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Everything Compliance - Shout Outs and Rants

Everything Compliance – Shout Outs and Rants from Episode 95


The gang is back with fan favorites shout outs, and rants. This episode includes:

  1. Karen Woody shouts out to Ukraine’s U.N. Ambassador Sergiy Kyslytsya for his impassioned plea for Russia to stop its invasion of his country this week at the United Nations.
  2. Jonathan Armstrong shouts out to Michael Bond for creating Paddington Bear to give comfort to refugees across the globe and for the voice of Paddington Bear, Ukrainian President Zelensky.
  3. Matt Kelly shouts out Jackson Reffitt, who testified against his father in his father’s Capital Insurrection trial. He also announced a Boston Compliance Group meet-up where donations for Ukraine will be taken and matched by both Radical Compliance and the Compliance Podcast Network.
  4. Jonathan Marks shouts out to Sonny Johnson, an autistic basketballer who made the game-winning shot that helped his team at John Marshall Middle School win the last game of the season against Fremont Academy.
  5. Tom Fox shouts out to the Texas GOP for stopping AG Ken Paxton from renomination in the party’s primary and for forcing him into a run-off with George P. Bush.
Categories
Sunday Book Review

March 6, 2022 the Russia/Ukraine edition


In today’s edition of Sunday Book Review:

  • Bloodlands by Timothy Snyder
  • Red Famine by Anne Applebaum
  • Ukraine’s Nuclear Disarmament by Yuri Kostenkov
  • The Frontlines: Essays on Ukraine’s Past and Present by Serhii Plokhy
Categories
Daily Compliance News

March 5, 2022 the Amazon Pushes FTC Edition


In today’s edition of Daily Compliance News:

  • CFOs pull IPOs. (WSJ)
  • Getting cash into Ukraine becoming more problematic.  (WSJ)
  • Amazon tries to force FTC’s hand. (WSJ)
  • DOJ to ramp up hiring to fight white collar crime. (WSJ)
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EMBARGOED!

EMBARGOED! Episode 45: Russia Invades Ukraine and Triggers the Biggest Week in Economic Sanctions History

After a tumultuous and historic week, Brian and Tim gather themselves to discuss the U.S. (and global) response to Russia’s invasion of Ukraine. They start by diving in to the broad, coordinated economic sanctions aimed at debilitating Russia’s financial sector and Putin’s inner circle, debate how well the new measures will work, and contemplate what could be coming next. They next turn to the significant expansion of export controls implicating Russia and discuss the likely impact. Finally, in the Lightning Round, Brian and Tim bid farewell to DOJ’s China Initiative and read between the lines to decipher DOJ’s ongoing priorities.

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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.
***Stay sanctions free.***

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This Week in FCPA

Episode 293 – the Ukraine Hangs On edition


As Ukraine hangs on from the Russian invasion, Jay is on assignment so fan fav Kristy Grant-Hart joins this week as a co-host with Tom to look at some of the week’s top compliance and ethics stories from the impact of the Ukrainian crisis in the Ukraine Hangs On edition. 
Stories

  1. What Russia invasion means for companies and compliance. Tom with a series in the FCPA Compliance and Ethics Blog. Matt Kelly in Radical Compliance.
  2. Dick Cassin says sanctions may lead to more corruption in the FCPA Blog.
  3. Jaclyn Jaeger looks at supply chain disruption and issues in Compliance Week (sub req’d)
  4. Matthew Murray asks if Putin invaded Ukraine to advance corruption, in GAB.
  5. Chasing oligarchs’ money, from the Washington Post.
  6. The Swiss approach to Ukraine crisis. Mark Pieth in Risk and Compliance Europe.
  7. Mike Volkov focuses on new and evolving sanctions, in Corruption Crime and Compliance.
  8. Economic nationalism and corporate governance. Martin Geller, in Harvard Law School Forum on Corporate Governance.
  9. Illicit finance and High-value art. Sullivan & Cromwell lawyers in Compliance and Enforcement.
  10. The invasion and cybersecurity. Jonathan Armstrong in Cordery Compliance.

Podcasts and More

  1. In March on The Compliance Life, I visit with Audrey Harris, Managing Director at AMI, formerly CCO at BHP. In Part 1, she discusses her academic background and early professional career.
  2. On the FCPA Compliance Report, Tom has a 2-part series with Trade Compliance guru Matt Silverman on the full extent of possible Russia sanctions (Part 1) and the corporate response you need to make (Part 2).
  3. Tom and Loren Steffy look energy issues and fallout from the Russian invasion in Greetings and Felicitations.
  4. Tom and Matt Kelly take a deep dive into the compliance weeds about the Russian invasion on Compliance into the Weeds.
  5. Silvia Surman devotes the entire week to Russian trade sanctions and economic issues in The Compliance Kitchen.
  6. Tom celebrates Texas Independence Day and the anniversary of the Alamo in a podcast with Don Frazier, Executive Director of the Texas Institute at Schreiner University on The Hill Country Podcast.

Tom Fox is the Voice of Compliance and can be reached at tfox@tfoxlaw.com. Kristy Grant-Hart is Compliance Kristy and can be reached at kgranthart@sparkcompliance.com.

Categories
Greetings and Felicitations

Loren Steffy on the Energy Issues from the Russia Invasion

Welcome to the Greetings and Felicitations, a podcast where I explore topics which might not seem to be directly related to compliance but clearly influence our profession. In this episode, I visit with business journalist and long-time energy issue reporter Loren Steffy about what the Russia invasion of Ukraine means for the world energy scene. Highlights include:

·      Russia is the second largest oil exporter after Saudi Arabia.
·      Russia provides 40% of the energy for the EU.
·      60% of Russian GDP comes from energy production and sale.
·      What will be the response of US producers?
·      What will this mean for shale production?
·      Where does LNG fit into all this?
·      Can the US upgrade its energy infrastructure?
·      What about a US energy policy?
Resources
Loren Steffy in Forbes.com
30Point.com

Categories
Compliance Into the Weeds

Compliance Issues from the Russia Invasion of Ukraine


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. This week, Matt and Tom take a somewhat somber view on the Russia invasion of Ukraine. Some of the issues we consider:

  • Discussion of sanctions.
  • What do sanctions mean for US, UK and EU countries?
  • How companies should think about doing business in Russia going forward.
  • What about energy production and consumption?
  • US company employees in Ukraine and Russia.
  • The role of China in a potential resolution.

Resources
Tom in the FCPA Compliance and Ethics Blog
Matt in Radical Compliance

Categories
Blog

War in Ukraine: Part 2 – Helping Employees in Ukraine

Almost all of the world has condemned the Russian invasion of the Ukraine and I will add my small voice to that condemnation. In trying to choose what to write, I did not want to emphasize or better the geopolitical commentary, so I decided to focus on how this invasion and its attendant fallout might impact compliance professionals and programs. At this point Russia has limited its attacks to Ukraine but my fear as more EU, other Western allies and the US respond with arms and technical support to the Ukraine government and army, we might see Russia unleash its cyber warfare specialists on those who are supporting Ukraine with material and other support. This week I am writing about some of the issues a Chief Compliance Officer (CCO) needs to think about now. Today, I consider employees in Ukraine.
Many of the issues related to Ukraine are similar to those we looked at when it came to Russia. Obviously Supply Chains which are centered in or go through Ukraine will be significantly impacted. However, as you move west from Ukraine there may soon be greater disruptions into Poland and other eastern European countries as the war intensifies and continues unabated. While many US, UK and EU companies have employees in Russia, they are not now under attack. What can or should you do for your employees that are domiciled in Ukraine?
 Contact and Other Information
Some of the things I learned in weather related emergencies on the Texas Gulf Coast are applicable to the current situation and some are more unique to a war-torn environment. The first thing you need to do is have a full list of all your employees, together with primary and secondary contact information. According to Remote.com this is because “it is common for means of communication to become unreliable. Your team members in Ukraine may lose access to the internet for a few hours or days at a time. If that happens, your people will need to know how to reach you. Provide a direct phone number so you do not lose contact should a member of your team lose internet access.”
Beyond this basic contact information, you should also confirm all employee information. Accurate records can be extremely important in recovery after conflict or for relocation purposes. Ascertain your organization has “the most up-to-date information for all of your team members  in Ukraine, including addresses, bank account information, legal status, citizenship, and anything else that may be important.” The next step would be to “scan and store significant documents to protect against potential loss or damage. Your HR or people team should handle this duty to preserve any documents sent while maintaining the privacy and confidentiality of your” employees’ sensitive personal information.
Financial Support
Banking services will become untenable at some point. Your organization may want to provide advance funding to Ukrainian employees ahead of normal payroll cycles to assist in recovery or relocation. Even if banks, ATMs or cash points remain open they still have to be physically replenished with hard currency. Of course, internet access will become unreliable during conflict. Your employees may not be able to access their funds, or they may need to receive funds quickly and “delivered directly to accounts other than their usual bank accounts. Please keep in mind that paying for services in deemed unsecured cryptocurrencies is currently prohibited in Ukraine. As always, delivering funds outside traditional bank accounts can carry additional risks, so be careful to ensure the funds actually reach the person you are trying to help.”
There can be other forms of financial support, including giving paid time off until the situation has stabilized, or by paying for relocation costs such as hotel fees and travel expenses. Companies might also look at providing supplies to their employees including the delivery of groceries, medicine and other much needed products directly to employees. Coordinate with your employees about this option and offer to pay for any supplies they might need at this time. Lano notes, “A precondition for any further assistance is that you remain in constant contact with your employees. Several daily check-ins are advisable in exceptional situations in order to be informed first-hand about what is actually happening on site and to be able to initiate immediate actions if necessary.”
Relocation
Many of your Ukrainian employees will choose to stay in their country, but others will want to leave, either during the height of the conflict or in the event of a Russian occupation. There are already rumors of Russian kill lists. Make sure you talk to your employees about this possibility and support them in finding a new temporary home. Providing relocation assistance for your employees and their families may be one of the most critical pieces of support you can offer. This could include such services as “emergency immigration, special work permits, and emergency visas may all be options for team members wishing to leave the country.” Drawing from my experiences during the evacuation of New Orleans after Hurricane Katrina, companies who have offices in different locations might be able to source support within a local team or mobilize colleagues from different offices to connect and provide a temporary shelter.
Connections, Connections, Connections
Do not assume people want to be left alone. According to DistantJob, “The first thing you can do to help your employees affected by the Ukrainian-Russian conflict is asked them how they are doing. Make it clear that the most important thing right now is for them to be safe, so clear their schedule, and let them know they are in no obligation to attend any meetings or meet any deadlines.”
However, some people may prefer to remain in contact as usual. Allow your employees to decide what makes them most comfortable and accommodate those choices to the best of your ability. Along similar lines, obtaining reliable information inside a war zone can be problematic at best. Already many of Ukraine’s government websites were hit by cyberattacks, making it even more difficult for Ukrainians to receive communications through official channels. From outside the country, you may be able to relay information your employees will be unable to discover on their own. Watch for news that may be helpful to your employees, especially if they lose internet access. Share information you come across that may be related to providing food, water, shelter, or transportation in the areas where your employees reside.
But most importantly connect, connect and then connect more.
Next up, a look at Supply Chain issues.

Categories
Blog

War in Ukraine: Part 1 – KYC, Who Is in Your Supply Chain and Third Parties

Almost all of the world has condemned the Russian invasion of the Ukraine and I will add my small voice to that condemnation. In trying to choose what to write, I did not want to emphasize the better the geopolitical commentary, so I decided to focus on how this invasion and its attendant fallout might impact compliance professionals and programs. At this point Russia has limited its attacks to Ukraine but my fear as more EU, other Western allies and the US respond with arms and technical support to the Ukraine government and army, we might see Russia unleash its cyber warfare specialists on those who are supporting Ukraine with material and other support. This week I am going to write about some of the issues a Chief Compliance Officer (CCO) needs to think about now. Today, I consider Russia.
The list of sanctions is growing as the situation on the ground becomes more intense and dynamic, so you need to be in constant contact with your operations, sales and supply chain functions. At this point, you should probably add Belarus to that list as they appear to be the only other country actively supporting Russia at this point. Given the US, EU and UK sanctions that have been levied and likely will be sanctioned over the next few days and weeks, at this point your organization probably needs to prepare for a full ban on sales from your organization into Russia. Russia (and Belarus) appears to be headed to the same list as North Korea and Iran and your business needs to ready.
Know Your Customer
One of the first thing every CCO needs to do right now is determine what goods, products or services flow from, through or to Russia. This means knowing who your customers are and where they are located. If you have not stopped selling to any Russian companies now you probably need to stop tomorrow. But this inquiry does not stop or even start at the Russian border. It means any products which might go into Russia through any of your sales channels. Do you have distributors? What countries are they in? Same inquiry for resellers. Any entity that can get your company’s products into Russia needs to be determined now. Make preparations now to cease all business.
Time for your legal department to start looking at every force majeure clause in every contract. Because of where I live, I have looked at force majeure clauses almost every hurricane season and I cannot remember one that did not include a war clause. I rewrote many such clauses to make such pandemic and other health emergencies covered. But your corporate legal department needs to be ready to invoke them under the war clause.
Who is in Your Supply Chain?
The same level of inquiry you put into KYC right now should go into your Supply Chain. Obviously if you have suppliers in Russia, you need to be prepared to jettison that relationship. However even if you do not formally or legally terminate those relationships, your organization needs to be ready for serious disruptions for any components you may be depending on for your company’s products. But once again it is not simply your direct suppliers. If you have never done a deep dive into at least five levels of your supply chain, NOW is the time do so. If there are base materials or component parts coming to your organization from that part of the world anywhere in your supply chain, you had best appreciate that risk sooner rather than later. The Financial Times (FT) has reported that Russia “is also an important source of metals used in manufacturing such as nickel, titanium, palladium and aluminium. Titanium is needed by aircraft and aero-engine manufacturers such as Boeing, Airbus and Rolls-Royce, while palladium is used in catalytic converters, electrodes and electronics.” Indeed, 14% of the world’s aluminium comes from Russia.
Even if you can still have the parts manufactured, you still must bring them to your manufacturing facilities, either in the US or Europe. Thomas L. Friedman, writing in the New York Times (NYT), said, “if Poland just halts truck and rail traffic from Russia to Germany, “as it should,” it would create immediate havoc for Russia’s economy, because the alternative routes are complicated and need to go through a now very dangerous Ukraine. Anyone up for an anti-Putin trucker strike to prevent Russian goods going to and through Western Europe by way of Poland? Watch that space. Some super-empowered Polish citizens with a few roadblocks, pickups and smartphones could choke Russia’s whole economy in this wired world.” If the fighting continues much longer, we will begin to see major transportation disruptions spreading not only from Russia and Ukraine but also to eastern Europe.
Third Parties 
At this point, I hope that ever CCO knows who their third-party sales agents are and that they are monitored on a regular basis. I also hope this same level of knowledge extends down to other third parties such as distributors, joint venture (JV) partners or other types of business relationships in Russia. Indeed the Washington Post announced BP was pulling out of its JV with Rosneft. But more than simply those direct relationships, you can sell your organization’s products into Russia through resale. When was the last time, you looked at your End User report? If it has been more than a few months, I would suggest that you move such a review to the top of your list early this week.
Every multinational organization needs to be fully engaged on these matters and a host of others. Michael Peregrine, writing in Forbes.com last week, said that corporate boards can perform the dual role of both governance and providing support to senior management. Indeed, they may well be obligated to do so. For every CCO reading this I would suggest you call the head of your compliance committee, tell them what you are doing, see what information they want and ask what resources they might be able to provide to you now.
Tomorrow, I will review some issues when looking at Ukraine.

Categories
Daily Compliance News

February 24, 2022 the Ng Trial Suspended Edition


In today’s edition of Daily Compliance News:

  • Implications of Ukraine for corporate governance. (Forbes)
  • Ng trial put on hold after DOJ fails to turn over documents.  (WSJ)
  • KPMG dumps Phil Mickelson. (Golf Week)
  • New EU due diligence law. (NYT)