Gemma Aiolfi

 

The Wolfsberg Group, an association of thirteen global banks working together since 2000 to develop financial industry guidance on financial crime risks, has recently updated its 2011 Anti-Bribery and Corruption GuidanceThe updated Guidance has been developed in collaboration with the Basel Institute on Governance with the objective of establishing and explaining best practices for financial institutions to consider in the development, implementation and assessment of an Anti-Bribery and Corruption Compliance Programme.

The update has been made in light of a number of recent developments including: anti-bribery enforcement actions with respect to both companies and individuals, legislative developments in multiple jurisdictions, updates to key guidance documents issued by national and international agencies on effective compliance, the increasing emphasis on ethical standards in combination with compliance, and ongoing exchanges between Wolfsberg Group member companies regarding their respective internal compliance programmes.

The Guidance has evolved since it was first issued as a ‘Statement’ in 2007.  First, in that same year, the Wolfsberg Group developed the Statement into a Guidance document, the main purpose of which was to help financial institutions differentiate between the internal measures that financial institutions may implement to prevent corruption on the one hand, and to address the potential misuse by clients of financial institutions for corrupt activity on the other. An update in 2011 addressed these two aspects once more, but with more details around the internal anti-corruption framework. This focus on internal ABC Compliance Programmes remains the focus of the revisions in this latest revision, though it also refers to the risks of financial institutions being misused by customers to facilitate financial transactions involving improper payments.

Some of the main material changes to the new version of the Guidance include:

·       Definition of government/public officials

·       Definition of intermediaries and associated controls

·       Risk management of Principal Investments and Joint Ventures

·       Offers of employment and work experience

·       Reduction of focus on customer-related anti money laundering provisions

Conclusion

The updated Guidance with its increased level of detail on key areas that have been in the spotlight of law enforcement recently, and which are largely derived from the members’ internal programmes, suggests that the Wolfsberg Group members continue to have bribery and corruption high on their risk radars. The Guidance also reflects a degree of flexibility and the influence of the Risk Based Approach in developing a suitable programme when it recognizes that financial institutions may have differing approaches to ABC controls, and uses ‘should’ rather than ‘must’, in the relevant sections. The new Guidance will provide food for thought for some financial institutions when reviewing their existing programmes and hopefully also a sound reference tool for those businesses that are still developing their ABC programmes. For the latter group, the previous version of the Guidance may still have useful elements - particularly in relation to the misuse of the financial institution being misused by a customer. The Wolfsberg Group might wish to consider retaining the 2011 version on their website for this purpose.

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