Policy Debate: Perspectives on Global Device Industry Ethics & Compliance Initiatives

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1 Policy Debate: Perspectives on Global Device Industry Ethics & Compliance Initiatives Moderator: Brian Sheridan Vice President,, Corporate Legal Affairs, General Counsel The Sorin Group 2013 International Medical Device Industry Compliance Conference

2 Perspectives on Global MedTech Industry Ethics & Compliance Initiatives International MedTech Compliance Conference May 2013 Warsaw, Poland Mr. Chiawen Kiew, Legal Expert, OECD Anti-Corruption Division

3 The OECD Anti-Bribery Convention History of the OECD Anti- Bribery Convention U.S. Foreign Corrupt Practices Act (1977) Came into force 15 February States Parties (34 OECD countries + 6 non-oecd countries) The Working Group on Bribery 2/3 world exports (2011) Non-OECD countries: Argentina, Brazil, Bulgaria, Colombia, Russia, South Africa Emerging economies: Argentina, Brazil, Chile, Colombia, Israel, South Africa, Russia, Turkey G20: 15 out of 19 (20 th is the EU) 3

4 Regulatory Landscape of WGB Legislation criminalising bribery of foreign public officials in all 40 member countries (e.g., UK Bribery Act) Russia and Colombia recently enacted Prohibition on tax deductions for bribes paid Establishment of effective corporate liability Enforcement of foreign bribery (as of 2011) 210 individuals and 90 entities for foreign bribery Approximately 300 investigations in 26 States Parties Pressure from int l organisations, member countries, and civil society organisations to increase enforcement.

5 What About Emerging Markets? China Foreign bribery offence in force as of May 2011 India Introduced in Parliament in 2011; expected to be enacted 2013 Malaysia Section 22 of MACC Act as of 2010 Prosecuted foreign company for domestic corruption Indonesia Draft foreign bribery legislation ; expected to be passed in 2014 (tentatively) KPK actively investigating domestic bribery by transnational actors

6 Growing Role for Corporate Compliance UK Bribery Act (Defense) Section 7: Adequate procedures to prevent persons associated with it from committing bribery Australia Criminal Code (Element) Liable if corporate culture encouraged, tolerated or led to the offence, or if it did not create a compliant corporate culture. Canada Criminal Code (Element) Section 22.2: With the intent at least in part to benefit the organisation, one of its senior officers : [ ] 3. Knowing that a representative of the organisation is or is about to be a party to the offence, does not take all reasonable measures to stop them from being a party to the offence. U.S. Sentencing Guidelines (Mitigation) Effective Compliance and Ethics Program

7 Accounting and Internal Controls Over 60 individuals and 100 companies sanctioned for other offences related to foreign bribery Charges usually based on: Ineffective corporate governance response Failure in internal audit controls Lack of implementation of paper policies Inadequate communications from top management

8 International Standards for Compliance 2009 Recommendation, Annex II ( Good Practice Guidance ) is the only international guidance issued to the private sector that has been endorsed by the major exporting countries. Sets out the basic requirements for a compliance programme: Visible corporate policy prohibiting foreign bribery Risk-based due diligence Oversight and detection of foreign bribery issues Communication from senior management Channels of reporting and whistleblower protection

9 Potential Areas for Improvement Awareness among SMEs Whistleblower protection Ensuring compliant third-parties and supply chain Monitoring and auditing Training of third parties Awareness among internal and external auditors and accountants Weakness in anti-foreign bribery policies Definition of foreign public official Gifts and hospitality expenses

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11 "Drinking the Kool-Aid" is a metaphor commonly used to refer to a person or group holding an unquestioned belief, argument, or philosophy without critical exeamination

12 Eucomed Code revised AdvaMed mission statement includes Global First AdvaMed Code (1993) AdvaMed Code revised AdvaMed Code revised First International MedTech Compliance Conference 1900s Kuala Lumpur Principles Distributor training tools and DD tool First Eucomed Code (1998) Transparency International Business Principles for Countering Bribery Eucomed Code revised US Sunshine Act Eucomed enforcement rules (Independent Compliance Panel) Eucomed Conference Vetting System Joint AdvaMed/Eucomed Distributor Guidance

13 Foreign Corrupt Practices Act (FCPA) Italian D.L. 231/2001 mirrors OECD French Sunshine Act FCPA Guidance OECD Anti-Bribery Convention UK Bribery Act Breast Implant Scandal in France

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