WEST
MIDL
ANDS
CO
MP
AN
YG
UIDE27
On
yo
ur
gu
ar
d
Do
ing
business
in
ne
wm
ar
ke
ts
can
lea
ve
a
compan
yf
eeling
uneasy
about
the
ri
sk
of
emplo
ye
es
and
contrac
to
rs
falling
fo
ul
of
br
iber
y
and
cor
ruption
la
ws
.
Jona
than
Lo
ve
ll,h
ead
of
KP
MG
Fo
re
nsic
in
Bir
mingham
looks
at
ho
wl
ocal
companies
can
minimise
that
ri
sk
While
new
and
emerg
ing
markets
create
opportun
ities
for
busines
s,
they
also
pose
an
increased
threat
of
fraud
and
corruption
.M
any
developing
countries
are
well
known
to
be
dogged
by
corruption
and
in
some
cases
this
has
led
to
a
number
of
those
countries
being
seen
as
no-go
areas
for
some
business
es.
Wi
th
this
in
mind,
it
is
essential
for
busines
ses
to
understan
da
nti-bribery
legislation,
and
to
ensure
that
they
comply
both
with
the
spirit
and
the
letter
of
the
law
.I
nt
his
respect,
there
are
two
key
pieces
of
legislation
to
consider
.
Firstly
,t
he
UK
Anti-T
errorism,
Crime
and
Security
Act
2001,
identifies
bribery
and
corruption
as
ac
riminal
of
fence.
The
UK
2001
Act
came
into
force
after
the
UK
signed
the
OECD
Anti-Bribery
Convention,
and
is
meant
to
deter
UK
companies
and
nationals
from
committi
ng
acts
of
bribery
overseas.
UK
companies
and
nationals
can
now
be
prosecuted
in
the
UK
for
an
act
of
bribery
committe
dw
holly
overseas.
Secondly
,t
he
US
Foreign
Corrupt
Practices
Act
1977
was
enacted
as
ar
esult
of
an
umber
of
scandals
and
was
designed
to
restore
public
confidence
in
the
integrity
of
the
US
business
system.
The
US
FCP
Ah
as
extra-territorial
reach
and
is
broad
in
its
application,
extending
well
beyond
companies
listed
on
the
US
stock
exchanges.
Ac
omprehensive
understanding
of
the
provisions
of
both
these
Acts
is
critical
to
any
enterprise
operating
in
multiple
jurisdictions.
In
order
to
prevent,
detect
and
respond
to
bribery
and
corruption
issues,
an
ef
fective
compliance
programme
should
be
implement
ed.
Each
company
needs
to
consider
their
specific
risk
factors
and
relevant
business
processes
in
order
to
implement
an
ef
fective
program.
There
is
no
single
answer
as
to
what
an
ef
fective
compliance
programme
should
look
like,
although
it
may
include
the
following.
To
ne
at
the
top
Setting
the
tone
at
the
top,
including
the
assignment
of
one
or
more
independent
senior
individuals
char
ged
with
responsibility
for
compliance
is
central
to
an
ef
fective
compliance
programme.
These
individuals
are
responsible
for
the
implement
ation
and
oversight
of
compliance
with
anti-bribery
and
corruption
policies
and
procedures
established
in
accordance
with
ac
ompany8217
so
verall
compliance
programme.
They
should
have
ac
lear
reporting
line
to
the
senior
executives
of
the
company
to
facilitate
ef
fective
communication
and
to
keep
anti-bribery
and
corruption
compliance
on
the
agenda.
It
is
unlikely
to
be
sufficien
tt
os
imply
add
anti-bribery
and
corruption
compliance
to
an
individual8217
se
xisting
responsibilities
if
they
do
not
have
the
requisite
time
and
resources
to
fulfil
the
requirements
of
the
role.
Those
char
ged
with
responsibility
for
anti-bribery
and
corruption
compliance
should
be
supported
by
adequately
trained,
qualified
and
capable
personnel
who
have
the
time
and
resources
to
assist
them
with
their
anti-bribery
and
corruption
responsibilities.
An
inter
national
anti-bribery
and
compliance
policy
Ac
ompany
should
have
ac
learly
articulated
global
compliance
programme
which
sets
out
the
requirements
of
the
UK,
US
and
other
anti-bribery
and
corruption
legislation
relevant
to
its
busines
s,
along
with
the
policies
and
procedures
the
company
has
adopted
to
comply
with
the
legislation.
This
global
programme
should
be
adopted
and
implemented
by
the
local
busines
su
nits
and
departments
of
the
company
.
Tr
aining
and
certi64257cation
Regular
training
for
employees
and
agents
should
be
given
to
ensure
they
are
aware
of
their
responsibilities
under
the
relevant
anti-bribery
and
corruption
legislation,
and
the
activiti
es
for
which
they
may
be
found
liable.
Employees
and
agents
should
also
be
required
to
sign
an
annual
certificati
on
to
demonstrate
their
understanding.
Integrity
due
diligence
In-depth,
accurate
and
timely
information
allows
companies
to
make
informed
decisions
regarding
who
they
are
doing
business
with
and
enables
them
to
take
necessary
precautions
for
monitoring
high
risk
areas
of
their
operations.
Integrity
due
diligence
involves
the
search,
collecti
on
and
analysis
of
information
8211f
rom
both
public
and
confidential
sources
8211o
nt
he
background,
ownership,
business
track
record,
reputation
and
integrity
of
entities
or
individuals.
Whistleblower
hotlines
Ar
eporting
system
for
employees
and
agents
to
report
suspected
anti-bribery
and
corruption
violations
and
other
criminal
conduct
can
be
an
importan
te
lement
of
an
ef
fective
compliance
programme.
Ah
otline
enables
anonymous
reporting
and
can
often
be
the
first
indication
of
ap
roblem
that
needs
to
be
addressed.
Previous
KPMG
research
has
found
that
50
per
cent
of
fraudulent
or
corrupt
activity
is
discovered
through
whistle-
blowing
by
employees,
and
that
employees
are
twice
as
likely
to
report
such
activity
through
hotlines
compared
to
five
years
previously
.
Monitoring
for
compliance
and
feedback
Ar
isk-bas
ed
approach
to
monitoringf
or
compliance
should
be
adopted.
This
should
tar
get
activity
towards
those
areas
that
are
considered
most
at
risk.
For
example,
high-risk
jurisdictions
or
business
areas
in
which
controls
are
considered
to
be
weak,
or
where
a
previous
violation
has
occurred.
An
annual
risk
assessment
should
be
completed
to
ensure
changes
in
the
nature
and
size
of
business
operations
are
taken
into
account.
Monitoring
for
compliance
in
conjunction
with
a
risk-based
approach,
may
include
in-country
visits
to
conduct
on-site
audits
and
to
review
systems
and
controls.
Ac
omprehensive
compliance
programme
should
be
regularly
updated
with
findings
from
the
monitoring
process
and
changes
in
local
legislation,
to
ensure
it
is
up-to-date
and
relevant
to
the
business.
The
compliance
programme
should
also
be
adapted
to
incorporate
recommendati
ons
from
investigations
into
alleged
violations,
taking
into
account
lessons
learnt
to
improve
the
framework
for
the
future.
Response
pr
ogramme
To
be
ef
fective
against
the
threat
of
fraud,
corruption
and
misconduct,
or
ganisations
should
have
ar
obust
cross-
border
investigations
methodology
which
will
enable
them
to
respond
efficiently
and
ef
fectively
to
violations.
An
ef
fective
response
programme
should
clearly
set
out
the
response
to
an
alleged
violation
including
who
is
responsible
for
leading
the
investigation,
how
the
alleged
wrongdoer
is
dealt
with,
and
the
process
for
investigating
the
alleged
violation
including
procedures
for
maintaini
ng
the
integrity
of
the
data.
The
response
programme
should
also
set
clear
guidelines
for
the
use
of
external
lawyers
to
establish
legal
privilege
if
applicable,
and
make
decisions
regarding
disclosure
to
the
regulators.
It
should
also
address
when
professional
services
firms
are
to
be
used
to
conduct
an
independent
investigation.
Non-compliance
of
anti-bribery
and
corruption
laws
can
be
severe.
For
example,
failure
to
comply
with
the
US
FCP
Ac
ould
result
in
fines
in
the
tens
of
millions
of
dollars
including
potential
disgor
gement
of
profits
from
illicit
ly-
gained
contracts.
Wi
th
increased
activity
by
both
the
US
and
UK
regulators
,p
lus
the
ongoing
negative
busines
sp
erception
of
corruption
among
the
emer
ging
markets,
failure
to
take
action
to
prevent,
detect
and
respond
to
bribery
and
corruption,
could
prove
expensive.
KP
MG
re
sear
ch
has
fo
und
tha
t5
0p
er
ce
nt
of
fr
audulen
t
or
co
rr
upt
ac
tivit
y
is
disc
ov
er
ed
thr
ough
whistle
-
blo
wing
by
emplo
ye
es
,a
nd
tha
te
mplo
ye
es
ar
et
wic
ea
sl
ikely
to
re
por
ts
uch
ac
tivit
yt
hr
ough
hotlines
co
mpar
ed
to
fiv
ey
ears
pr
eviously
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