Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 6 – Operationalization of your Code of Conduct

How can you work to operationalize your Code of Conduct as articulated in the DOJ 2023 Evaluation of Corporate Compliance Programs (ECCP)? The 2023 ECCP focuses not on whether a company has a paper compliance program but whether a company is actually doing compliance. A company does compliance by moving it into the functional business units as a part of an overall business process. That is what makes a compliance program effective at the business level. There are several different parts of the 2023 ECCP that touch upon your Code of Conduct.
The Code of Conduct design and implementation process enshrine your company’s values. Those are set by senior management and their input and support for any code project, whether initial draft or update, is critical. This gets to the heart of operationalization and demonstrates how a Code of Conduct can work to meet the DOJ requirements. As an early part of your design and drafting process, you should assemble a cross-functional team. This is important for several reasons. First, diversity in your team will help produce a more well-rounded final product. But having such team diversity will also assist in your benchmarking effort, coupled with those who are going to help you out looking at designs and maybe helping forge the design of the code. Finally, you can use a group to help in the drafting, redrafting and editing process. This diversity will help you to answer all of the DOJ questions from the 2019 Guidance in a manner consistent to support operationalization.
All of these requirements point to getting out and making your Code of Conduct a part of the very fabric of your organization. By using some or all of these strategies, you will have a good starting point. But it is more than simply rollout and training. There must be ongoing communications as well.

Three key takeaways:

  1. What has been the role of senior management in the creation or update of your Code of Conduct?
  2. How have you worked with employees outside the compliance function to lay the groundwork for fully operationalizing your Code of Conduct?
  3. How have you measured the effectiveness of your Code of Conduct training?

For more information, check out The Compliance Handbook, 4th edition, here.

Categories
Innovation in Compliance

Innovation in Compliance – Dr. Laura Purdy on Revolutionizing Healthcare: The Power and Potential of Telemedicine

Innovation comes in many areas and compliance professionals need to not only be ready for it but embrace it. One of those areas is telehealth and telemedicine. My guest in this episode is Dr. Laura Purdy, a true evangelist for both telehealth and telemedicine.

Telemedicine in the Army has become crucial in providing healthcare to remote and deployed soldiers. Dr. Laura Purdy, a family medicine physician with a military background, has been at the forefront of this innovation. Telemedicine allows doctors to provide care remotely, improving access to healthcare in rural areas with limited services. However, the insurance industry’s lack of understanding hinders acceptance of telemedicine. Dr. Purdy encourages patients to try telemedicine, especially cash pay services, for more control over their healthcare choices. Scaling up a telehealth company requires careful consideration of being cash pay or accepting insurance. Regulatory challenges in telehealth include physician licensing, state laws, legal standards, and controlled substances. The future of telemedicine involves seamless integration of virtual and in-person care. Dr. Purdy’s company, AfD Health System, aims to provide accessible care and educational content through Instagram and a developing website. Overall, telemedicine has the potential to revolutionize healthcare delivery, but it requires greater acceptance, understanding, and comprehensive regulation.

Key Highlights

·      Telemedicine in the Army

·      Telemedicine: Improving Access to Healthcare

·      Challenges in Telehealth Regulation

·      The Future of Telemedicine

·      AfD Health System

 Resources

Dr. Laura Purdy on LinkedIn

DrLauraPurdy.com

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

Categories
Blog

Geopolitical Risks and Business Opportunities: Part 2 – Latin America

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk Intelligence at Infortal Worldwide. Global Risk Review, a podcast series that Infortal Worldwide sponsors was the reason for this visit. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a Ph.D. in political science and a master’s degree in National Security Studies. Over this five-part blog post series, we will review Dr. Oxnevad’s views in each one of these regions. Part 2 reviews the business opportunities and risks in Latin America.

Dr. Ian Oxnevad is a highly regarded expert in global geopolitical risk, with special knowledge of Latin America. His extensive experience and understanding of the region’s shifting dynamics shape his perspective on Latin America’s geopolitical risks and business opportunities. Oxnevad identifies significant changes and instability in the region, including increased statism, corruption, and authoritarianism, as well as China’s growing influence, particularly in Brazil. He emphasizes the importance of due diligence and geopolitical risk intelligence, often overlooked by CEOs and political figures. He discusses the risks and potential opportunities for US businesses in Mexico, Venezuela, Cuba, Chile, and Ecuador.

Latin America is a region that is experiencing a rise in geopolitical risk and instability. With China increasing its presence in the region and concerns growing over corruption and authoritarianism, it is crucial for companies considering investment in Latin America to prioritize due diligence and geopolitical risk intelligence. Despite these challenges, the region is not on the sidelines of global events and offers potential business opportunities.

One of the popular strategies for US companies is nearshoring in Mexico. However, this approach comes with its own set of risks. Nationalization, political divisions, and crime are some of the factors that companies need to consider when investing in Mexico. It is important to conduct thorough research and analysis to understand the specific risks associated with each location within Latin America.

Dr. Oxnevad emphasized the importance of paying attention to Latin America regarding geopolitical risks and business opportunities. He pointed out that many CEOs and people in the political world view Latin America as being off the sidelines of major events worldwide, but this is far from the truth. Latin America is a dynamic region that requires careful consideration and attention.

Despite its challenges, Cuba can become a financial hub in Latin America. Its strategic location and favorable weather make it an attractive destination for businesses. However, significant reforms, regional ties, and US investment would be necessary to realize this potential. Cuba was historically a financial center in the Americas under Spanish rule. If it were to liberalize and attract investment, it could play a similar role in Latin America as the UAE does in Africa.

Additionally, simply looking at a map of the Caribbean Sea and the Atlantic Ocean reveals that Cuba is the best entry point for the northern Latin American continent from a transportation perspective. Cuba’s potential as a gateway to northeastern Latin America, particularly in shipping and transshipping, makes it an attractive business prospect. Finally, the Obama Administration’s initiative to open Cuba to US commerce, which the Trump Administration scuttled, shows an active consumer base for US goods, products, and services. When President Obama visited Cuba, over 2000 US business executives traveled to meet and assess the business opportunities.

Venezuela, on the other hand, presents a different set of challenges. The Venezuelan regime is hostile towards the US, and China has increased its presence there. This makes a significant opening for US businesses unlikely. Moreover, even if there is an opening, the pervasive corruption problem will make it difficult to do business with Venezuela. The national energy concern, PdVSA, is generally recognized as one of the most corrupt energy-related state-owned enterprises globally. Navigating doing business with PdVSA will be difficult and closely watched by US authorities.

Conversely, despite not being directly connected to the energy industry, Cuba has a better chance of opening up. The existing regime in Cuba relies on Raul Castro for legitimacy, and there is a greater likelihood of liberalization due to political reasons.

When considering business opportunities in Latin America, it is essential to assess the geopolitical risks associated with each country. Chile, for example, is considered safer than Ecuador due to its more pro-business body of law. However, Chile is internally divided, and there are pushes to increase authoritarianism. Ecuador, on the other hand, appears more unstable, with recent electoral violence. Conducting thorough screenings and assessments of each country’s legal framework, corruption levels, labor relations, and criminal risks is crucial for making informed decisions.

In conclusion, Latin America presents both geopolitical risks and business opportunities. Companies must conduct due diligence and gather geopolitical risk intelligence to navigate the challenges and tradeoffs. Latin America should be noticed, as it is a region actively involved in global events. By carefully considering the impact of geopolitical risks and making informed decisions, businesses can tap into the potential that Latin America has to offer.

Please join us tomorrow when we explore Geopolitical Risks and Business Opportunities in Russia and Ukraine.

You can check Dr. Oxnevad in the full five-part Riskology by Infortal podcast series here.

Categories
Data Driven Compliance

The Uses of Data Driven Compliance: Part 2 – Profiles of a Corrupt Payment

Welcome to Data Driven Compliance. In this podcast, we discuss how to use data to improve and enhance the effectiveness of your compliance program, creating greater business efficiency and leading to a higher return on investment for your compliance regime. Join host Tom Fox as he explores how data will drive your compliance program to the next level. This podcast is sponsored by Kona AI.

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. Over these five podcasts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 2, we explore the profiles of corrupt payments.

Vince Walden is an expert in identifying high-risk payments and preventing corporate corruption. His belief in the ability of data analysis and collaboration to find patterns and warning signs shapes his viewpoint on these issues. He shares his experience from a research project where companies collaborated anonymously to analyze the profiles of improper payments, using risk-scoring transactions and applying anti-corruption tests to identify high-risk attributes. Vince emphasizes the importance of transparency and access to data to proactively investigate suspicious activities, serving as a guardrail to prevent potential corruption. Join Tom Fox and Vince Walden as they delve deeper into this topic on this Data Driven Compliance podcast episode.

Key Highlights:

  • Attributes of High-Risk Payments Analysis
  • Uncovering Suspicious Sales Spikes in Poland
  • Detecting Improper Payments with Data Analysis

Resources:

Connect with Vince Walden on LinkedIn

Check out Kona AI

Connect with Tom Fox on LinkedIn

Categories
Riskology

Infortal on Global Risk Outlook: Part 1 – Dr. Ian Oxnevad on Middle East and Africa

“The dollar’s power, like any currency’s power, is tied to its ability to hold value and people’s interests in actually holding it,” says Dr. Ian Oxnevad, Director of Geopolitical Risk Intelligence for Infortal Worldwide and Tom Fox’s guest on this Riskology Special Series. Ian and Tom discuss the current geopolitics of trade within the Middle East, the Abraham Accords, and how these things may affect businesses within the US looking to expand. 

Dr. Ian Oxnevad is the Director of Geopolitical Risk Intelligence for Infortal Worldwide, with a political science and national security studies background. He is also the host of The Riskology Podcast. 

You’ll hear Ian and Tom discuss:

  • The changing geopolitical landscape in the Middle East since 2020, and the impact of the Abraham Accords on opportunities in the high-tech and water technology sectors. 
  • The dominance of the US dollar as a go-to currency within the Middle East. 
  • Ian talks about the implications and advantages of Saudi Arabia and Middle Eastern crude oil being tied to the US dollar.
  • While the US dollar being the benchmark currency for crude is good for the US, it has the potential to create currency crisis risks and monetary instability. 
  • The possible trade sanctions and risks for countries doing business within Saudi Arabia and its environs.
  • Tom and Ian stress the importance of conducting good due diligence and geopolitical risk intelligence in order to combat these risks. Consider entering markets with favorable exchange rates, and holding and transacting in other currencies based on your industry. 

Resources

Infortal Worldwide | Email | Tel: 1.800.736.4999 | Podcast

Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 5 – Training on your Code of Conduct

What about the training on your finalized Code of Conduct? While there have been criticisms of code training, if you consider training as one source of your 360-degrees of compliance communications, the rollout of a new or updated code can be an opportunity. This rollout fits directly into the concept of 360-degrees of compliance communications as rollout is part of both communications and engagement. The delivery of a Code of Conduct is a key element of its effectiveness. By allowing your employees and other stakeholders to engage and interact with the code, through live or interactive training, the effectiveness can be better monitored and measured.
Beginning with the DOJ’s 2017 Evaluation and continuing into the 2023 ECCP, is the DOJ’s emphasis in the effectiveness of training. I think everyone would understand you do need to train but now the government’s talking to us about effective training. Begin with live training that can be held at the corporate headquarters with senior management and executive involvement. Many companies will videotape a message from the CEO to help celebrate the rollout. Then there is the opportunity for localized training that gives employees an opportunity to see, meet, and speak directly with a compliance officer, not an insignificant dynamic in the corporate environment. Such personal training also sends a strong message of commitment to the Code of Conduct. It gives employees the opportunity to interact with the compliance officer by asking questions which are relevant to markets and locations outside the corporate office, which can often provide employees with the opportunity to have confidential in-person discussions.
However, your Code of Conduct training should be an extension of the way you communicate compliance in your organization. If it is divorced from your 360-degrees of compliance communications style, you may well be missing an opportunity to drive better understanding of the code and denigrate the effectiveness of the training. Whatever approach is used, one of the critical factors is the length of time of the training session. Although lawyers and ethics and compliance professionals can (sometimes) sit through a multi-hour Code of Conduct lesson, it is almost impossible to keep the attention of business and operations employees for such a length of time. The presentation and number of PowerPoint slides must be kept to a manageable length before the attendee’s eyes start to glaze over.

 Three key takeaways:

  1. Consider a video message from your CEO to help roll out your Code of Conduct initiation or update.
  2. Tailor your Code of Conduct training to your workforce.
  3. Consider interactive and modular approaches to Code of Conduct training.

For more information, check out The Compliance Handbook, 4th edition, here.

Categories
All Things Investigations

All Things Investigations: Episode 36 – The 3M FCPA Enforcement Action and Opinion Release 23-01 with Mike DeBernardis

In this episode of All Things Investigations, host Tom Fox delves deep into the significant enforcement action by the SEC against 3M in China with guest Mike DeBernardis. The action revolves around the provision of covert trips to Chinese government officials by 3M to secure business deals. These concealed itineraries raised eyebrows due to tell-tale signs like simultaneous scheduling of tourist activities with educational events and an absence of proper translation services.

Mike DeBernardis is a partner in Hughes Hubbard’s Washington office and a member of the firm’s Anti-Corruption and Internal Investigations and White Collar & Regulatory Defense practice groups. He assists clients with internal investigations relating to high-stakes matters including corruption under the Foreign Corrupt Practices Act, procurement fraud, financial and accounting fraud, money laundering, and other ethics issues and violations of company policy. 

 

You’ll hear Tom and Mike discuss:

  • The SEC has recently released two pertinent documents, one of which revolves around the covert operations of 3M China. 3M China had set up a clandestine system to mask their dealings, notably by offering Chinese officials fabricated travel itineraries. These itineraries emphasized tourist activities over the actual educational events.
  • Platforms like WeChat, categorized as ephemeral messaging, are prevalent in China’s business landscape. However, their misuse can project a deficiency in compliance culture. While these platforms are efficient, they can blur the lines of official and casual communication.
  • Compliance professionals are at the frontline of ensuring business legitimacy. They should actively verify the genuineness of business-related activities. Tools such as sign-up sheets and photographs can be instrumental in documenting attendance.
  • The penalty levied on 3M was considerable. The rigorousness of the action was evident as detailed spreadsheets calculated the return on investment of bribes. 3M’s own employees in China assisted in this calculation, simplifying the process for regulators. 
  • An interesting aspect discussed was the opinion release regarding travel costs for foreign officials visiting adopted children’s families. It brings to light the nuances of these expenses and how they can be misconstrued. Companies need to ensure they don’t pay for personal expenses in these situations.
  • The opinion release procedure stands as a beacon for companies seeking clarity, offering companies an avenue to gain insights from the DOJ. Such procedures guide businesses when treading on uncertain compliance grounds. 

 

KEY QUOTES

“I think looking at this from one lens, you could say, here are the things that maybe the compliance professionals could have done to really look at this more diligently with a closer lens.” – Mike DeBernardis

 

“We often advise clients, when they’re approving donations and sponsorships from a compliance perspective, [to get] some sort of documentation to prove that the donation [they] have approved was actually given in the manner [they] thought it was going to be.” – Mike DeBernardis

 

“I think trade companies in particular should be looking at ephemeral messaging policies, what they have in place, and how to manage this issue. This issue is extremely difficult because in certain parts of the world, ephemeral messaging, however you want to define that, is used as the main way to do business, right? So there is a business justification, a legitimate business justification for using it.” – Mike DeBernardis

 

Resources

Hughes Hubbard & Reed website 

Mike DeBernardis on LinkedIn

Categories
Daily Compliance News

Daily Compliance News: September 11, 2023 – The 11,196 Years Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance brings to you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in 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.

  • Turkish fraud sentenced to 11,196 years in prison. (BBC)
  • FCA on the lookout for shirkers. (WSJ)
  • Argentina found liable for renationalization. (FT)
  • Kroger to pay $1.2bn to settle opioid claims. (NYT)
Categories
Data Driven Compliance

The Uses of Data Driven Compliance: Part 1 – What’s the Hype?

Welcome to Data Driven Compliance. In this podcast, we discuss how to use data to improve and enhance the effectiveness of your compliance program, creating greater business efficiency, all leading to more return on investment for your compliance regime. Join host Tom Fox as he explores how data will drive your compliance program to the next level. This podcast is sponsored by KonaAI.

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. Over these five podcasts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we ask, ‘What’s all the hype around generative AI and ChatGPT in compliance’?

Vince Walden is a seasoned professional in the field of generative AI and chatbots, with a particular focus on compliance monitoring. He firmly believes that these technologies have the potential to improve the efficiency and effectiveness of compliance monitoring significantly. Drawing from her extensive experience in technology-assisted review and his current role at KonaAI, Walden sees practical applications for generative AI in navigating compliance monitoring functions and interacting with data dashboards, eliminating manual intervention. However, he also acknowledges the potential pitfalls of over-reliance on generative AI, such as the risk of false statements and the need for fact-checking. Despite these challenges, Walden remains optimistic about the future of generative AI and chatbots in transforming the compliance industry and explains why you should.

Key Highlights:

  • The Evolution of Compliance Monitoring with Generative AI
  • Efficient Compliance Monitoring with Generative AI
  • The Importance of Fact-Checking ChatGPT
  • Customizable Compliance Monitoring Tool for Companies

Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

Categories
Blog

Revolutionizing Compliance Monitoring with Generative AI and Chat GPT

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. KonaAI is the sponsor of those podcasts. This blog post series will flesh out the podcast show notes. Over the next five blog posts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we will consider using generative AI and ChatGPT for compliance.

My special guest is Vince Walden, a trailblazer spearheading transformative advancements in the compliance industry through the innovative use of data and data analytics. Vince’s grounding in generative AI and Chat GPT has enabled him to push the boundaries of traditional compliance monitoring. His knack for simplifying complex concepts has won him acclaim at numerous conferences, where he frequently shares his expertise. Vince’s novel strategies are revolutionary and rapidly becoming the new standard in the field.

Together with Walden, we will explore how compliance professionals can enhance their monitoring efficiency through generative AI and Chat GPT. Having worked extensively in the compliance and data arenas, Walden understands the challenges compliance professionals face in navigating the complex regulatory landscape. He shares his expertise and highlights practical use cases of Chat GPT in compliance monitoring, demonstrating how it can streamline the decision-making process. We will provide actionable strategies for improving compliance monitoring and addressing compliance professionals’ pain points.

You have probably heard of Generative AI. What is the hype about it? Generative AI does not just analyze data—it creates or “generates” responses or outputs based on the given data. Something like a brilliant virtual assistant! Walden discussed some of the uses. He mentioned how these AI chatbots can interact directly with a compliance dashboard. This means it is more than simply about reading data—it is about interpreting it and helping make navigating tons of data more accessible. It provides recommendations, insights, and options based on what it’s looking at. This could eliminate the need to click around on your dashboard.

AI is pretty good with data. But what about qualitative information? You might be wondering if you can leave everything entirely to AI. Walden adds a bit of a reality check here by reminding us of the importance of human intervention in checking the AI’s output. There is a downside to relying exclusively on AI’s output. A compliance professional must take results at face value. There is a need for validation and fact-checking to ensure we’re not accidentally spreading misinformation or making decisions based on false statements. It’s like that saying, “Trust but verify.”

One of the key challenges associated with generative AI and chatbots in compliance monitoring is striking the right balance between automation and human oversight. While chatbots can assist in navigating and analyzing data, human judgment and expertise are still crucial in interpreting the results and making informed decisions. Compliance professionals must ensure that the rules and algorithms used by the chatbots are accurate and aligned with regulatory requirements.

Another consideration is data privacy and security. Using generative AI and chatbots within a secure platform that protects sensitive information is essential. Compliance professionals should avoid sending data to third-party providers and ensure privacy regulations are followed.

Despite these challenges, generative AI and chatbots in compliance monitoring are promising. By leveraging these technologies, compliance teams can improve efficiency, reduce costs, and enhance the overall effectiveness of their monitoring processes. The ability to customize review strategies based on different risk thresholds and areas of concern further enhances the value of these tools.

The bottom line is that generative AI and chatbots are set to revolutionize compliance monitoring by providing professionals with more efficient and interactive ways to navigate data and identify potential compliance issues. While there are tradeoffs and challenges to consider, the benefits of these technologies in terms of efficiency and cost-effectiveness are significant. Compliance professionals must exercise caution, fact-check the output of generative AI, and maintain human oversight to ensure accuracy and compliance with regulations. As compliance monitoring continues to evolve, the integration of generative AI and chatbots will undoubtedly play a crucial role in shaping its future.

The steps outlined in the article – leveraging generative AI and Chat GPT for compliance monitoring – are pivotal in helping compliance professionals achieve improved monitoring efficiency. By using generative AI to analyze large volumes of data in real time, compliance professionals can detect anomalies and potential violations more efficiently than ever. Additionally, the automation of compliance checks through Chat GPT significantly reduces the burden of manual reviews and frees up valuable time for proactive monitoring activities. These technological advancements enhance monitoring accuracy and streamline the decision-making process, allowing compliance professionals to make informed and timely decisions. By adopting these innovative tools, compliance professionals can achieve improved compliance monitoring results and ensure organizational adherence to regulations.

 Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn