Is it Time to Refresh Your Anti-Bribery and Corruption Program?

Combatting bribery and corruption continues to be of heightened focus on both the domestic and international stages. Organizations can leverage guidance provided by government and non-government entities, as further outlined below, to develop a risk-based anti-bribery and corruption (ABC) program that simultaneously protects them from potential incidents and is defensible during an investigation.

Domestic Focus on Tackling Corruption

In the U.S., as detailed in our July 2021 client alert, the White House established combatting corruption as a core U.S. priority in a National Security Study Memorandum. In March 2023, the White House issued a briefing on actions taken within each of the five strategic pillars outlined in the initial memorandum¹.  These actions reinforce the White House’s commitment to combatting corruption through domestic inter-agency cooperation, as well as expanded efforts on the international stage, and includes efforts such as increased interagency cooperation, promulgation of regulation, and bolstering of diplomacy efforts, among other initiatives.   

Notably for organizations and those responsible for implementing compliance programs, Pillar Three: Holding Corrupt Actors Accountable contains enforcements in which the U.S. government has taken action to hold both individuals and corporations accountable for corruption. Per the briefing:

“Justice Department, federal law enforcement, Securities and Exchange Commission, and Commodity Futures Trading Commission enforcement actions involving international bribery resulted in guilty pleas by multinationals or subsidiaries, penalties and forfeitures of over a billion dollars, and imposition of compliance monitors. Other notable convictions in foreign corruption and money laundering cases included a former Goldman Sachs officer in a multibillion-dollar scheme, and a former Venezuelan national treasurer and her husband in a billion-dollar scheme. The Justice Department repatriated to Nigeria $20 million of forfeited corruption funds and initiated other civil actions to recover foreign kleptocracy proceeds.”

Further, two of the White House’s initiatives are tools focused on holding corrupt Russian actors accountable: the Task Force KleptoCapture and the Russian Elites, Proxies, and Oligarchs Task Force. Organizations should incorporate this focus into a risk-based compliance program. 

Also notable are the specific references to the Department of Justice (DOJ) Strategic Plan, a document that outlines various objectives to support the DOJ’s mission to uphold the rule of law, which are divided into five strategic goals. The Strategic Plan details combatting corruption as key to “Goal 4: Ensure Economic Opportunity and Fairness for All.”²

In March 2023, the DOJ released guidance on factors prosecutors consider when evaluating a compliance program in the course of an investigation³. If you discover suspected bribery or corruption by your employees or agents, having an effective compliance program in place will better position your organization to respond to and cooperate with an investigation.

International Efforts to Combat Corruption

On the international stage, the UK’s guidance on complying with the UK Bribery Act 2010 and developing a strong ABC program  remains a key reference used globally for ABC programs⁴ and ABC risk assessments.  More recently, on April 17, 2023, the Wolfsberg Group⁵ published its highly anticipated update to the “Anti-Bribery and Corruption Compliance Programme Guidance”⁶ document, which aims to assist financial institutions (FIs) with their prevention, detection, and reporting efforts. By updating its 2017 guidance⁷, the group has accounted for a number of recent changes and trends within the ABC legal and regulatory environment, as further outlined below.

Wolfsberg 2023 Updates from 2017 Guidance:

1. Broader Definition of Corruption — While the 2017 Guidance “specifically focused on corruption in the form of bribery,” the 2023 Guidance defines bribery and separately references broader definitions of corruption published by World Bank Group and Transparency International, which focus on the “abuse of entrusted power for improper personal advantage.” In doing so, Wolfsberg Group highlights that corruption risks and offenses are not limited to acts of bribery.
   
   
2. Focus on Risk Assessments — The 2023 Guidance includes multiple updates concerning proposed ABC Risk Assessments, particularly as it pertains to their frequency and the involvement of senior management. For example, the 2023 Guidance recommends leveraging ABC Risk Assessments to conduct periodic assessments of emerging risk. For example, “new or evolving risk that may, at the outset, be difficult to assess fully, but has a reasonably high potential to manifest into significant concerns.” Risk assessments can also encourage more active senior management oversight and monitoring.
   
   
3. Continuous Improvement — Throughout multiple sections of the 2023 Guidance, Wolfsberg Group stresses the need to integrate all pillars of an ABC program. An effective feedback loop reduces future risk by encouraging continuous improvement, enhancing awareness of ABC roles and responsibilities, and strengthening internal controls. The 2023 Guidance specifically recommends that firms “establish a framework and requirements for timely identification, analysis, reporting, tracking, and sharing of lessons learned.”
   
   

For example, the Wolfsberg Group recommends an investigation into alleged bribery and corruption “should include timely root-cause analysis to remediate any control weaknesses and ensure continuous improvement.” The lessons learned should be integrated into ABC policies and procedures, as well as disseminated to business and internal control functions. Similarly, the 2023 guidance notes that assessments of adverse material events, whether driven by internal issues or external actions pertinent to a company’s industry, should help inform improvements to an ABC program. An enforcement action against a firm’s industry peer may result in the need to update one’s own ABC Training or ABC Risk Assessment to better understand and address ABC risks pertaining to the industry at large.

Bringing It All Together: What This Means for Designing an ABC Compliance Program

The DOJ guidance is geared toward a broad audience and spectrum of compliance obligations and is written to provide higher-level standards for determining a “well-designed” program to assess whether an organization is making good-faith efforts to comply with relevant laws and regulations. The Wolfsberg guidance, which is specifically geared toward FIs’ ABC efforts, provides greater specificity in areas such as intermediary risk and customer-related transaction risk. It clarifies what constitutes “anything of value,” which can help institutions identify and define ABC risks. Risks related to FIs that provide financing for projects or investments, mergers and acquisitions, are particularly relevant and important to consider.The Wolfsberg guidance, in conjunction with other regulatory guidance and local laws and regulations, can help serve as a roadmap for developing a robust compliance program to both protect your institution from exposure, and to develop protocols that guide employees on what to do in the event of an incident.

The foundational elements of domestic and international guidance are largely the same. DOJ guidance contains many elements to consider if a compliance program is “well-designed” that align with the Wolfsberg ABC guidance. The chart below summarizes topics where the DOJ and Wolfberg guidance are aligned and outlines areas where each of the authorities goes into greater detail or contains more specific guidance on key topics.
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Co-authors: Kristin Wenske and Klaas Hinderdael.

^{1 The White House, “Fact Sheet: Implementing the United States Strategy on Countering Corruption: Accomplishments and Renewed Commitment in the Year of Action,” March 29, 2023,
FACT SHEET: Implementing the United States Strategy on Countering Corruption: Accomplishments and Renewed Commitment in the Year of Action | The White House.
2 U.S. Department of Justice, “FYs 2022-2026 Strategic Plan,”
https://www.justice.gov/doj/book/file/1516901/download#:~:text=This%20Strategic%20Plan%20sets%20out,fairness%20that%20define%20this%20nation
3 “U.S. Department of Justice, Criminal Division, Evaluation of Corporate Compliance Programs (Updated March 2023).” https://www.justice.gov/criminal-fraud/page/file/937501/download.
4 Bribery Act Guidance,https://www.sfo.gov.uk/publications/guidance-policy-and-protocols/bribery-act-guidance/
5 The Wolfsberg Group operates as an association of 13 global banks.
6 https://www.wolfsberg-principles.com/sites/default/files/wb/Wolfsberg ABC Guidance 2023.pdf
7 https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/3. Wolfsberg-Group-ABC-Guidance-June-2017.pdf}