Five steps to avoid a FIFA-like final whistle
June 10th, 2015
- Posted by Sam Hemmant
in Anti-Bribery And Corruption
Financial services scrutiny
HSBC, Barclays and Standard Chartered are
said to be investigating payments worth hundreds of thousands of pounds which
allegedly passed through accounts held by them and may be linked to senior FIFA
officials accused of corruption. One
payment in particular – £326,000 which was allegedly sent from a sports
marketing company's bank in New York to be credited to the account of a luxury
yacht maker held by HSBC in London – is under particular scrutiny.
While none of the banks have been accused
of doing anything wrong, their internal reviews are focused on ensuring that
that they have complied with regulations on money laundering and bribery. The investigation is particularly sensitive
for HSBC which entered into a so-called "deferred prosecution" arrangement with
US federal authorities last year.
The developing scandal at FIFA and
potential unwitting involvement by major financial institutions has once again
brought the issue of international due diligence and compliance to the fore.
As Mark Dunn, LexisNexis Due Diligence
Segment Leader explains: "As the investigators continue to unpick the alleged
offences of those involved in the FIFA scandal, the spotlight again shines on
the importance of effective due diligence and compliance to protect businesses
against bribery and corruption risk."
What can you do to protect yourself?
While it may never be possible to stamp out
international corruption and money laundering completely, there are a number of
steps that any business can take to minimise exposure and to ensure that it
complies with the regulations:
- Your firm should assess what its potential
exposure to money laundering, bribery and corruption is in the market or
geographical area concerned.
- Screen your suppliers and other third
parties. Companies should ensure that
they maintain adequate supplier screening and that this is ongoing because,
according to the Resource Guide to the Foreign Corrupt Practices Act, 90% of
FCPA compliance violations result from third party relationships.
- While the FIFA scandal suggests that
corruption may have taken place involving the body's representatives from what
are traditionally thought of as first world countries, the developing world
clearly still presents a higher risk of bad practice. Basic due diligence should include particular
attention to high risk regions to ensure that proper precautions are taken
- The action by the FBI and the US Justice
Department has shown that international borders are no protection against
compliance investigations. Even where a
business is not based in America, if it enters into a joint venture or
acquisition with a foreign business it can still be at risk of FCPA violations,
even for the past events of the acquired organisation. Enhanced due diligence can help you identify
potential red flags before a merger to help eliminate that risk
- A company must make sure that all staff are
fully aware of the organisation's compliance and due diligence procedures and
that ongoing training and support are provided to ensure that staff are kept
abreast of changes in the regulatory environment.
ps 3 ways you can apply this information
right now to..
- To protect your business and reputation you
need to better understand your customers, employees and vendors. Lexis Diligence brings
together all the intelligence you need in one place to conduct consistent due
diligence and comply with anti-money laundering and anti-bribery regulatory
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