Over the past two decades, the European Union (EU) has sought to establish a coherent and effective approach to prevent the misuse of the financial system for money laundering and terrorist financing (ML/TF).[1] That approach, which began with the EU’s First Anti-Money Laundering (AML) Directive,[2] gradually expanded into an extensive regulatory framework.
DOJ Updates Guidance Regarding Its “Evaluation of Corporate Compliance Programs”
by F. Joseph Warin, Patrick Stokes, Michael Diamant, Laura Sturges, Chris Sullivan, Oleh Vretsona, Courtney Brown, Lora MacDonald, Caroline Ziser Smith, and Patricia Herold
On Monday, June 1, 2020, the U.S. Department of Justice (“DOJ”) Criminal Division issued, without fanfare, updated guidance on the “Evaluation of Corporate Compliance Programs” (the “Compliance Program Update” or “Update”), which sets out considerations for DOJ prosecutors to take into account when assessing corporate compliance programs, making charging decisions, and negotiating resolutions. Previous iterations of the document (covered in our 2017 Mid-Year FCPA Update and May 3, 2019 Client Alert) have been a valuable resource for companies as they design, maintain, and evaluate their corporate compliance programs, and the Update provides welcome insight into how DOJ’s thinking is evolving, particularly with respect to risk assessments, monitoring, and resources. Assistant Attorney General Brian Benczkowski noted that the Update “reflects additions based on [DOJ’s] own experience and important feedback from the business and compliance communities.” Continue reading
Navigating Cross-Border Data Transfers: Lessons from the Sedona Conference Commentary
New commentary from a respected think tank attempts to provide guidance on cross-border data transfers. The guidance proposes principles for determining which country’s law to apply to a cross-border transfer. Although there is no guarantee that the guidance will gain favor with courts or regulators, it is an important indicator of what the future may hold for this important and undeveloped area of law. While the commentary does not provide concrete steps to lawfully effect cross-border data transfers today, companies can infer several lessons, detailed below, from the issues highlighted in the commentary. Continue reading
Investor Advisory Committee Urges SEC to Advance Mandatory ESG Disclosures
by David M. Silk, David A. Katz, Sabastian V. Niles, and Carmen X. W. Lu
The U.S. Securities and Exchange Commission’s (SEC) Investor Advisory Committee (IAC) has recommended (PDF: 241 KB) that the SEC begin an “earnest” effort to update reporting requirements to include “material, decision-useful, ESG factors.” The IAC recommendation was high level and modest: it neither endorsed any particular disclosure framework nor made any specific prescriptions. Rather, recognizing the growing demand from investors and other market participants for standardized, comparable and reliable ESG data, and concluding that the SEC is best positioned to set a framework, the IAC recommendation calls on the SEC to begin outreach to investors, issuers and other market participants to develop “well-constructed, principles-based reporting.” The IAC reasoned that if the SEC does not take the lead with this type of disclosure, it is highly likely that U.S. issuers will be bound to follow standards imposed by other jurisdictions. Continue reading
Is Foreign Bribery Jurisdiction an Element of Economic Sovereignty? (Part III of III)
Part two of this article focused on the culmination of nearly 10 years of frustration in France with U.S. enforcement against French companies. The Gauvain Report recognized that the Blocking Statute, thought to be a counteraction to U.S. measures, failed nearly completely on its own to prevent foreign investigations in the absence of a meaningful enforcement counterweight from French authorities. This third and final part analyzes the significance of the Gauvain Report and outlines some thoughts for the future. Continue reading
Designing Corporate Leniency Programs
by Miriam Baer
Much has changed since Donald Trump was elected president in 2016, but the government’s primary method for dealing with corporate offenders remains the same: the government promises some degree of leniency in either charging or punishment in exchange for the corporate offender’s promise to improve the internal structures and systems that ensure its compliance with law.
Swedish and Estonian Regulatory Actions Against Swedbank for Anti-Money Laundering Compliance Failures
Since 2018, the Danske Bank money laundering scandal has triggered substantial repercussions across the European banking system. One of the Scandinavian banks that strongly felt those repercussions is leading Swedish bank Swedbank. In 2019, initial reports of suspected money-laundering transactions occurring between Danske Bank and Swedbank [1] led to:
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- The firing of multiple Swedbank senior executives;[2]
- An internal report that disclosed Swedbank’s Estonian operations had handled €135 billion in “high-risk, non-resident” money flows; and
- Parallel investigations of Swedbank and its Estonian subsidiary Swedbank AS by the Swedish and Estonian financial supervisory authorities (Finansinspektionen (FI) and Finantsinspektsioon, respectively), as well as separate inquiries by U.S., Swedish, and Estonian authorities.[3]
Is Foreign Bribery Jurisdiction an Element of Economic Sovereignty? (Part II of III)
Part one of this article surveyed the evolution of France’s policy perspective on the application of U.S. laws abroad and some of the reasons that led to the 2016 reform of the French anti-corruption framework. In this second part, the article discusses the context leading up to the 2019 parliamentary report and presents its recommendations.
The Sapin II law has had an effect on the articulation of U.S. and French interests in anti-bribery enforcement. Illustrative of the changes are the June 2018 parallel resolution of criminal charges with U.S. and French authorities in the Société Générale case, as well as the January 2020 achievement by Airbus of a tri-partite coordinated settlement with French, U.K. and U.S, authorities, as part of which by far the largest penalty went to France. In these respects, the Sapin II reform along with the Parquet National Financier (PNF) appears to have paved the way to restoring perceived balance in the Franco-American relationship. Continue reading
Cyber Insurance Coverage in the Remote Working World
by Una A. Dean, Michael A. Kleinman,
The recent mass shift to remote working caused by the global pandemic has provided an ideal breeding ground for both malicious cyber attacks and unintentional data security incidents. Intentional attackers have not only taken advantage of the chaos and fear associated with the pandemic but also capitalized on vulnerabilities newly created by a displaced global workforce. In addition, the use of “home offices” as an employee’s primary, rather than occasional, work environment introduces new technologies and behaviors that can lead to intentional and unintentional network compromises and data losses.
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Is Foreign Bribery Jurisdiction an Element of Economic Sovereignty? Thoughts on Recent Policy Guidance from France and the U.S.
International economic relations have long been fraught with tensions between sovereign interests and jurisdictional claims. A June 2019 parliamentary report commissioned by the Prime Minister of France epitomizes French concerns regarding U.S. extraterritorial jurisdiction and the allegedly disproportional, targeted U.S. Foreign Corrupt Practices Act (“FCPA”) enforcement actions against European companies. These enforcement actions raised suspicions that the U.S. government was merely serving American business interests and related U.S. foreign policy goals. The report has been widely seen as an important step in framing France’s response. This three-part article puts the report in historical context and outlines its significance for the future of anticorruption policy in the transatlantic region and beyond, including recent, significant coordinated resolutions of international anti-corruption investigations by U.S. and French authorities.
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