Anti-Bribery Compliance Gets Global Standard.
An international standards body last week issued the first-ever global standard for anti-bribery compliance programs, which experts said would provide companies with leverage when dealing with partners in high-risk countries. Known as ISO 37001, the standard, issued October 14 by the International Standards Organization, largely mirrors the components of anti-bribery guidance from U.S. authorities, experts say. However, these experts said, global companies operating in countries with lower standards will now have to catch up. The standard will be heralded as a significant step in the continued globalization of anti-corruption compliance, especially in graft-prone countries, wrote Fernando Cevallos and Brian Mich, compliance experts from the consultancy Control Risks, on the FCPA Blog. “Companies can now employ a tool that raises both the bar for compliance activities and the awareness of the risk of corruption,” they wrote.
The standard, according to the ISO, specifies requirements for policies and procedures, tone from the top, oversight by a compliance manager, training, risk assessments, financial controls and reporting. Neill Stansbury, chair of the committee responsible for the new standard, said in a statement that it was developed to ensure flexible use by organizations of all sizes, wherever they do business. “The bribery risk facing an organization varies according to factors such as the size of the organization, the countries and sectors in which the organization operates, and the nature, scale and complexity of the organization’s operations,” he said. “Therefore, ISO 37001 specifies the implementation by the organization of reasonable and proportionate policies, procedures and controls.”
The standard includes a provision that allows third parties to issue a certification that says a company’s anti-corruption compliance program conforms to the standard. Bert Lacativo, a partner at RGL Forensics, a forensic accounting firm, noted in an email that companies could use the certification “as a lever of additional comfort” regarding the activities of their foreign partners, a potentially significant risk area. “While appropriate due diligence, monitoring and anti-bribery contractual clauses are all requirements that won’t ever go away, U.S. companies may require that their foreign partners begin moving toward, and eventually obtain, 37001 certification to conduct business with them. This could prove especially valuable in territories with high corruption risk and limited local enforcement,” said Mr. Lacativo. However, for major U.S. companies that already have anti-bribery compliance programs, one expert said the standard “won’t be a big deal. The changes track current best practices,” said David Simon, a partner at the law firm Foley & Lardner LLP who is an anti-bribery specialist. “It’s the same stuff we’ve seen for forever…just in a more systematic way,” he said.
Credit: Samuel Rubenfeld The Wall Street Journal 21 October 2016