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Coming Conflict with China

Coming Conflict with China: Part 1-From Potential Conflict to Real Danger

In the short span of the 21st Century, the world’s two top powers, the United States and China, have moved inexplicably toward a showdown. This evolved from a commercial competition into something more akin to permanent non-kinetic warfare. What does this mean for US business doing business in and with China? In this special 5-part podcast post series, Tom Fox and Brandon Daniels, CEO of Exiger, a global leading third-party and supply chain management software company, explore issues diverse as a real danger, supply chain, exports, cyber-attacks, and IP theft from the business perspective and give the compliance and business executive their viewpoints on what you can do to not only prepare your company but protect it as well. In Part I, from potential conflict to real danger.

Are your relationships headed toward conflict or real danger? Find out in this first episode of this special 5-part podcast series. In this series, Tom is joined by Brandon Daniels, who is an advocate for free markets and democracy and is passionate about providing transparency to the global corporate ecosystem. As this podcast series was being recorded, Chinese authorities arrested employees of the Mintz Group in Beijing. The Mintz Group is a well-known and well-respected international investigations firm. This is one more step in the increasing opacity of the Chinese market. They consider the economic battle being lost to Chinese companies due to their coercive tactics. How do cheap bids pose national security risks? Explore these topics and more in this episode.

Key Quote- Brandon Daniels

“Don’t just go with the cheap bid. Pay attention to the national security risk that a cheap bid from one of these Chinese companies could mean to your business and think differently about how you establish security in critical products.”

 Key Takeaways

  1. What is the Chinese government doing to increase opacity in the Chinese market, and how is this impacting global free markets?
  2. How is the Chinese government manipulating the economics of the global market, and what implications does this have for businesses?
  3. What strategies and approaches can businesses take to ensure security and diversity in their supply chain?

 Resources

Exiger

Tom Fox

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Categories
Daily Compliance News

March 25, 2023 – The Mintz Employees Arrested in China 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:

  • Legacy of Iraq-corruption, corruption, and more corruption. (AP)
  • Tiktok CEO struggles before Congress. (NYT)
  • Coinbase gets Wells Notice. (Bloomberg)
  • Mintz Group was raided in China, and employees were arrested. (Reuters)
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
Daily Compliance News

February 20, 2023 – The Presidents’ Day 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:

  • China top investment banker disappears. (Bloomberg)
  • Main Justice to take over corruption investigation into Texas AG. (MSNBC)
  • Can the arbitration clause eviscerate CA state law on employment claims? (Reuters)
  • Freeport trader charged with FCPA violations. (WSJ)

Categories
Sunday Book Review

February 5, 2023 – The Coming Conflict with China Edition

In the Sunday Book Review, I consider books that would interest the compliance professional, the business executive or anyone who might be curious. It could be books about business, compliance, history, leadership, current events or anything else that might interest me. In today’s edition of the Sunday Book Review, we consider some of the top ethics books which every compliance professional should read in 2023:

  • Who Got China Wrong? by Bob Davis
  • Where the West and China Find Common Ground by Maria Tatar
  • Chip War: The Fight for the World’s Most Critical Technology by Chris Miller
  • Xi Jinping: The Most Powerful Man in the World by Stefan Aust and Adrian Geiges
  • Revolution and Dictatorship: The Violent Origins of Durable Authoritarianism by Steven Levitsky and Lucan Way
Categories
Daily Compliance News

December 12, 2022 – The Economic Sanctions Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you four 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.

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

  • New Peru President asks cabinet to take an anti-corruption pledge. (AP News)
  • Juul to pay $1.7bn for targeting minors. (NYT)
  • Economic sanctions levied on US-listed companies. (WSJ)
  • Hertz pays $168 MM for false claims. (WaPo)
Categories
Sunday Book Review

December 11, 2022 – The Top Books on Economics Edition

In the Sunday Book Review, I consider four books that interest the compliance professional, the business executive, or anyone curious. It could be books about business, compliance, history, leadership, current events, or anything else that might interest me.

In today’s edition of the Sunday Book Review, we consider four books of the FT’s top books from 2022 on economics:

The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology by Martin Chorzempa

Megathreats: Ten Dangerous Trends that Imperil our Future, and How to Survive Them by Nouriel Roubini

Accidental Conflict: America, China, and the Clash of False Narratives

by Stephen Roach

Economic Diversification in Nigeria: The Politics of Building a Post-Oil Economy

by Zainab Usman

Resources

FT’s Best Books of 2022: Economics

Categories
The Corruption Files

Episode 13: Avon China Bribes

When beauty company Avon Products Inc. was charged in 2014 with violating the Foreign Corrupt Practices Act (FCPA) due to failure to detect and prevent bribery acts happening in China, they settled for ten times more than the cost they paid for in “gifts.”

Today, the FCPA investigation and enforcement action still stand as one of the most interesting cases for companies and compliance professionals to learn much from.

Tune in to this new episode of The Corruption Files — The Avon China Bribes with Tom Fox and Michael DeBernardis.

Key points discussed in the episode:

  1. Tom Fox shares the background facts on such an “insane case,” with the investigation almost as interesting and important as the resolution.  
  2. Michael DeBernardis states that Avon China Bribes the grandfather case for a couple of other similar FCPA cases. 
  3. The internal audit department identified this issue of paying gifts and recommended FCPA training for the team, which did not push through due to the lack of budget.
  4. In-fighting or territoriality is not surprisingly uncommon at big companies, leading to compliance and corruption problems. 
  5. Tom cites how in 2012, the government became so frustrated with Avon that they started issuing grand jury subpoenas for individuals. 
  6. A key part of the corporate process is to have systems that talk to each other. And if you don’t, the costs can be astronomical. 
  7. Avon’s $8 million in bribes led to $500 million in pre-settlement costs, $135 million in settlement costs, and $250 million in post-settlement resolutions.  
  8. Tom reminds companies that if there’s a potentially high reward, it generally means there’s a high risk.
  9. Michael emphasizes that Compliance budgets can be tight, but skipping small training can catch up with you in the long run. 

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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.

Categories
FCPA Compliance Report

David Simon and Mike Walsh on Global Supply Chain Disruption and Compliance, Part 2

In this episode, I visit with Foley & Lardner partners David Simon and Mike Walsh on the disruption to the global supply chain, which I focused on in the podcast series, Never the Same. They have co-authored an article entitled,  Managing Supply Chain Disruption in an Era of Geopolitical Risk on the topic. In this Part 2 of a two-series, we continue our exploration of the current global supply chain and focus on issues relating to China.

Some of the highlights include:

·      Why ever company should prepare for a China confrontation over Taiwan.

·      Is the UFLPA a true game changer for supply chains and compliance?

·      What is the impact of China’s Belt and Road program? It’s debt financing?

·      Why is the global supply chain and indeed the global economy of the past 30 years now dead?

·      What steps compliance functions should take now around the global supply chain of the future.

 Resources

David Simon

Mike Walsh

Managing Supply Chain Disruption in an Era of Geopolitical Risk by Mike Walsh and David Simon

Why Supply Chain Will Never Be the Same After the Russian Invasion by Tom Fox

Categories
Daily Compliance News

November 18, 2022 the Worst Controls Ever Edition

In today’s edition of Daily Compliance News:

  • Russia sanctions evaders are getting more sophisticated. (WSJ)
  • Tax fraud by Trump organization. (Bloomberg)
  • Chinese anti-corruption chief admits to receiving bribes. (South China Morning Post)
  • New FTX CEO says the company had the worst controls he’d ever seen. (NYT)