Ethics & Anticorruption Compliance. Presentation to NBCC - July 15, 2015 Leticia Andrade

Transcription

1 Ethics & Anticorruption Compliance Presentation to NBCC - July 15, 2015 Leticia Andrade

2 What would YOU do?

3 What is a high risk country?

4 Brazilian Company Clean Act UNDERSTAND THE REGULATION Law nº /2013 entered into force in January, 2014; regulated by Federal Decree nº 8.420/2015 Agent Focus on Legal Entities Common Traits with FCPA and UK Bribery Act Extraterritorial effect Forreign public administration Legal Entities controlled by a foreign country Liability Strict Joint and several as to fines and damages Affiliates Consortium Partners

5 Brazilian Company Clean Act UNDERSTAND THE REGULATION UNDERSTAND THE REGULATION ADMINISTRATIVE LIABILITY Main 05 points (CGU Normative Instructions and Ordinances) FINES HOW TO CALCULATE LENIENCY AGREEMENT NACIONAL REGISTER COMPLIANCE PROGRAM Infograph CGU webiste

6 Brazilian Company Clean Act 1 ADMINISTRATIVE LIABILITY (Ordinance n 910/2015) DEADLINE IN 180 DAYS RENEWABLE FEDERAL PUBLIC ADMINISTRATION INICIATES THE PROCEDURE IN CASE OF IRREGULARITIES COMPANY ACQUITTED or FINES, PUBLICATION OF THE DECISION AND PROHIBITION OF HIRING LEGAL BASIS BRAZILIAN COMPANY CLEAN ACT AND BIDDING LAW OTHER SIMILAR PUNISHMENTS Infograph CGU webiste COMPANY PUNISHED

7 Brazilian Company Clean Act 2 FINES HOW TO CALCULATE (Normative Instruction n 1/2015) 1% to 2,5% 1% to 2,5% 1% to 4% 1% Continuity in time Tolerance in the company s management Interruption of work or public services Positive economic situation of the company 1% 1,5% 1% to 5% Non materialization of the infringement Compensation of damages The Company s level of cooperation FINE Base and Cap From 0.1% to 20% of the gross revenues of the company, or from BRL 6,000 to BRL 60,000,000 when not possible to calculate the revenues. 5% Recurrence 2% Spontaneous communication 1% to 5% Total amount of the existing and up-held contracts 1% to 4% Existence of a Compliance Program SUM OF AGGRAVATING FACTORS SUM OF MITIGATING FACTORS Infograph CGU webiste

8 Brazilian Company Clean Act 3 LENIENCY AGREEMENT REQUIREMENTS To stop the practice of the investigated irregularity (Ordinance n 910/2015) POSSIBLE BENEFITS Exemption from the requirement to publish the punishment To admit the participation in the infringement To cooperate with the investigations Exemption from the prohibition to receive incentives, loans and subsidies from the Federal Government Reduction of the fine by up to 2/3 To provide information that prove the infringement Exemption or attenuation from the possibility of contracting with the Public Administration DEADLINE FOR CELEBRATION 180 days, renewable Infograph CGU webiste COMPETENCE Exclusive to the General Comptroller s Office in the Federal Executive branch REPAIRING The company has a duty to full compensation for the damage COMPLIANCE The company should take, apply or improve a compliance program

9 Brazilian Company Clean Act 4 NACIONAL REGISTER (Normative Instruction n 2/2015) CEIS Cadastro Nacional de Empresas Inidôneas Suspenas National Register of Suspended Disreputable Companies CNEP Cadastro Nacional de Empresas Punidas National Register of Punished Companies Temporary suspension of participation in bids. Prevention of bidding and contracting with Federal, State, Federal District or Municipalities. Sanctions imposed on the grounds of the Brazilian Company Clean Act. Contains information related to breach of leniency agreement. REGISTRATION DATA Declaration of unfitness to bid or contract with the public administration. IDENTIFICATION Name or corporate name of the individual or legal person, CPF or CNPJ. PUNISHMENT Punishment; legal basis; number of case; date of the beginning of punishment or date of punishment application; date of final punishment, when appropriate; organ and sanctioning fine, when fit. Infograph CGU webiste

10 Brazilian Company Clean Act 5 COMPLIANCE PROGRAM (Ordinance n 909/2015) KEY ELEMENTS INTERNAL AUDIT SYSTEM HELPLINE Employee s training on the Code of Conduct RELIABLE AND EFFECTIVE Coercive force in case of infringement APPLICABLE TO ALL EMPLOYEES Including top management Infograph CGU webiste MICRO AND SMALL COMPANIES Special treatment with the reduction of formalities and evaluation parameters

11 Compliance Program Adequate Procedures Implementation of the Six Key Principles Top Level Commitment Culture Policies & Procedures Proportionate Procedures Proportionate to bribery risks, nature, scale and complexity of a company s activities; clear, practical, accessible and effectively implemented and enforced. Monitoring and Review Periodic review of policies and procedures by internal or external experts. Action Monitoring & Review Top-Level Commitment Top-level management must be committed to preventing bribery and must foster a culture in which bribery is never acceptable. Risk Assessment Risk Assessment Assess nature and extent of exposure to external and internal risks; should be informed, documented and conducted periodically. Communication Policies & Procedures must be embedded and understood throughout the organization. ; achieved by internal and external communication, including training, that is proportionate to the risks. Communication Due Diligence Knowledge Due Diligence Apply a proportionate and risk based approach to due diligence. 11

12 What are Internal Controls? Polices and Procedures To ensure that transactions are properly recorded and that corruption can be detected. Does the left hand know what the right hand is doing? Ethics Code of Conduct 3.1

13 What is Integrity Due Diligence (IDD)? Gathering Information On counterparties (and sub-suppliers) to ensure they are a suitable partner for the company: corruption Sanctions Human Rights labor practices Who are we doing business with? Legal/Compliance Officer to be kept informed. Recommendations must be followed. Ethics Code of Conduct 5.3 / WR 2988

14 Third Parties are the Greatest Risk Approximately 90% of US Enforcement Actions involved the use of third parties. Your corporate structure may not protect you No contract required. The universe is expanding. The standards expected of you are higher than ever.

15 How to manage Third Party Risks Before During After IDD Who are they? What do they do? Where are they doing it? What is their ABC program? How is it implemented? Risk assess the relationship/activity Devise a management plan What are they doing? Who are they using? What are they paying for? Receipts? Project Structure? Communications? Knowledge Management (Red Flags)? Documentation. Archives. Rationally organized & accessible. Tie off loose ends.

16 Mitigating Actions Develop alignment between Business, Staffs, Country Office and Compliance. Monitor contracts. Develop contract language specific to high risk countries / high risk activities. Continuous training o, third parties and local staff vendors on compliance and relevant persons (esp. Procurement & F&C) on how to spot irregularities. Tone at the Top be clear that delays are preferable to corruption risk. Meet with government agencies to better understand regulatory framework, timeframes and costs. Set the tone. Schedule the projects to account for delays. Do not put undue or predictable pressure on your contractors. Be present. Ensure proper resources.

17 Communication is fundamental!

18 THANK YOU Ethics and Anticorruption Compliance July 15, 2015 Leticia Andrade