Conducting cross-border business comes with both the potential for higher rewards and risk. Open the business section of any major news outlet and you’re likely to find stories about shady deals with foreign officials, suspect bidding processes or ousted CEOs. In short, corruption scandals are all too common and, with the stakes so high, companies can’t afford to be ill-prepared when it comes to anti-corruption law compliance.
In the Oil & Gas Financial Journal¸ our U.S. partner firm—GlassRatner—addresses the latest corruption scandal involving Brazilian electric utilities giant, Eletrobras, and how companies can minimize risk and prepare themselves so they are compliant.
If you think corruption and fraud doesn’t affect Canadian companies, think again. With continued globalization, many Canadian companies are either establishing operations overseas or outsourcing parts of their business to third-parties who may not play by the same rules as we do in Canada. According to a recent Globe & Mail article, there were, as of October 2016, ten active investigations, four convictions and four cases in which charges were laid but not yet resolved, under Canada’s Corruption of Foreign Public Officials Act (CFPOA).
That being said, are you a Canadian-based company with cross-border operations? If so, you should not only be familiar with Canada’s anti-corruption legislation, CFPOA, but also other key Canadian legislation, such as the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), as well as the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act, and legislation from any countries where you operate.
Does your company have a Risk Management Framework and Program (including both Anti-Fraud and Anti-Corruption) in place? If yes, could it be improved? If the answer is no, you could be potentially, and unknowingly, putting your organization, employees and investors at risk. If you feel you are at risk and need some help, here are some initial steps you can take:
- Determine the ethical attitude of organizations leadership
- Review key legislation to ensure compliance (CFPOA, FCPA etc.)
- Review existing anti-fraud and anti-corruption policies and procedures
- Enhance or create a robust compliance program, procedures and policies to address the
organizations identified risks
- Develop a Code of Conduct along with internal policies and controls
- Provide compliance and ethics training to all employees
If you have any further compliance questions, you can contact us below. Not only can we leverage the strength of our partner firms in the U.S., but our global network of firms extends to other countries around the world.
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Jonathan Cooperman is a Partner Emeritus at Farber and is the Leader of the Fraud, Forensics & Asset Recovery and Litigation Support practice. His practice focuses on fraud investigations, forensic accounting, and asset recovery, particularly in uncovering and recovering assets for victims of fraud around the world. Jonathan can be reached at 416.496.3702 and firstname.lastname@example.org.
Allan Nackan is a Partner at Farber and co-leads the firm’s Restructuring practice. His practice focuses on corporate insolvency and restructuring, financial advisory services, cross-border restructuring, fraud investigations and forensic accounting. Allan can be reached at 416.496.3732 and email@example.com.