Compliance convergence can have several variations. I
have written about the convergence from export controls to anti-corruption
controls. Last week I wrote about the Lacey Act, which regulates imports of
certain types of wood, among other items. One of the valuable lessons of
compliance convergence can be the cross-over of lessons learned from one area
of compliance to another. I was reminded of this when reading an article in the
September issue of the ACC Docket, entitled "Import Loopholes Avoiding the
Customs Audit" by Tiffany Jones. Her article discusses the "Importer-Self
Assessment" (ISA) program initiated by the US Customs and Border Protection
(CPB). The ISA has a requirement for a company to perform a "self-assessment"
which means auditing, reporting results and correcting mistakes and
implementing process improvements. This ISA relates to imports but it can be
very useful for the Foreign Corrupt Practices Act (FCPA) compliance
The CPB looks at five criteria to evaluate whether a
company is ISA-ready. These will be familiar to the compliance professional.
The terminology is a bit different but the concepts are recognizable. These
five criteria lay out a good way for a FCPA compliance practitioner to think
through an assessment of a company's FCPA, Bribery Act or other anti-corruption
and anti-bribery program.
Under this criteria, a candidate must demonstrate its
commitment to compliance at the highest levels of the organization. Can you say
'Tone at the Top'? But more than simply the right words, a company must
demonstrate this criteria by actually doing. Therefore, this will include
written policies, training for key import personnel and company-wide cross
At least annually, a company should perform a risk
assessment to determine which areas of import compliance are the most subject
to error or non-compliance. In addition to assessing traditional high risk
areas, a company should consider risk which may "flow from changes in personnel
or changes in internal controls." Additionally both transactions and internal
controls should be reviewed.
This criteria is defined as the creation of procedures to
ensure that the senior management directives as specified in Criteria I -
Control Environment are carried out. While Criteria I speaks to overall
policies, Criteria III focuses on the procedures to implement the policies.
Information and Communication
This criteria has two components. First, company
personnel are charged with keeping themselves informed of changes to trade
regulations and how any changes might effect a company's operations. Second,
this information must be communicated and disseminated throughout the company
to all "departments touching on the trade function." The author quotes from the
ISA Handbook, "Pertinent information related to CPB activities is identified,
captured and distributed to the right people in sufficient detail, in the right
form and at the appropriate time to enable them to carry out their
duties..." I could not have said it better myself.
There are many aspects to compliance convergence. Many
practitioners view it as requiring many different types of compliance. This is
certainly a valid view. However it can also be used as an opportunity to bring
in compliance expertise that may already exist in your company to assist in an
anti-corruption compliance program. This Border and Customs Protection format
for self-assessment is a guideline that the FCPA practitioner can use as a
basis self-assess a company's compliance program. If you are implementing an
anti-corruption program or looking at an anti-bribery program required under
the UK Bribery Act there may be resources which you can tap into which exist
within your company.
They're Back!!!!!! Howard Sklar and I discuss all things
FCPA and compliance (well mostly all things) on the return of This
Week in FCPA, Episode 16. See
and hear Howard go on several rants as we discuss Haiti Teleco, denial of the
ICE Mandamus Petition, Oracle's announcement of a FCPA investigation and the
post-trial filings in the Lindsey Mfg. case.
On Thursday, Sept. 15, my colleague Mary Jones and I will
discuss how a Best Practices compliance program can
assist you in a FCPA compliance investigation, in a webinar hosted by
World-Check and Ethisphere. Mary will discuss her experiences at Global Industries
in a multi-year, world-wide FCPA investigation and how Global Industries came
out with a Non-Prosecution Agreement. For registration and information,
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.
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© Thomas R. Fox, 2011
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