Adequate Procedures: An International Overview Rossana Buzzi, Invensys Jonathan Armstrong, Cordery SCCE 14th Annual Compliance and Ethics Institute 5 October 2014 Legal Disclaimer The views stated herein are solely those of the presenters. Everything in this presentation is a generalization and is subject to exceptions. Cordery 2015 Invensys 21 September 2015 2 1
What this presentation will cover? Anti bribery legislation in Italy Anti bribery legislation in the UK Adequate procedures US Multinational Organizations with branches in Italy: which responsibility? Questions Cordery 2015 Invensys 21 September 2015 3 Anti bribery legislation in Italy Legislative Decree 231/01 and its development Responsibilities of the local organization Territoriality of the offense : no more boundaries? Exclusions Organismo di Vigilanza (internal body) Which adequate procedures? Sanctions and fines Cordery 2015 Invensys 21 September 2015 4 2
UK Legislation Highlights Applies to public & private officials Increases penalties 10 years jail and/or unlimited fines for individuals, companies & partnerships Offences o Offering, promising or giving an advantage o Requesting, agreeing to receive or accepting an advantage o Bribing a foreign public official o Failure to prevent bribery Accepting a bribe as well as giving one is an offence Cordery 2015 Invensys 21 September 2015 5 New UK Legislation Geographical Reach The offences of giving and receiving bribes and bribing foreign public officials apply to UK corporate entities, even if they are foreign owned British citizens Individuals ordinarily resident in the UK regardless of where the relevant act occurs Non UK nationals & entities if an act or omission forming part of the offence takes place within the UK Cordery 2015 Invensys 21 September 2015 6 3
SFO Current Activity Annual Report (2014 2015): 9 successful prosecutions 18 defendants Conviction rate of 78% 16 new investigations 30 defendants in 7 cases charged & awaiting trial Cordery 2015 Invensys 21 September 2015 7 MoJ Guidance Six principles for Bribery Prevention 1.Proportionate procedures 2.Top level commitment 3.Risk assessment 4.Due diligence 5.Communication (including training) 6.Monitoring and review Cordery 2015 Invensys 21 September 2015 8 4
Proportionate procedures "A commercial organization's procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organization's activities. They are also clear, practical, accessible, effectively implemented and enforced." Cordery 2015 Invensys 21 September 2015 9 Top level commitment "The Top Level management of a commercial organization (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by a person associated with it. They foster a culture within the organization in which bribery is never acceptable." Cordery 2015 Invensys 21 September 2015 10 5
Risk assessment "The commercial organization assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented." Cordery 2015 Invensys 21 September 2015 11 Due diligence "The commercial organization applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organization, in order to mitigate identified bribery risks." Cordery 2015 Invensys 21 September 2015 12 6
Communication (including training) "The commercial organization seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organization through internal and external communication, including training that is proportionate to the risks it faces." Cordery 2015 Invensys 21 September 2015 13 Monitoring and review "The commercial organization monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary." Cordery 2015 Invensys 21 September 2015 14 7
Anti bribery legislation in other parts of Europe EU Germany Switzerland France Cordery 2015 Invensys 21 September 2015 15 US Multinationals: which responsibility? Principles of administrative & criminal liability Budget / resources dedicated to compliance Benchmark Recent courts rulings in Italy against multinationals Cordery 2015 Invensys 21 September 2015 16 8
Practical steps 1. Set out a clear policy 2. Establish clear rules on entertaining both giving & receiving 3. Train your staff and keep training records 4. Due diligence on staff and associated persons 5. Establish an investigation procedure 6. Take data protection consents when offering jobs to new employees 7. Proper contracts with agents & suppliers prohibit subcontracting 8. Show how to get help and guidance 24x7x365 Cordery 2015 Invensys 21 September 2015 17 Resources 1. Checklist for new jurisdictions www.corderycompliance.com/news 2. Summary of SFO Annual Report http://bit.ly/1pqli9z 3. UK Serious Fraud Office Annual Report shows continued modest progress http://bit.ly/1elko0l 4. Update on Obligation to Report on Payments to Governments http://bit.ly/1c0ywqb 5. New SFO case is a reminder of issues of corruption in procurement http://bit.ly/1neguj8 6. FOI request shows more Bribery Act 2010 prosecutions http://bit.ly/1nbfmut 7. New UK bribery case SFO press ahead with anti corruption enforcement with printing case http://bit.ly/17u2a2p Cordery 2015 Invensys 21 September 2015 18 9
Questions Rossana Buzzi Assistant General Counsel Ethics & Compliance Leader South Europe Schneider Electric Invensys rossana.buzzi@schneider electric.com +39 02 26297294 Jonathan Armstrong Cordery jonathan.armstrong@corderycompliance.com +44 (0)207 075 1784 www.twitter.com/armstrongjp Cordery is a trading name of Cordery Compliance Limited. Authorised and regulated by the Solicitors Regulation Authority. SRA number 608187. Company number 07931532 registered in England and Wales. VAT number: 730859520 Registered office: Lexis House, 30 Farringdon Street, London, EC4A 4HH, United Kingdom 2013 Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP. Duane Morris Firm and Affiliate Offices New York London Singapore Los Angeles Chicago Houston Hanoi Philadelphia San Diego San Francisco Baltimore Boston Washington, D.C. Las Vegas Atlanta Miami Pittsburgh Newark Boca Raton Wilmington 2015 Invensys. Cherry Hill All Lake Rights Tahoe Reserved. Ho Chi Minh City Duane Morris LLP A Delaware limited liability partnership The names, logos, and taglines identifying the products and services of Invensys are proprietary marks of Invensys or its subsidiaries. All third party trademarks and service marks are the proprietary marks of their respective owners. www.duanemorris.com 10