DOJ: Deputy Attorney General Lisa Monaco Delivers Remarks at American Bar Association National Institute of White Collar Crime Front lines. On March 2, Deputy Attorney General Lisa Monaco discussed DOJ efforts to promote a culture of corporate compliance. Monaco acknowledged that in this “uncertain geopolitical environment, corporate crime and national security are overlapping to a degree never seen before.” She emphasized that companies are on the “front lines of today’s geopolitical and national security challenges.” Monaco described strengthening corporate compliance through the promotion of voluntary self-disclosure and structuring compensation and claw-back programs in such a way that shift “the burden of corporate malfeasance away from uninvolved shareholders onto those more directly responsible.” She also announced a pilot program whereby every corporate resolution requires the offending company to implement “compliance- promoting criteria within its compensation and bonus system.” The pilot program would also allow the Criminal Division to reduce fines for companies that attempt to claw back compensation from individual wrongdoers. In addition, if the company successfully recovers the money, it may keep it.
The full remarks can be found here.
Notably. This pilot program is likely to become permanent even if changes are made to the program before it is officially implemented. Companies should update compliance programs to reflect the pilot program and the concept of clawing back compensation – while also recognizing the effective compliance efforts of individual personnel. Departments of Justice, Commerce and Treasury Issue Joint Compliance Note on Russia-Re- lated Sanctions Evasion and Export Controls Joint Action. On March 2, DOJ, BIS, and OFAC released their first joint, “tri-seal,” compliance note relating to the risks associated with third-party intermediaries and transshipment points. The note highlights how Russia and its proxies use third-party intermediaries and transshipment countries to circumvent sanctions and U.S. export control laws. The note also lists common red flags that could indicate a third party is engaged in sanctions evasion, including:
The use of corporate vehicles to obscure ownership, the source of funds, or the countries involved.
A reluctance to share information or complete an end-user form.
The use of shell companies for international wire transfers, last-second changes to delivery addresses, and the use of personal email accounts rather than a corporate address.
The lack of an organizational web presence.
Routing purchases through established transshipment points like China (Hong Kong and Macau), Armenia, Turkey, and Uzbekistan.
The three agencies will continue to “inform the private sector about enforcement trends and provide guidance to the business community on compliance with U.S. sanctions and export laws.”
The Joint Compliance Note can be found here.
Notably. While DOJ, BIS, and OFAC have repeatedly shown a willingness to hold offending companies and individuals accountable for violations of U.S. export laws, this type of notice serves to equip companies with guidance on preventing violations from occurring altogether.
7 International Trade Enforcement Roundup |
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