as a deterrent, it could also have unintended consequences. For instance, it may impact Transparency International’s corruption perception indexes, potentially affecting the rankings of countries and their relations with the US. Additionally, it could have implications for US companies operating in those countries, potentially straining foreign relations.

The passage of FEPA raises important considerations for compliance officers and companies. They need to assess how this new law may impact their existing controls and policies. The arrival of FEPA as a tool to combat corruption is undoubtedly a positive development. However, it is crucial to carefully evaluate the potential implications for FCPA prosecutions and the cooperation expected from companies involved in bribery cases.

Compliance officers should also consider the potential changes in the calculus for prosecutors. With FEPA in place, prosecutors may now have the legal means to pursue foreign government officials complicit in bribery schemes. This raises questions about the extent to which companies will be required to assist the DOJ in pursuing FEPA cases alongside FCPA cases. Companies may need to provide testimony and cooperate in the prosecution of foreign officials, potentially impacting the resolution of FCPA violations.

Looking ahead, it is essential for the DOJ to provide clarity on how FEPA will be utilized and what expectations companies should have when caught up in FEPA-related investigations. Transparency and guidance from the Department of Justice will help companies navigate the potential challenges and ensure compliance with the law.

The bottom line is that FEPA represents a significant step in the fight against corruption. By criminalizing the solicitation or acceptance of bribes by foreign government officials from US entities, FEPA fills a crucial gap in anti-corruption measures. However, challenges remain in extraditing foreign officials for prosecution and managing the potential consequences of the “name and shame” list. Compliance officers and companies must carefully consider the implications of FEPA on their operations and update their controls and policies accordingly. With proper guidance and cooperation, FEPA can be a powerful tool in combating corruption and promoting ethical business practices.

Penalties under FEPA include (from Transparency International)

  1. Expanding Legal Protections: FEPA amendment U.S. bribery law (18 U.S.C. § 201) to make it illegal for foreign officials to corruptly demand, seek, receive, or accept bribes under two crucial circumstances:
  • From U.S. individuals or companies.
  • From any person while within the United States, in connection with obtaining or retaining business.
  1. Stringent Penalties: Those found guilty of violating FEPA could face severe consequences, including:
  • Criminal fines of up to $250,000 or three times the value of the bribe, whichever is greater.
  • Prison sentences of up to 15 years.
  1. Transparency and Accountability: FEPA introduces a vital accountability mechanism by requiring the DOJ to publish an annual report. It will include the following:
  • It examines the scale and nature of foreign bribe demands against American companies, shedding light on the extent of the issue.
  • It evaluates the effectiveness of U.S. diplomatic efforts aimed at safeguarding American businesses from foreign bribe demands.
  • It assesses the efforts of foreign governments to prosecute individuals involved in corrupt practices against American interests.

Matt Kelly and I take a deep dive into FEPA on this week’s Compliance into the Weeds. To listen, click here.

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Greetings and Felicitations

Podfest Expo 2024 Speaker Preview Series – Jeff Dwoskin

In this episode of the PodfestExpo 2024 Speaker Preview Podcasts series, I visit Jeff Dwoskin, founder of Stampede Social and host of the Classic Conversations podcast, and discuss his presentation at PodfestExpo. Some of the issues we tackle in this podcast are:

  • How to use Instagram much more effectively as a lead generator.
  • How Chris Krimitsos brings out the best in everyone.
  • Why you should attend PodfestExpo 2024.

I’m hoping you’ll be able to join me at PodfestExpo 2024, which Podfest Global is hosting. This year’s event will be the 10th anniversary and will be held January 25–28, 2024, at the Wyndham in Orlando, Florida. The line-up of this year’s event is simply first-rate, with some of the top names in podcasting.

Podfest Expo is a community of people interested in and passionate about sharing their voice and message through powerful audio and video mediums. We’re proud to unite as many people as possible to learn, get inspired, and grow better together.

PodfestExpo is so much more than just a mere conference. While we pride ourselves on featuring the most engaging speakers, exciting topics, and in-depth content, the thing that sets the PodfestExpo event apart from all others is the tight-knit community we’ve been building since 2013. You don’t just attend a Podfest event – you become part of the Podfest family.

Whether you’re new to podcasting or a veteran podcaster looking to innovate and improve your podcast, our easy-to-understand Conference Topics allow you to customize a daily agenda based on what you’re most interested in learning. No matter your skill level or experience, PodfestExpo 2024 has plenty to offer!

I hope you can join me at the event. For information on the event, click here. As an extra benefit to listeners of this podcast, Podfest Expo is offering a discount on the registration price. Enter the discount code “Listener.”.

PodfestExpo 204 is a production of Podfest Global, which sponsors this podcast series.

Jeff Dwoskin on LinkedIn

Stampede Social

Classic Conversations Podcast

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Data Analytics: Day 13 – Data Management Automation

Data automation not only streamlines the compliance process but also provides transparency and visibility into the decision-making process. There is a clear importance to connecting people, data, process systems, and tools in one place. This eliminates the need for compliance officers to navigate multiple systems and tools, allowing them to focus on risk-based due diligence. By having a clear understanding of the decision tree and the ability to adjust the automation process, organizations can trust the automation while maintaining control and oversight.

The importance of automation for data analysis in compliance programs cannot be overstated. Organizations need to have visibility into their data at their fingertips to ensure regulatory compliance and mitigate risks. Automation streamlines the compliance process, provides transparency, and allows for adaptability in the face of evolving regulations and risks. By leveraging data analysis, organizations can identify deviations, improve cycle times, enhance training effectiveness, and make informed decisions. Board-level involvement is crucial in overseeing the automation and data analysis process, recognizing its strategic value, and ensuring its effective implementation. With the advent of AI and intelligent approaches, organizations that do not embrace automation and data analysis may suffer in the long run. Trust but verify, and always prioritize visibility and transparency in compliance programs.

Three key takeaways:

  1. Automation not only streamlines the compliance process but also provides transparency and visibility into the decision-making process.
  2. There is a need for board-level involvement in overseeing the automation and data analysis processes.
  3. Through analyzing deviations from the expected path, compliance officers can identify areas that require additional process controls or adjustments.

Check out KonaAI here.

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Blog

The DOJ on the Need for Compliance Program Data Analytics

The Department of Justice (DOJ) is increasingly utilizing data analytics for proactive enforcement, signaling a significant shift in their approach to combating white-collar crime. This move reflects the recognition of data analytics as a crucial component of compliance programs, extending beyond historical reporting to transactional details and third-party interactions.

Recently, Acting Principal Deputy Assistant Attorney General Nicole M. Argentieri Delivered remarks at the 39th International Conference on the Foreign Corrupt Practices Act (FCPA). She stated, “the Criminal Division has long been an innovator in using data to enhance its investigations and prosecutions. I am proud to announce that we are taking that experience and expertise with data analysis and applying these tools to our FCPA investigations. Through investments in personnel, we have improved our ability to harness and analyze available data — both public and non-public — to identify potential wrongdoing involving foreign corruption. This approach has already generated successful FCPA investigations and prosecutions.” 

In this week’s episode of “Data Driven Compliance,” host Tom Fox and Vince Walden, discussed the importance of data analytics in the DOJ’s enforcement efforts was discussed. Matt Galvin, an expert leading the DOJ’s data analytics initiative, highlighted the proactive use of data to generate cases related to the FCPA and emphasized that this is just the beginning.

The DOJ expects companies to adopt a similar data-driven approach to compliance. Vince Walden, cited to the Argentieri speech where she stated, “just as we are upping our game when it comes to data analytics, we expect companies to do the same.” This expectation extends beyond simply tracking trainings, policies, and investigations. The DOJ’s focus is on monitoring third parties throughout the lifespan of the relationship, not just during the onboarding process.

Walden emphasized that while due diligence and background checks are essential, the real risk of fraud occurs during the actual business transactions with third parties. Therefore, companies need to go beyond initial checks and continuously monitor high-risk vendors, contract terms, and other relevant data sources. By mapping risks to data sources and implementing effective tests, companies can identify and prioritize risky transactions.

The increasing accessibility and cost-effectiveness of data analytics have made it a viable option for companies of all sizes. It can help companies demonstrate effective compliance programs, uncover hidden financial irregularities, and improve overall efficiency. The importance of continuous data analysis in compliance programs was highlighted by the Bank of America enforcement action by the Consumer Financial Protection Bureau (CFPB).

The DOJ’s use of data analytics is not limited to public data available from public companies. They are also leveraging private information, which could potentially include information obtained during investigations within specific industries. The DOJ has made significant investments in technology and resources to enhance their enforcement capabilities, taking inspiration from techniques used in the healthcare division to combat fraud.

However, implementing a data-driven compliance program comes with its own set of challenges. There is still confusion among the compliance community regarding what data analytics entails and how it should be applied. Walden stressed the need for a process-oriented approach rather than treating it as a one-time project. Data analytics should be integrated into the compliance program as a continuous business process, similar to third-party due diligence.

The DOJ’s increasing use of data analytics for proactive enforcement has far-reaching implications. Companies must recognize the importance of adopting a data-driven approach to compliance and invest in the necessary resources and technology. By doing so, they can not only meet the DOJ’s expectations but also improve the effectiveness of their compliance programs and mitigate the risk of fraud.

The DOJ’s increasing use of data analytics for proactive enforcement signifies a significant shift in their approach to combating white-collar crime. Companies must embrace this data-driven approach to compliance, continuously monitor high-risk transactions, and invest in the necessary resources and technology. By doing so, they can demonstrate effective compliance programs, uncover hidden financial irregularities, and improve overall efficiency.

For the full podcast episode, click here.

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Principled Podcast

Principled Podcast – S10E15: What can organizations do to strengthen trust in the workplace?

What you’ll learn on this podcast episode

The meaning of work has shifted, and employees across generational divides are demanding a reset. Data from a special edition of Edelman’s 2023 Trust Barometer—the Trust at Work report—notes that trust in “my employer” is higher than that of most institutions out there. But employees are expecting more, and their influence in the workplace is rising. How can companies leverage trust and adapt their own practices to better address employee concerns? On the season 10 finale of the Principled Podcast, host Emily Miner discusses key findings from the 2023 Trust at Work report with David M. Bersoff, the head of research at Edelman Trust Institute. Listen in as the two explore how employers can strengthen trust in the workplace and beyond.

Guest: David M. Bersoff, Ph.D.

DavidBersoffGrayscalePicture1

David M. Bersoff is the Head of Research for the Edelman Trust Institute, Edelman’s think tank dedicated to advancing the study of trust in society. As the Institute’s Chief Trust Scientist, David is responsible for ensuring the quality, integrity, and scientific value of all of Edelman’s trust-oriented research, which includes the annual Trust Barometer, the biggest and longest running global study of institutional trust, as well as yearly topical studies examining issues such as climate change, trust in the healthcare system, trust in the workplace, trust in brands, and racial justice. He also oversees all of the Trust Institute’s external research projects done in partnership with other academic, social policy, and philanthropic institutions. 

Prior to joining Edelman in 2016, David spent 17 years as a consumer insights and marketing strategy consultant at The Futures Company (nee Yankelovich). In his last 5 years with the organization, he served as its Chief Insights Officer and was a member of its global board of directors. In that role, he ran the Global Insights Group and drove the research, data analysis, IP creation and product development strategy for all of their syndicated consumer insights offers. In addition to his background in IP development and insights product management, David has also served as a trusted advisor and marketing/brand strategy consultant to major clients in industries as diverse as financial services, automotive, media, professional organizations, energy, and the military. 

Before entering the consulting world, David spent 12 years engaged in social science research at Yale and the University of Pennsylvania, where he was an assistant professor of social psychology and research methodology and served on its IRB. 

In addition to this work, David’s thought leadership activities include serving on the advisory boards of research projects stewarded by the Global Listening Project, Weave: the Social Fabric Project, and the World Values Survey Association. 

David holds a BA summa cum laude in Philosophy and a Ph.D. in social psychology, both from Yale University. 

Host: Emily Miner

Emily_Miner_Principled_Podcast_S7_E5

Emily Miner is a vice president in LRN’s Ethics & Compliance Advisory practice. She counsels executive leadership teams on how to actively shape and manage their ethical culture through deep quantitative and qualitative understanding and engagement. A skilled facilitator, Emily emphasizes co-creative, bottom-up, and data-driven approaches to foster ethical behavior and inform program strategy. Emily has led engagements with organizations in the healthcare, technology, manufacturing, energy, professional services, and education industries. Emily co-leads LRN’s ongoing flagship research on E&C program effectiveness and is a thought leader in the areas of organizational culture, leadership, and E&C program impact.

Prior to joining LRN, Emily applied her behavioral science expertise in the environmental sustainability sector, working with non-profits and several New England municipalities; facilitated earth science research in academia; and contributed to drafting and advancing international climate policy goals. Emily has a Master of Public Administration in Environmental Science and Policy from Columbia University and graduated summa cum laude from the University of Florida with a degree in Anthropology.

 

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Daily Compliance News

Daily Compliance News: December 19, 2023 – The FTC Scores Big Win 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:

  • Questions about the state of the CA settlement with ActivisionBlizzard. (NYT)
  • Will Clarence Thomas recuse in the Trump case? (Reuters)
  • Nikola founder, was sentenced to 4 years for fraud. (FT)
  • FTC scores a big court win. (NYT)
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Innovation in Compliance

Innovation in Compliance – Mohamed Lazzouni on The Role of Biometrics in Data Management and Compliance

Innovation comes in many areas and compliance professionals need to not only be ready for it but embrace it. My guest in this episode is Mohamed Lazzouni, Chief Technology Officer at AWARE.

Mohamed Lazzouni, a distinguished individual with a robust background in physics and solid-state physics, currently serves as the Chief Technology Officer at Aware. Lazzouni firmly believes in the potential of behavioral biometrics to enhance security and compliance, particularly in the financial services industry. He asserts that biometrics can be used to verify customer identities during online transactions, thereby eliminating the need for physical visits to a branch. Furthermore, he sees the analysis of biometric data such as face recognition, voice prints, and fingerprints to ensure the registered identity of a customer is trustworthy. Lazzouni also highlights the role of biometrics in data management and compliance, ensuring that personally identifiable information is collected, stored, and managed securely and in compliance with relevant laws and regulations. He is particularly excited about the potential of behavioral biometrics, such as unique gestures and interactions with devices, to further enhance security and provide new opportunities for businesses and individuals. Join Tom Fox and Mohamed Lazzouni on this episode of Innovation in Compliance to delve deeper into this fascinating topic.

Key Highlights:

  • Exploring Nature at a Unique Scale
  • Leveraging Unique User Interactions for Security
  • Enhancing Identity Verification with Biometric Technology
  • Biometric Security Solutions for System Integrators
  • Biometric Security Revolution: Face and Voice Recognition

Resources:

Mohamed Lazzouni on LinkedIn

AWARE

 

Tom

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Data Driven Compliance

Data Driven Compliance: Vince Walden on DOJ Remarks on Data-Driven Compliance

Are you struggling to keep up with the ever-changing compliance programs in your business? Look no further than the award-winning Data Driven Compliance podcast, hosted by Tom Fox. This podcast features an in-depth conversation around the uses of data and data analytics in compliance programs. Data-Driven Compliance is back with another exciting episode. Today, I visited with Vince Walden, CEO of KonaAI, on the recent remarks by the DOJ on data-driven analytics and compliance.

Vince Walden, an expert in data-driven compliance and fraud examination, has made significant strides in the industry as the CEO of Kona AI. His perspective on the Department of Justice’s (DOJ) increasing use of data analytics for proactive enforcement is that it marks a significant shift in the DOJ’s approach to enforcement. Walden notes that the DOJ is now actively using data analytics to proactively identify risks and cases, rather than relying solely on self-reporting or anomalies. He believes that data analytics is no longer considered cutting-edge but rather an expected part of a best practices compliance program. His extensive experience in white-collar crime and FCPA cases, as well as his participation in events such as the annual FCPA conference, have shaped this perspective. Join Tom Fox and Vince Walden as they delve deeper into this topic on the next episode of the Data Driven Compliance podcast. 

Resources:

Vince Walden on LinkedIn

KonaAI

Tom Fox 

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Greetings and Felicitations

Podfest Expo 2024 Speaker Preview Series – Brad Miller

In this episode of the PodfestExpo 2024 Speaker Preview Podcasts series, I visit with Brad Miller, host of Cancer and Comedy, and discuss their presentation at PodfestExpo on the four elements of your mental health. Some of the issues we tackle in this podcast are:

  • Bringing joy and levity to cancer patients.
  • How Chris Krimitsos brings out the best in everyone.
  • Why you should attend PodfestExpo 2024.

I’m hoping you’ll be able to join me at PodfestExpo 2024, which Podfest Global is hosting. This year’s event will be the 10th anniversary and will be held January 25–28, 2024, at the Wyndham in Orlando, Florida. The line-up of this year’s event is simply first-rate, with some of the top names in podcasting.

Podfest Expo is a community of people interested in and passionate about sharing their voice and message through powerful audio and video mediums. We’re proud to unite as many people as possible to learn, get inspired, and grow better together.

PodfestExpo is so much more than just a mere conference. While we pride ourselves on featuring the most engaging speakers, exciting topics, and in-depth content, the thing that sets the PodfestExpo event apart from all others is the tight-knit community we’ve been building since 2013. You don’t just attend a Podfest event; you become part of the Podfest family.

Whether you’re new to podcasting or a veteran podcaster looking to innovate and improve your podcast, our easy-to-understand conference topics allow you to customize a daily agenda based on what you’re most interested in learning. No matter your skill level or experience, PodfestExpo 2024 has plenty to offer!

I hope you can join me at the event. For information on the event, click here. As an extra benefit to listeners of this podcast, Podfest Expo is offering a discount on the registration price. Enter the discount code “Listener.”

PodfestExpo 2024 is a production of Podfest Global, which sponsors this podcast series.

Categories
31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Data Analytics: Day 12 – The Master Data Plan

As with all other components of a best practices compliance program, robust policies and procedures in data governance need to be in place to effectively address privacy concerns. This is even more true with the shift from breach data protection to data privacy as a regulatory focus. This shift is gaining momentum, especially in the EU under GDPR, where data privacy is a significant concern for companies doing business globally.

It is important to have a Master Data Plan in place with acts to provide a centralized and consistent view of data. A Master Data Plan also enables organizations to have a holistic understanding of their data, leading to better decision-making and improved business efficiency. This Master Data Plan will help drive good data governance, which plays a vital role in compliance program visibility and effective data management. A Master Data Plan involves establishing policies, procedures, and controls to ensure data quality, accuracy, consistency, and trustworthiness. Data quality is essential for data to be fit for purpose and used efficiently in business operations and analytics.

Three key takeaways:

  1. Companies should implement a Master Data Plan in place to effectively manage data going forward.
  2. A Master Data Plan involves establishing policies, procedures, and controls to ensure data quality, accuracy, consistency, and trustworthiness
  3. By embracing data-driven practices and addressing privacy concerns, businesses can enhance compliance programs, drive efficiency, and achieve better ROI.

For more information on KonaAI click here.