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Daily Compliance News

Daily Compliance News: June 24, 2024 – The LinkedIn Lacks Humor 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.

In today’s edition of Daily Compliance News:

  • Does LinkedIn lack (or even need) humor? (FT)
  • Kaspersky leaders were sanctioned.  (WSJ)
  • The UK’s richest family was found guilty of worker abuse. (BBC)
  • Venezuela is set to join the FAFT Grey List. (Bloomberg)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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10 For 10

10 For 10: Top Compliance Stories For The Week Ending May 25, 2024

Welcome to 10 For 10, the podcast that brings you the week’s top 10 compliance stories in one podcast each week.

Tom Fox, the Voice of Compliance, brings to you, the compliance professional, the compliance stories you need to be aware of to end your busy week.

Sit back, and in 10 minutes, hear about the stories every compliance professional should be aware of from the prior week.

Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for compliance professionals, all curated by the Voice of Compliance, Tom Fox.

Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  • Can shareholders criticize companies (without being sued)? (WSJ)
  • Brazil Supreme Court throws out Car Wash convictions.(FT)
  • Prosecutorial misconduct eviscerates Fat Leonard convictions.(WaPo)
  • First declination in the export control case. (WSJ)
  • FIFA rolls back ABC reforms.(NYT)
  • Investment advisors must vet customers.(WSJ)
  • Meta faces EU probe over child abuse protections.(WSJ)
  • ABC crusader picked as Vietnam’s next president. (Bloomberg)
  • Prosecutorial misconduct eviscerates Fat Leonard convictions.(WaPo)
  • Fewer meetings, more memos.(FT)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

You can check out the Daily Compliance News for four curated compliance and ethics related stories each day here.

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2 Gurus Talk Compliance

2 Gurus Talk Compliance: Kristy Gets a Diploma

What happens when two top compliance commentators get together? They talk about compliance, of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode!

In this episode, we look at reports suggesting China is strategically relocating forced labor from the Uyghur region to different parts of the country in an attempt to bypass US laws prohibiting goods sourced from areas associated with forced labor.

This could trigger wider limitations on goods originating from China, stressing the necessity for intensive audits and transparency in business operations. This issue has sparked bipartisan concern, hinting at potential upcoming legal actions.

Tom stresses the need for companies to react effectively to reduce risks, possibly through on-the-ground audits and increased accountability in business operations in China. Kristy underscores the need for thorough audits and proactive measures in response to the risks associated with forced labor in China. She raises the possibility of legal consequences for companies found to be misleading about their involvement with forced labor. Both perspectives serve to underline the gravity and complexity of this issue.

 Highlights Include:

  • Can shareholders criticize companies (without being sued)? (WSJ)
  • The Brazilian Supreme Court throws out Car Wash convictions.  (FT)
  • Prosecutorial misconduct eviscerates Fat Leonard convictions.   (WaPo)
  • First declination in the export control case. (WSJ)
  • ABC crusader picked as Vietnam’s next president. (Bloomberg)
  • BMW and Jaguar used banned China parts – US probe – BBC
  • Supreme Court Holds CFPB’s Funding Structure Constitutional – Gibson Dunn –
  • Binance Gets Two Compliance Monitors in Settlements With U.S. Authorities – WSJ
  • How Companies Dodge Tariffs – New York Times –
  • Moment motorist jumps into Florida lake to evade police during 90 mph chase after taking test drive too far – New York Post

Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Tom

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All Things Investigations

All Things Investigations: Jan Dunin-Wasowicz and Jeff Nielsen on Export Control and Economic Sanctions: Current Issues and Practice

Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation.

In this podcast, Tom Fox is joined by Jan Dunin-Wasowicz and Jeff Nielson, International Sanctions & Export Controls Lawyers at Rambol, for a deep dive into current issues in export control and economic sanctions.

Jeff Nielsen, an American lawyer with expertise in US and European Union sanctions, currently works at a prominent Danish engineering firm, having transitioned from practicing law in the US to navigating the complexities of international sanctions. Jan​​​​ Dunin‑Wasowicz, a partner at Hughes Hubbard & Reed, is a leading figure in trade sanctions, operating globally out of the Paris office.

Nielsen’s perspective on trade sanctions is shaped by his direct experience with US and European Union regulations, viewing the field as dynamic, challenging, and necessitating an understanding of both legal frameworks and international relations. Similarly, Dunin-Wasowicz emphasizes the industry’s complexity, dynamism, and the importance of staying informed about global affairs to anticipate risks. His work underscores the increasing role of the private sector in dealing with sanctions, highlighting the need for a proactive and adaptable approach to risk assessment in this evolving field.

Key Highlights:

  • Private Sector Role in Evolving Trade Sanctions
  • Dynamic Compliance Strategies in Trade Regulations
  • Sanctions Enforcement Disparity: EU vs US
  • Global Landscape Risk Assessment in Trade Compliance

 Resources:

Hughes Hubbard & Reed website

Jeff Nielsen on LinkedIn

HHR client alert on The Dawn of a New Era for EU Sanctions Enforcement? EU Adopts Directive on the Definition of Criminal Offences and Penalties for the Violation of EU Sanctions

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Daily Compliance News

Daily Compliance News: April 1, 2024 – The Ericsson Released 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 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.

In today’s edition of Daily Compliance News:

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Blog

Boards of Directors in the Era of Sanctions Enforcement

In a recent episode of the podcast ‘All Things Investigations, the discussion centered around directors’ critical role in ensuring legal compliance, particularly in sanctions and export controls. I was joined in this exploration by Mike Huneke, partner at HughesHubbardReed, and Brent Carlson, Director at BRG. Our discussion was based on their blog post on directors’ duty of oversight, which can be found here:  Boards of Directors Lovin’ It after McDonald’s? A Fresh Look at Directors’ Duty of Oversight in the New Era of Sanctions & Export Control Corporate Enforcement.

Our discussion highlighted McDonald’s case from the Delaware Court of Chancery, where the company officers faced lawsuits for neglecting their duties, emphasizing the importance of a dynamic approach from boards and compliance officers to evaluate and enhance compliance programs in response to the evolving geopolitical landscape and increased regulatory enforcement.

While many compliance professionals reviewed McDonald’s for the new duty of oversight created for corporate officers, including Chief Compliance Officers, Huneke and Carlson focused on the duties owed by Directors. For companies engaged in international trade, these actions engage directors’ fiduciary duties. Looking to bellwether Delaware corporate law, Delaware’s Chancery Court recently reiterated in the McDonald’s shareholder litigation that directors’ Caremark duty of oversight is a function of their duty of loyalty.

According to Huneke and Carlson’s article, this case “reinforced the limits of the protections directors would otherwise have if it were instead a function of the duty of care—under both the business judgment rule and “exculpation,” which is the option corporations have to excuse in their articles of incorporation directors’ liability for breaches of their duty of care (but not of loyalty).” Directors’ duty of oversight further requires ensuring that they receive information regarding any “central compliance risks,” not just “mission critical” risks, and that there is an appropriate response to red flags.”

The decision in McDonald’s case underscored the significance of information systems and controls for compliance. It stressed the need for companies to adopt a broader, qualitative view in monitoring export control compliance, with the Department of Justice’s heightened involvement signaling a shift towards a more proactive approach. Key aspects such as oversight, duty of care, and the business judgment rule were highlighted as essential components of board responsibilities and liability.

Board directors were urged to engage with compliance issues actively, ask critical questions, and conduct thorough investigations to fulfill their fiduciary duties. It was emphasized that boards should exercise caution when relying on management reports, proactively address risks, and take necessary actions to prevent potential legal and reputational damage.

From the Board’s perspective, we emphasized the importance of being cautiously skeptical of management’s information, seeking external advice, and taking preventive measures to avoid compliance issues. We also discussed the significance of the duty of oversight, which stems from the duty of loyalty and requires directors to ensure the presence of information systems and controls for informed decision-making and an effective response to red flags.

There is a clear need for board directors, corporate officers, and compliance professionals to stay abreast of the changing landscape of sanctions and export controls. With the Department of Justice’s increased focus on enforcement in this area, organizations must prioritize compliance efforts, seek external guidance, and take proactive steps to mitigate risks and ensure legal adherence.

Huneke and Carlson noted that the court ultimately dismissed plaintiffs’ claims against the directors because, after learning of the red flags, the directors:

  • Obtained detailed oral and written reports from management throughout several meetings dedicated to the red flag identified;
  • Made enhancements to the compliance program, including training and communication;
  • Retained external advisors;
  • Ensured that affiliates (here, franchisees) were included in the enhancements made;
  • Assessed and improved corporate culture and
  • Management involved in the conduct was eventually terminated.

These serve as a road map for the sanctions and export control boards.

Huneke and Carlson concluded their article with the following suggestions:

1) Understand how the world is changing and how those changes impact your business 

Geopolitical risks impact companies in different ways. Analyze potential impact scenarios to arrive at effective oversight approaches. Seek input from a variety of experts. Challenge commonly held assumptions, especially concerning the sufficiency of traditional screening.

2) Continuously ensure that the compliance program identifies and addresses evolving risks

Effective compliance programs evolve as risks change. Make sure management considers the changed enforcement environment when assessing risk. Do not just ask questions—ensure you receive good answers. Avoid solutions that are too clever by half, which can ultimately expose the company to greater risks.

3) Don’t sit on any red flags, and don’t let the management team sit on them either

All kinds of red flags can indeed come out of the blue. Our prior posts provide suggestions for responding to potential evasion effectively and efficiently. Politics (global and domestic) drive regulatory enforcement, and 2024 will be no exception. Now is the time to get ahead of what’s coming. An ounce of prevention is worth a pound of cure.

We concluded the podcast by noting that directors’ duties in sanctions and export controls are paramount in today’s regulatory environment. The pressure will only increase. Boards must be vigilant, proactive, and thorough in their oversight of compliance programs to uphold their fiduciary responsibilities and safeguard their organizations from potential legal and reputational harm. By staying informed, engaging with compliance issues, and taking decisive actions, directors can navigate the complexities of sanctions and export controls effectively.

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10 For 10

10 For 10: Top Compliance Stories For The Week Ending January 20, 2024

Welcome to 10 For 10, the podcast that brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance, brings to you, the compliance professional, the compliance stories you need to be aware of to end your busy week. Sit back, and in 10 minutes, hear about the stories every compliance professional should be aware of from the prior week. Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  1. The Singapore Transportation Minister resigns due to corruption allegations. (CNN)
  2. China’s war on corruption becomes a policy.  (Reuters)
  3. Higher sanctions and penalties are coming. (WSJ)
  4. JPMorgan will pay $18 million for whistleblower protection violations. (WSJ)
  5. Anti-corruption advocate sworn in as Guatemalan President.  (Bloomberg)
  6. Crypto firm Genesis Trading was fined $8 million for compliance failures. (WSJ)
  7. Is the Chinese military as corrupt as the Russian army?  (Business Insider)
  8. Ackman threatens a law suit against Business Insider.  (FT)
  9. The Russian war reigned over Ukrainian oligarchs.  (NYT)
  10. A former A&F CEO faces a criminal investigation.  (BBC)

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

You can check out the Daily Compliance News for four curated compliance and ethics-related stories each day here.

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Compliance Week Conference Podcast

Matt Silverman on Considerations When Operating in an Evolving Geopolitical Environment

In this episode of the Compliance Week 2023 Speaker Preview Podcasts series, Matt Silverman discusses some of his panel at Compliance Week 2023, “Considerations When Operating in an Evolving Geopolitical Environment.”

Some of the issues he will discuss in his presentation are:

  • How cross-functional professionals are structuring their risk assessment programs, benchmark best practices, and walk away with ideas to enhance their program;
  • Cohesive approaches to concurrent risk assessments; and
  • A discussion on the insourcing vs. outsourcing external assessments and weighing the pros and cons of each.

I hope you can join me at Compliance Week 2023. This year’s event will be May 15-17 at the JW Marriott in Washington, DC. The line-up of this year’s event is simply first-rate, with some of the top ethics and compliance practitioners around.

Gain insights and make connections at the industry’s premier cross-industry national compliance event offering knowledge-packed, accredited sessions and take-home advice from the most influential leaders in the compliance community. Back for its 18th year, compliance, ethics, legal, and audit professionals will gather safely face-to-face to benchmark best practices and gain the latest tactics and strategies to enhance their compliance programs. And many others to:

  • Network with your peers, including C-suite executives, legal professionals, HR leaders, and ethics and compliance visionaries.
  • Hear from 75+ respected cross-industry practitioners who are CEOs, CCOs, regulators, federal officials, and practitioners to help inform and shape the strategic direction of your enterprise risk management program.
  • Hear directly from the two SEC Commissioners, gain insights into the agency’s enforcement areas, and walk away with guidance on remaining compliant within emerging areas such as ESG disclosure, third-party risk management, cybersecurity, cryptocurrency, and more.
  • Bring actionable takeaways from your program from various session types, including ESG, Human Trafficking, Board obligations, and many others, for you to listen, learn and share.
  • Compliance Week aims to arm you with information, strategy, and tactics to transform your organization and career by connecting ethics to business performance through process augmentation and data visualization.

I hope you can join me at the event. For information on the event, click here. Listeners of this podcast will receive a discount of $200 by using code TF200 on the link here.

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Coming Conflict with China

Coming Conflict with China: Part 3 – Exports and Rebalancing the Global Economy

In the short span of the 21st Century, the world’s 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 series, Tom Fox and Brandon Daniels, CEO of Exiger, a leading global 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 III, we consider issues related to US exports to China and markets for US products if the China market is closed off to US companies.

The US-China conflict is intensifying, and as a result, businesses that export to China are feeling the strain. US companies exported nearly $149 billion worth of goods to China, but China still exports over $400 billion to the US. Do these trade deficits still matter? What happens when your biggest customer is no longer available? How do you go about finding new markets and reshoring customers? Join us as we explore this and other export issues in Part 3 of this special five-part series.

Key Highlights:

1. The importance of balancing the US-China economic relationship in light of the current crisis.
2. How does a business consider customer location an existential risk?
3. The potential for global economic rebalancing through collaboration between democracies.

Notable Quote

“We have to figure out how to make this a global market and ensure that this doesn’t just become some sort of nationalistic retrenchment.”
Resources

Exiger

Tom Fox

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Other episodes in this Series:
Episode 1-From Potential Conflict to Real Danger

Episode 2-Supply Chain Issues

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Daily Compliance News

March 2, 2023 – The All WSJ 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:

  • Ericsson CCO leaves. (WSJ)
  • SW Airlines tries to save 4 minutes. (WSJ)
  • Huawei export licenses may be revoked. (WSJ)
  • More Glencore restitution was ordered. (WSJ)