What former Dechert partner Neil Gerrard says companies need to do today to mitigate future compliance risks

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Government agencies in many countries have stepped up their efforts to prosecute fraud, antitrust and other violations in recent years – and many show no signs of stopping.

Close up of calculator, pen and financial statement.

The UK, for example, said strengthening the integrity of the financial transactions that are conducted in the country – through initiatives such as establishing a more robust response to money laundering and other economic offenses – is one of its anti-corruption priorities this year.

In the US, in an October 2021 speech, US Deputy Attorney General Lisa Monaco announced that a Corporate Crime Advisory Group would be created to assist US prosecutors in investigations – and advised companies to actively reviewing their compliance programs, warning if they did not adequately monitor for and address misconduct, it would “cost them down the line”.

Fines are just one of the potentially damaging consequences of fraud, corruption and other financial transgressions. Businesses can also suffer lasting damage to their reputation, which could threaten their ability to stay in business and be profitable.

Therefore, preparing to prevent and respond to regulatory and compliance issues has become more important than ever.

“Companies need to be at the forefront of compliance,” Neil Gerrard, a former partner at Dechert LLP, said in an interview with legal media company Lawdragon. “Freedom and reputation are so important to people, and to protect those things, you have to be steeped in white-collar practice and culture.”

The following four steps can help companies preemptively avoid regulatory and compliance breaches, and potentially reduce the financial and reputational impact of anything that might occur.

Neil Gerrard says businesses should look at local rules and requirements

Businesses may be familiar with some of the key compliance and other laws of the country in which they are headquartered; an organization operating in the United States, for example, would likely be aware that amendments to the Foreign Corrupt Practices Act of 1977 (FCPA) allowed anti-bribery provisions to apply to businesses and to foreign persons who cause a corrupt payment in the United States

However, some who also do business in the UK may be less aware that its Proceeds of Crime Act 2002 requires people working in the financial, legal, accounting or gambling industry to report any reasonable suspicion that another person is involved in money laundering at the Commonwealth National Crime Agency.

Standards may differ from country to country and laws may conflict. Businesses should fully understand the regulations and requirements of each country in which they operate – and also determine which country’s laws will be most applicable if a dispute needs to be resolved.

“These investigations now span continents, take years to solve, and involve dozens, if not hundreds, of parallel and competing strands,” Neil Gerrard told Lawdragon. “You simply cannot separate a national prosecution or investigation from what is happening elsewhere in the world.”

Former Dechert associates say companies can put strategies in place to reduce regulatory and other issues

Assessing potential vulnerabilities within an organization can help companies determine what policies to put in place to prevent fraud, embezzlement, and other compliance issues.

“It is essential that a company conducts thorough reviews of the risks in the foreign markets where it operates, so that it can fully understand local practices and customs,” Neil Gerrard told Lawdragon.

More than a quarter – 26% – of ethics and compliance managers say risk assessments are one of the top ethics and compliance activities they expect to focus on in years to come future.

Having a comprehensive and clearly defined investigation process can also help companies quickly crack down on attempted misconduct and challenge any false accusations regulators may make.

As Vincent Cohen, partner at Dechert and former acting U.S. Attorney for the District of Columbia, pointed out in an interview with Lawdragon, to be successful, corporate compliance procedures must be both well-drafted and implemented. effectively – which may include training sessions and other education and membership efforts.

“It’s not enough to have a thick corporate compliance manual if the corporate culture doesn’t reflect those compliance standards,” Cohen said.

Be ready to respond, says Neil Gerrard, who led customer “raid training” programs at Dechert

While preventative measures are essential, businesses should also have a plan in place to handle any compliance or regulatory issues that arise so they can respond quickly and mitigate their impact.

While many companies prepare, at least to some degree, to deal with crisis situations, surprisingly, according to Neil Gerrard, few of them properly plan for regulatory intervention.

“It’s an area that is often underfunded by companies,” Gerrard told Lawdragon. “It is imperative that [they] have plans to address and manage regulatory interaction.

Establishing an effective breach response plan can be difficult if a company has limited internal resources. An outside attorney may be able to help.

Neil Gerrard, for example, has been involved in efforts to help customers prepare for potential regulatory concerns.

“I was part of one of the first teams in the UK to offer training and raid management programmes, and we were one of the first groups to recognize the importance of crisis public relations and how they differ significantly from peacetime public relations,” he said. said in his interview with Lawdragon.

Other outside parties may also be able to help companies thoroughly examine the impact investigation and compliance decisions could have on their business and reputation, according to New York-based attorney David Kelley. York who co-led Dechert’s white-collar practice with Neil Gerrard.

“You should always be open to the idea of ​​bringing in an outside media consultant,” Kelley told Lawdragon. “As with any outside consultant, you need to be aware of – and structure the dynamics and dialogue in a way that gives you the best opportunity to protect – the relationship with solicitor-client privilege.”

Work with a legal services provider that has “international reach,” says Neil Gerrard

Regulatory and compliance cases can be complex matters; they require a nuanced legal approach.

Working with highly qualified attorneys who can offer pre-emptive advice on areas of concern to watch out for and potentially beneficial practices to adopt – as well as stellar legal representation, should the company face charges – is crucial.

As Neil Gerrard told Lawdragon, businesses should look for a law firm that employs attorneys located in many locations with varying backgrounds and expertise. Dechert, for example, uses a pool of attorneys located in cities ranging from Washington, DC, to Paris, London and Hong Kong when staffing.

“When customers have issues in multiple countries, that’s where Dechert can really add value,” Gerrard said. “We have lawyers on the ground in the United States, Europe and Asia, and in all these offices, the team is multicultural and multilingual. Few companies have this scale. We can choose the right people, depending on their level and type of experience, language skills and qualifications. »

Dechert also has an extensive network of attorneys around the world that the firm can partner with to meet client needs.

“One of our hallmarks is our ability to work with advisors in countries where we don’t have an office, so we can manage the entire process for our client and deliver a unique deal,” Gerrard said. at Lawdragon. “It can take years to build relationships with top firms and top lawyers in dozens of places – but that’s one of the benefits of being in this business for so many decades.”

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