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31 Days to More Effective Compliance Programs

Blockchain will transform compliance


One of the most significant innovations in compliance will come through the incorporation of blockchain into compliance. I see great value propositions for the compliance function. There are two specific areas where I see blockchain directly impacting the compliance profession. The first is with third-parties. The second area where blockchain provides a potential game changer is contracts, specifically around compliance terms and conditions.
This final point is operationalizing compliance. It will be interesting to see when the DOJ or SEC will begin to comment on blockchain as a part of a best practices compliance program.
Three key takeaways:

  1. Blockchain has great potential for the compliance profession.
  2. Blockchain can facilitate the third-party due diligence and update requirements.
  3. Blockchain can provide a clear trigger for compliance terms and conditions.
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Compliance Into the Weeds

Episode 162-Flattening the COVID-19 Curve


Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. As with many of you, we are overwhelmed with COVID-19 information. Matt and I want to bring some clarity, if not sanity to the conversation. To that end, in this episode we take a deep dive into the need to integrate public health measures into our private enterprise operations, now and for the foreseeable future.
Some of the highlights include:

  • What is some of the positive news coming out of China?
  • How did China’s lockdown help slow the virus?
  • Why do we need to use the time to integrate public health measures into private sector operations?
  • What are some of these public health measures?
  • Why are isolation and quarantine key?
  • If we get it under control, how do we prevent another outbreak?
  • What are some practical starting points for businesses to think through at this time?
  • What should businesses be thinking about 30, 60, 90 days out?

Resources
Matt Kelly blog post, The Downslope Risks of COVID-19

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Daily Compliance News

March 18, 2020-the Be Farewell to the Golden Boy edition


In today’s edition of Daily Compliance News:

  • Apple fined $1bn plus in Europe. (WSJ)
  • FinCen urges caution out there. (CadwaladerCabinet)
  • Worried about coronavirus? How about asbestos? (WSJ)
  • The golden boy announces he’s leaving. (Slate)
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EMBARGOED!

EMBARGOED! Episode 3: Reading the Sanctions Tea Leaves

In this episode, hosts Brian Fleming and Tim O’Toole summon all of their prognostication powers to take a closer look at the Halkbank case, the future of U.S. sanctions against Iran, Venezuela, and North Korea, and the latest OFAC enforcement action. Plus: The Lightning Round features more Huawei (of course) and deep thoughts on the meaning of rejection (at least as defined, or not, by OFAC).

Like what you hear? Please subscribe! * Apple Podcasts * Spotify *  Amazon Music  * Google Podcasts * Stitcher
Questions? Contact us at podcasts@milchev.com.
EMBARGOED! is not intended and cannot be relied on as legal advice; the content only reflects the thoughts and opinions of its hosts.
EMBARGOED! is intelligent talk about sanctions, export controls, and all things international trade for trade nerds and normal human beings alike, hosted by Miller & Chevalier Members Brian Fleming and Tim O’Toole. Each episode will feature deep thoughts and hot takes about the latest headline-grabbing developments in this area of the law, as well as some below-the-radar items to keep an eye on. Subscribe for new bi-weekly episodes so you don’t miss out!
Timestamps:
0:10 Introduction
The Rundown:
1:40 Exxon Mobil v. OFAC
16:53 Airbus Resolution of AECA/ITAR Charges
31:20 Park Strategies OFAC Settlement
36:05 Allianz/Chubb OFAC Settlement
40:42 Eagle Shipping/Burma OFAC Settlement
45:28 Lightning Round!:
45:49 Charges for DPRK Crypto Conference (U.S. v. Virgil Griffith)
49:02 Melia Hotels International/Gabriel Escarrer – U.S. Travel Ban
51:57 Extradition of Huawei CFO, Meng Wanzhou
56:05 Final Thoughts
***Stay sanctions free.***

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31 Days to More Effective Compliance Programs

Superforecasting


Imagine that as a CCO, you could create a team which might well dramatically improve your company’s compliance and risk forecasting ability, but to do so you would be required to expose just how unreliable the professional corporate forecasters have been. Could you do so and, more importantly, would you do so? Most generally this is the predictive capability that organizations have used. However, the new “superforecasting” movement, led by Philip E. Tetlock and others, has been gaining strength to help improve this capability.
The concepts around superforecasting came of age after the intelligence failures leading up to the Iraq War. This led to the founding of the Good Judgment Project, which had as a key component a multi-year predictive tournament, which was a series of gaming exercises pitting amateurs against professional intelligence analysts. The results of the Good Judgment Project. Today, I explain its applicability to compliance.
Three key takeaways:

  1. Imagine you could create a team which might well dramatically improve your company’s compliance and risk forecasting ability.
  2. It is essential to track the prediction outcomes and provide timely feedback to improve forecasting going forward.
  3. Like any innovation, there must be a commitment from management on moving forward.
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Innovation in Compliance

Customizing Proactive Compliance Monitoring with Jordan Domash


Jordan Domash, General Manager at Relativity, is this week’s guest on the Innovation In Compliance show. He chats with Tom Fox about his company’s Relativity Trace solution, and how to use it in your compliance program. 

A Proactive Approach
Jordan describes Relativity Trace as “…a communication, surveillance, and monitoring tool built on top of the Relativity platform for compliance purposes.” Tom asks him how it can be used in a proactive approach to compliance. He responds that when potential issues need to be investigated, Relativity Trace can sift through millions of files using machine learning, search, and human review to detect risk proactively. He points out that their out of the box policies can detect issues such as bribery, corruption, and price-fixing. In addition, companies can configure their own rules based on the compliance risks that are relevant to their business. When there is a potential compliance violation, the system will proactively generate alerts. 
Relativity One
Tom asks Jordan to talk about another discovery solution Relativity offers, namely Relativity One. Jordan responds that Relativity One is the SAAS version of Relativity: it’s an e-discovery tool that can help you search and review content as part of an investigation, and then create reports. Each activity that happens in Relativity leaves a permanent audit trail, which ensures that the review process is defensible. 
Document Security
After you self-disclose, the first thing the government asks is if your documents are secure, Tom comments. He asks Jordan how their solution handles security. Jordan describes the tools in Relativity Trace that ensure data security, including the legal hold tool. He reiterates that every action in Relativity is audited. “It’s all exportable. It’s all filterable. It’s all searchable. So it’s very possible to take a look at your audit trail and find the relevant behavior or the whole history of the matter, the investigation or the combined process, and share that with regulators.”  
Tom asks how the solution deals with false positives, in answer to which Jordan outlines various measures built into Relativity that handle this problem. “It’s not just the Machine Learning that can help you reduce false positives right away, but it’s a full collection of tools that Relativity Trace gives you to go through your process quickly… and identify risks in your business,” Jordan comments.
Resources
Relativity Trace

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Daily Compliance News

March 17, 2020-the St. Patty’s Day edition


In today’s edition of Daily Compliance News:

  • US seeking to build criminal case against Boeing pilot. (WSJ)
  • AG proposes changes to CCPA. (CadwaladerCabinet)
  • Saudi detains nearly 300 in new anti-corruption push. (Reuters)
  • Price gouging during coronavirus. (NYT)
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Daily Compliance News

March 16, 2020-the More Problems for Airbus edition


In today’s edition of Daily Compliance News:

  • Ten most innovative brands of 2020. (Fast Company)
  • 1700 Google workers NOT working on White House site. (NYT)
  • Current Airbus CEO ran dodgy business unit. (WSJ)
  • Employee data and coronavirus. (WSJ)
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31 Days to More Effective Compliance Programs

The Digital Twin and P&L of One


How can you use the tools of Artificial Intelligence (AI) and data analytics in a best practices compliance program. Vincent M. Walden, a partner at Alvarez and Marsal (A&M), wrote an article entitled “Profit & Loss-of-One” (P&L-of-One) where he detailed how he and his then colleagues at Ernest & Young (EY) worked in conjunction with the General Electric (GE) compliance function to “improve compliance by using forensic data analytics to provide behavioral insights to their compliance program.” They did this through the innovative use of “digital twins” which Walden described as “digital replicas of physical assets that organizations can use for multiple purposes such as the maintenance of power generation equipment, jet engines and heavy machinery.
The innovation demonstrated through the P&L-of-One shows how the digital transformation of compliance through true operationalization will not only burn compliance into the fabric of an organization but illustrates how more robust compliance can make a company run more efficiently and, at the end of the day, more profitably. Walden concludes by stating, “The compliance vision of the future seeks to further move compliance towards a more proactive, advocacy role, which helps organizations by providing needed communications, trainings and responses in an automated, intriguing and relevant fashion. This is the compliance vision of the future and what the authors call the P&L-of-One.”
Three Key Takeaways:

  1. The inspiration of this innovation in compliance came from manufacturing.
  2. Test through a pilot program.
  3. Making your messaging automated, intriguing and relevant.

 

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31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for Business Ventures – Post Acquisition Integration

Your company has just made its largest acquisition ever and your CEO says that he wants you to have a compliance post-acquisition integration plan on his desk in one week. Where do you begin? Of course, you think about the 2020 FCPA Resource Guide, 2nd edition but you also remember that the established time frames in the enforcement actions involving Johnson & Johnson (J&J), Pfizer Inc. and DS&S and the Halliburton Opinion Release.

While there are time frames listed in these DPAs, they are a guide of timeframes, not a ‘how to’ guide and many compliance professionals struggle with how to perform these post-acquisition compliance integrations. The 2020 Update to the Evaluation of Corporate Compliance Programs asked the following questions, What has been the company’s process for tracking and remediating misconduct or misconduct risks identified during the due diligence process? What has been the company’s process for implementing compliance policies and procedures, and conducting post- acquisition audits, at newly acquired entities?
Whatever compendium of steps you utilize for post-acquisition integration, they should be taken as soon as practicable.
Three key takeaways: 

  1. Planning is critical in the post-acquisition phase.
  2. Build upon what you learned in pre-acquisition due diligence.
  3. You need to be ready to hit the ground running when a transaction closes.