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Anti-Corruption Compliance

A Guide for Small and Mid-Sized Organizations

Gemma Aiolfi

This indispensible book offers step-by-step guidance to small and mid-sized companies and non-profit organizations in managing corruption risks in overseas markets. It covers how and why to build a culture of integrity, develop a risk-based anti-corruption compliance programme, and engage with other industry players in collective action against shared corruption challenges, taking a hands-on approach and featuring case studies, quick definitions, tips and practical tools such as checklists.
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Index

Gemma Aiolfi

acceptability of paying a bribe 1015
accounting 152
acquisitions 29
action plan 42, 567
active bribery 157, 159
active listening 20, 235
adequate procedures 667, 141
advice hotline 11113
Agence française anti-corruption (AFA) 149, 161, 162, 163, 164
risk assessment 367, 43, 44
Alliance for Integrity (AfIn) 12930
amalgamation of functions 32
anti-corruption/anti-bribery policy creating 658
see also policies
anti-corruption audits 114, 115, 121
anti-corruption champions 32
anti-corruption compliance programme see compliance programme
Argentina 131, 1379
Asia-Pacific Economic Cooperation (APEC) SME Leaders in Ethics and Integrity Program 13940
auditors 44
audits, anti-corruption 114, 115, 121
awareness-raising 11011, 120
see also training
bank accounts 924
Basel Institute on Governance 125, 143
Basel Open Intelligence 89
benefits of a compliance programme 1014
board of directors 19, 30, 31
crisis management 11920, 1223
mandate for risk assessment 46
bribery 68, 2021, 62
acceptability of 1015
active 157, 159
on behalf of larger customers 512
controls addressing third-party risks 8391
dealing with bribe solicitation 1035
of government officials see government officials
impact of allegations of 116, 11819
passive 157
steps in bribery risk assessment 4358
Brockmeyer, Kara 156
BSR 134, 137, 138
business environment 6
business model, change of 29
business opportunities 5052
business partners 45, 523, 55
Cain, Charles 156
cash 93
petty cash 93, 989
cash equivalent 69, 71
cash gifts 69, 712
certification 14850
challenging situations 267
charitable donations 50, 80, 812, 93
civil society organizations 143
close connection rule 159
code of conduct 17, 20, 45, 6065
drafting 614
fit with policies and procedures 645
usefulness 6061
code of ethics 4, 61
see also code of conduct
collective action 3, 45, 43, 97, 104, 12443
business case for 1278
defining 1267
information and resources 143
initiatives 12941
readiness for 1412
situations requiring 1289
commercial organization, defining 169
communication strategy 20
company registration documentation 87
compensation 89
competitive advantage 28
compliance 45, 910
how a strong culture supports compliance 1819
compliance function 3033
compliance officer 3033, 43, 120, 121
compliance programme 35, 9, 101
benefits of 1014
COSO 2013 Framework 15051
culture see culture
elements of 5
French Sapin II law 1613
governance see governance
ISO 37001 certification 14850
leadership see leadership
monitoring 11416
USA guidance 1534
Confederation of Indian Industry (CII) 1323
conflicts of interest 16, 62, 67
managing 823
consultation 62
contracts 61
value of 88
controls 65
addressing bribery risks from third parties 8391
COSO Internal Control Framework 15051
financial see financial controls
risk assessment and effectiveness of 42, 546
see also policies
conventions judiciaire d’intérêt public (CJIPs) 161, 1634
corporate culture see culture
corporate events 779
corruption, defining 78
COSO 2013 Framework 15051
Council of Europe 146, 147
country risk 41, 468, 867, 95
crisis management 11623
cross-debarment 147
culture 3, 45, 10, 1522
changing the organization’s culture 1922
compliance supported by strong culture 1819
speak-up culture 1718, 20, 235, 102
customers
pressure from 1112
terms and conditions 12
customs clearance 958
daily allowances 74, 756
dealing with bribe solicitation 1035
deceiving the principal 165
declining hospitality 767
DEPE training programme 130
disclosure 82, 83
documentation 62, 67, 134
good governance and 334
incomplete and customs clearance 96
risk assessment 40
training 111
donations 50, 62, 8082, 93
drivers of compliance 614
due diligence 4, 5, 10, 28, 67, 95
third-party risks 84, 8591
Duross, Chuck 155
e-customs systems 26, 96
e-government 26, 67, 95
Egyptian Junior Business Association (EJB) 133
employees
empowerment to speak up 1718
high-level employees thinking they are above the rules 212
involvement in changing the culture 20
recruitment 13, 256, 83
resistant to anti-corruption compliance 256
risk assessment 412, 53
empowerment 1718
enforcement officials 1567
entertainment see gifts and entertainment
ethical maturity 31, 32
expansion 14
exposure to risk 54
external risks 423
facilitation payments 62, 102, 10410
approaches to tackle 10710
regarded as bribes 1057
failure to prevent bribery 158, 160
fair competition 1256
fear 107
fees 89
finance, access to 1011
financial controls 45, 55, 91100
customs clearance for international transactions 958
off-book funds 914
petty cash 989
segregation of duties 99100
strengthening to reduce fraud risks 945
Foreign Corrupt Practices Act (FCPA) 51, 146, 152
FCPA Guidance 153, 154, 1556, 162
risk assessment 40
foreign public officials, bribery of 7, 52, 158, 160, 1667
France 1614
AFA see Agence française anti-corruption
fraud 17
strengthening financial controls to reduce risk 945
Full Code Test 106
gifts and entertainment 50, 62, 93
decision tree 70
declining 767
large corporate events 779
limits to hospitality and travel 736
policy 6879
reasons for offering 6971
tips and gratuities 712
global approach 39
governance 15, 2834
crisis management 11920
documentation 334
good governance of the compliance programme 2930
need for a compliance function 3033
government officials
foreign 7, 52, 158, 160, 1667
gifts and entertainment policy 69, 70, 723, 74, 756, 789
interactions with 87
local 52
MACCA 1667
MACN 1356
third-party risk 87
using public office for gratification 167
government oversight 4950
government support schemes 143
gratuities 712
Group of States against Corruption (GRECO) 147
guidance documents 367
FCPA Guidance 153, 154, 1556, 162
France 1612, 163, 164
Malaysia 168
UK 37, 53, 124, 141, 16061
holiday gift-giving 77
hospitality see gifts and entertainment
human resources staff 556
import tariffs 967
improper performance 159
indirect bribery 834
individual support 164
inducement 165
inductions 56
industry sector risk 489
inspections of ships 1379
integrity 10, 1213
recruitment for 256
Integrity Journey (‘Jornada Íntegra’) 130
Integrity Passport programme 131
Integrity Pledge 133
interaction with public officials 87
intermediaries 834, 93
see also third parties
internal controls 15051
internal risks 423, 53
International Chamber of Commerce (ICC) 149
guidance on red flags 9091
RESIST principles 103
international standards on anti-corruption 89, 14451
COSO 2013 Framework 15051
in domestic laws 15172
ISO 37001 14850
MDBs 1478
OECD Convention 8, 834, 1456, 161, 172
regional conventions 1467
UNCAC 1445
international transactions 958
intracompany transfers 52
investigations 53, 11314
investment, access to 1011
invitations 70, 74, 789
ISO 37001 14850
know your customer (KYC) 845
Knox, Jeffrey 156
large corporate events 779
lavish hospitality 6970, 756
leadership 15, 228, 124
APEC SME Leaders in Ethics and Integrity Program 13940
in challenging situations 267
of collective action 1412
competitive advantage 28
crisis management 11617
recruitment 256
of risk assessment 434
through shared values 235
legal advice 8, 117
legal risks 78, 42, 4950
liability of companies and their officers 1679
listening, active 20, 235
lobbying 81
local agents 49
customs clearance 968
local risk assessments 39
Malaysia 1649
Anti-Corruption Commission 36
Anti-Corruption Commission Act (MACCA) 164, 1659
bribery of foreign public officials 1667
bribery of an officer of a public body 166
Companies Act 164, 169
corruptly procuring withdrawal of tender 166
giving or accepting gratification by agents 165
giving or accepting gratification as inducement 165
liability of companies and their officers 1679
offence of deceiving the principal 165
Penal Code 164, 167
using public office for gratification 167
mandate for risk assessment 46
Maritime Anti-Corruption Network (MACN) 978, 1339
in Argentina 1379
market confidence 1212
mentoring 14041
micro-businesses 589
monitoring 151
the compliance programme 11416
risk assessment 578
multilateral development banks (MDBs) 1478
multinational enterprises (MNEs) 1, 2, 10
avoiding pressure from 1112
off-book funds 914
official facilitation payments 108
opportunities, business 5052
Organisation for Economic Co-operation and Development (OECD)
Anti-Bribery Convention 8, 834, 1456, 161, 172
Good Practice Guidance on Internal Controls, Ethics and Compliance 105, 162
Panalpina Group 512
partners, business 45, 523, 55
passive bribery 157
payments by third parties 85
peer monitoring mechanism 1456
per diems (daily allowances) 74, 756
Peruvian Law 30424 16972
petty cash 93, 989
planning risk assessment 436
police requests for petrol 267
policies 6483, 120, 121
conflicts of interest 823
creating anti-corruption policy 658
donations 8082
fit with code of conduct and procedures 645
gifts and entertainment 6879
necessity of 667
zero tolerance 24, 102, 1067
see also controls
political donations 50, 80, 93
port agents 135
pressure from large customers 1112
prevention models 17072
priority setting 567
procedures 645, 667
Procureur de la république financier (PRF) 161, 1634
public officials see government officials
qualitative data 545
quantitative data 545
quantitative risk assessment 412
reasonable hospitality 756
record-keeping see documentation
recruitment 13, 83
for integrity 256
red flags 8991, 114
regional anti-corruption conventions 1467
registration documentation 87
relevant commercial organization 158
reporting channels 11113
reports 11314
reputation 6
crisis management 11920, 1212
protecting and enhancing 13
third-party risks 889
RESIST principles 103
resistant employees 256
risk 4
external risks 423
internal risks 423, 53
involving third parties 8391
mitigation by third parties 89
red flags (risk indicators) 8991, 114
risk assessment 5, 9, 31, 3559, 65, 151
action plan and priority setting 42, 567
checklist 58
creating a work plan 456
effectiveness of controls 42, 546
evaluating exposure 54
getting a mandate 46
guidance documents 367
identifying corruption risks 4653
leading 434
local 39
monitoring and reviewing 578
problems of not having 356
quantitative approach 412
reasons for delaying 38
scope 40, 445
steps in 4358
for very small/micro businesses 589
when wrongdoing is discovered 53
risk-based approach 445, 84, 95
risk management 9, 12021
Sapin II law (France) 1614
sectoral risk 489
Securities and Exchange Commission (SEC) 51, 153
segregation of duties 99100
self-reporting to government authorities 117
sentencing guidelines 1545
Serious Fraud Office 106
Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA) 1379
shared values 235
shipping
captains dealing with customs cleareance 978
collective action 1339
Skansen Interiors Limited 667
slippery slope 1213
small and medium-sized enterprises (SMEs) 12
advantages in creating an ethical culture 1819
APEC SME Leaders in Ethics and Integrity Program 13940
business case for considering collective action 1278
mentoring 14041
‘starter’ risk assessment for very small companies 589
SNC-Lavalin 14041
speak-up culture 1718, 20, 235, 102
sponsorships 62
stakeholder trust 1212
standard operating procedures see procedures
state-owned/state-controlled companies 723
Stokes, Patrick 1567
tariffs 967
tax auditor 323
third parties 93
awareness-raising and training 11011
controls to address bribery risks from 8391
third-party payments 85
threats 107
tips 712
training 55, 56, 68, 11011, 120
transactions 67
customs clearance for international transactions 958
risk assessment 5052
segregation of duties 99100
third-party risks 88
Transparency International CPI 467
travel see gifts and entertainment
TRUST guidelines 168
UK Bribery Act 101, 15761, 167
adequate procedures 667, 141
bribery of a foreign public official 158, 160
commercial bribery 159
facilitation payments 106
failing to prevent bribery 158, 160
gifts and entertainment 69, 7071
guidance and collective action 124, 141
guidance on risk assessment 37, 53
improper performance 159
jurisdiction 159
offering, promising or giving a bribe 157
relevant commercial organization 158
requesting or agreeing to receive a bribe 157
Ukrainian Network of Integrity and Compliance (UNIC) 1312
United Kingdom (UK) 15761
Bribery Act see UK Bribery Act
Business Integrity Initiative 143
principles-based guidance 16061
Serious Fraud Office 106
United Nations (UN)
Convention Against Corruption (UNCAC) 1445
Human Development Index 47
United Nations Office on Drugs and Crime (UNODC) 110
United States of America (USA) 1527
enforcement officials 1567
Foreign Corrupt Practices Act see Foreign Corrupt Practices Act (FCPA)
Securities and Exchange Commission (SEC) 51, 153
Sentencing Guidelines 1545
values 1522
leadership through shared values 235
see also culture
Volkov, M. 22
whistleblowing 11113
withdrawal of tender 166
work plan for risk assessment 456
World Bank 356
collective action 1267, 1278
Ease of Doing Business Index 47
Integrity Compliance Guidelines 1516, 23, 128
Integrity Vice Presidency and mentoring SMEs 14041
World Economic Forum Global Competitiveness Report 47
zero tolerance policy 24, 102, 1067