Most compliance practitioners have heard the term "Red
Flags." Red Flags are generally defined as circumstances which could
place a reasonable person on notice that illegal or improper conduct has or may
occur. A Red Flags does not mean that an action or transaction should
immediately be terminated. It does mean that you should engage in an
appropriate level of additional due diligence and investigation before moving
In his blog posting yesterday entitled "On
Anti-Money Laundering", our colleague Howard Sklar,
discussed a new anti-money laundering initiative from the Asset Forfeiture
and Money Laundering Section of the Department of Justice. Howard has
previously spoken of "compliance convergence" or the merging of control
programs such as anti-bribery and anti-corruption with anti-money laundering.
Inspired by Howard's post and his use of "compliance convergence" this post
will list some possible Red Flags that you should consider in three control
areas: anti-bribery and and anti-corruption; anti-money laundering and with a
nod towards the ever changing economic sanctions being levied against Libya,
Red Flags regarding international economic sanctions.
I. Anti-Bribery and Anti-Money Laundering
III. International Economic
As no one list of Red Flags can be exhaustive or final,
you may wish to add Red Flags more specific to the risks appropriate to your
company, such as those based upon the industry in which you conduct business,
the locations where your company does business or other risk factor. If there
are any additional ones you feel our readers should be aware of please list
them in the Comments Section.
Visit the FCPA Compliance and Ethics Blog,
hosted by Thomas Fox, for more commentary on FCPA compliance, indemnities and
other forms of risk management for a worldwide energy practice, tax issues
faced by multi-national US companies, insurance coverage issues and protection
of trade secrets.
This publication contains general information
only and is based on the experiences and research of the author. The author is
not, by means of this publication, rendering business, legal advice, or other
professional advice or services. This publication is not a substitute for such
legal advice or services, nor should it be used as a basis for any decision or
action that may affect your business. Before making any decision or taking any
action that may affect your business, you should consult a qualified legal
advisor. The author, his affiliates, and related entities shall not be
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© Thomas R. Fox, 2011
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