Discussing Cultural Components to Deter Fraud and Corruption in an Organization

Transcription

1 The First Latin American Pharmaceutical and Medical Device Compliance Congress Discussing Cultural Components to Deter Fraud and Corruption Felipe Coronel : Felipe.Coronel@grunenthal.com Alexandre da Cunha Serpa : alexandre.serpa@novartis.com) Carlos Tessi : Carlos.Tessi@bausch.com Dianne Phoebus: Dianne.Phoebus@bakermckenzie.com

2 Perception: Transparency International Cultural issues and components Acceptance of bribery in LatAm: by Latin Americans by foreigners and foreign companies doing business in the region Whistleblower concept Inoperable in most LatAm countries Importance of localized training to satisfy FCPA standards Orthofix case Number One Challenge Conclusions The First Latin American Pharmaceutical

3 Sao Paulo Brazil October 2 4, 2012

4 PERCEPTION: TRANSPARENCY INTERNATIONAL

5 Transparency International Corruption Perception Index 2011

6 Chile 7.2 Uruguay 7.0 Costa Rica 4.8 Cuba 4.2 Brazil 3.8 Colombia 3.4 Peru 3.4 Panama 3.3 Mexico 3.0 Argentina 3.0 Ecuador 2.7 Dom. Rep. 2.6 Paragua 2.2 Venezuela 1.9 Haiti 1.8 Sweden 9.3 Switzerland 8.8 Japan 8.0 Germany 8.0 Japan 8.0 United Kindom 7.8 Chile 7.2 United States 7.1

7 ACCEPTANCE OF BRIBERY

8 At one time, bribes to foreign public officias were tax deductible (Prior to 1996) In the remaining countries bribes to foreign public officials were still as deductible as any other business expense, at least in principle. In practice, a deduction for a bribe was often disallowed because of insufficient documentation to support the fact that the expense was a necessary part of the transaction in question. Moreover, the deductibility of bribes to foreign officials was generally conditioned upon disclosing the identity of the recipient to the tax authorities, which taxpayers are naturally reluctant to do. oecd Observer: Writing off tax deductibility: The tax deductibility of bribes is a practice which the Convention has made easier to abolish. Martine Milliet Einbinder Financial, Fiscal and Enterprise Affairs Directorate (DAF) The First Latin American Pharmaceutical

9 Sao Paulo Brazil October 2 4, 2012

10 THE WHISTLEBLOWER

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12 IMPORTANCE OF LOCAL AND LOCALIZED TRAINING

13 Orthofix case arising out of payments made by Mexican Subsidiary to Social Security System use of local language is essential to FCPA compliance. FCPA compliance trainings must be conducted in local languages to have an impact. FCPA policies must be translated into local languages, and done so correctly. In the settlement, the SEC did not mince its words: Orthofix did not have an effective FCPA compliance policy or FCPA related training because it distributed codes of ethics and conducted anti bribery training only in English, and it was unlikely that [the subsidiary s] employees understood them. Comments taken from : local language essential to effectivefcpa compliance

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15 NUMBER ONE CHALLENGE

16 NUMBER ONE CHALLENGE IN LATIN AMERICA FOR DETERRING CORRUPTION AND FRAUD: I WON T GET CAUGHT, AND IF I DO, I WON T GET PUNISHED

17 CONCLUSIONS

18 The Fraud Triangle Sao Paulo Brazil October 2 4, 2012

19 The First Latin American Pharmaceutical and Medical Device Compliance Congress Discussing Cultural Components to Deter Fraud and Corruption Felipe Coronel : Felipe.Coronel@grunenthal.com Alexandre da Cunha Serpa : alexandre.serpa@novartis.com) Carlos Tessi : Carlos.Tessi@bausch.com Dianne Phoebus: Dianne.Phoebus@bakermckenzie.com