Due Diligence and Compliance: Breakdown and Importance

DUE DILIGENCE VS COMPLIANCE

Due diligence is a vital part of tackling anti-bribery & corruption in the workplace. The Corporate Financial Institute has defined it as a process of verification, investigation, or audit of a potential deal or investment opportunity to confirm all relevant facts and financial information. Similarly, compliance means what it does in the word’s consensus: to follow the rules. IONOS further elaborates the phrase’s meaning in a business environment as conforming to the laws, regulations, rules, and policies is the part of business operations often referred to as “corporate compliance.” Due diligence and compliance aid in combating the issue of anti-bribery & corruption in the workplace.

When Should these Duties be Fulfilled?

Due diligence and compliance start before an employee, vendor or supplier is even introduced to the business. They are implemented to reduce risks in professional relationships and satisfy the legalities of running a business; they are also beneficial to the purchaser and the vendor.

Due diligence provides purchasers with all the correct and accurate information to help them make an informative decision to acquire a property, good or service. This is based on the data found about the company. The information ranges from the company’s existing customer base and partner relationships to the areas in which they display irregularities – in the same vein, compliance ensures a set standard for the delivery of the good, service or process.

Vendors find due diligence providing business owners with the financial integrity of their business. It facilitates unearthing the fair market value of their company. A compliance audit on a vendor conducted by the buyers or their agents will validate and strengthen the professional relationship between the two entities.

Key Differences

Compliance is reactive and a legal obligation made mandatory by a government or a regulatory agency. On the other hand, due diligence is proactive and is unmandated, though many organizations like to implement due diligence as a part of their guidelines and procedures. Due diligence is a measure of best practice from industries ranging from Pharmaceutical & Healthcare to Oil, Gas & Energy.

Compliance is tactical, whilst due diligence is strategic. The end goal with compliance is short term but frequent; complete what is necessary for the required period. Alternatively, due diligence screens all information and evaluates it against your company’s objectives. It considers the pros and cons of the decision to help you shift towards a judgment or action.

A checklist drives compliance orientated views and searches for specific items. It checks them off a list, while due diligence creates a full profile searching for previous occurrences, factors leading up to the occasion, and actions taken after the incident.

Case Studies

One of the most infamous examples of this was in 1994 with BMW’s decision to acquire Rover. The decision was made when Rover’s owner, British Aerospace, was facing trying times. BMW had plentiful goals, including engendering trade and diversifying products with the brands’ icons such as the Mini and the Land Rover. However, the ten-day deal lacked due diligence and compliance, leading to a £790 million loss.

BMW overlooked financial data concerns as well as inaccurate sales data. BMW also failed to comply with Rover’s learning culture. They also failed to accept other manufacturing approaches. To top it all off, the frequent disputes between BMW’s directors resulted in poor leadership after the acquisition, followed by mass resignations. Had the company performed their duties to the highest capability, it could have avoided such a costly mistake.

2012 saw HP pay the price of $11.1 billion due to their failure to do accurate data checks concerning income statements, cash flow, balance sheets and footnotes, ultimately halting their plans to move from producing hardware to producing software and resulting in a $5 billion loss.

Our hand in making a difference

Due diligence and compliance are not the same. The consideration of the two components helps finalize a decision, but the difference between them lies within your reasons for investigating and what the end goal is. CRI® highlights the important distinction using Due Diligence DD360°™ and ISO 37301:2021. Why not download our free Due Diligence 360 brochure to find out more?

DUE DILIGENCE 360 BROCHURE

CRI Group’s compliance and due diligence solutions are tailored with your organization’s needs in mind. This is to keep you one step ahead of regulatory requirements. Our Due diligence DD360°™ services run specialized intelligence used by global financial institutions and multinational corporations. Complete compliance with anti-money laundering (AML) regulations and legislation is guaranteed. Manage your third-party risks confidently with customized 3PRM™ solutions for your organization or get certified.

Why wait?

Get a Free Quote Today 

Who is CRI Group™?

Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider.

We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group™ launched the Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301:2021 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification.

ABAC™ operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. Contact ABAC™ for more on ISO Certification and training.

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Fraud Prevention Strategy: Build One in Five Simple Steps

Fraud Prevention Strategy: The 5 Simple Steps

A fraud prevention strategy is one of the key policies that can aid an organization in safeguarding itself against reprimands of the matter. One of the greatest encounters a fraud auditor can confront is the mission of persuading management that the peril of fraud exists across all aspects of corporate culture – regardless of whether it is from internal factors or external factors. Fraud cannot ever be eradicated from the corporation as collusion is adept in continually conquering routine organizational regulations.

What is the strategy?

The objective of a Fraud Prevention Strategy is to identify a high-level proposal on how an organization should implement its fraud prevention policy in the presence of its internal and external influences. The strategy forms the most important part of the fraud deterrence strategy; thus, the policy an organization chooses to implement must be straightforward and pragmatic.

Combating fraud requires a distinct and refreshing methodology that entails including all three facets of the fraud cycle:

• Fraud deterrence and prevention
• Fraud detection
• Fraud investigation

Preferably, with the fraud cycle in mind, every enterprise ought to put together a distinctly specified fraud prevention strategy that integrates the following:

• Determine the proper culture with the proposed policy: having protocols and policies in place for dealing with fraud will help you establish a good grounding for identifying it.
• Counteract and detect: To detect fraud, you need to have effective systems and processes in place covering all aspects of your business.
• Investigation of any occurrences in which fraud occurs.
• Review and monitor policies and occasions in which fraud has transpired regularly to ensure that fraud levels stay below the goal amount.
• Learn from previous occurrences and update training procedures.
• Risk management covers all types of risk, from corporate and social responsibility compliance to performance measurement. 

To learn more about third-party risk management, why not check out our 3PRM brochure.

What should be established in a fraud prevention strategy:

1. Whistleblowing policy

Whistleblowing is the act of exposing information about misconduct in the workplace and is a crucial element in any prevention strategy. When whistle-blower hotlines are implemented and sustained correctly, they can substantially decrease an organization’s exposure to fraud by permitting for prior detection and thus savings in the form of reduced fraud losses from the prior detection.

2. Identify the risks:

The risk of fraud is not solely based on an employee’s background but also a myriad of other factors. Most notably, it is important to be able to identify risks by nature of items (some examples include size and value, ease of resale and cash), nature of the control environment (including separation of duties, safeguards, complexity, turnover and related party transactions) and pressures ( i.e., level of dissatisfaction – if the workforce is unhappy with the company, they will be more inclined to engage in fraud, expectations and guarantees). Identifying these risks is the first step in figuring out how to counteract them, thus preventing fraud.

3. Implement effective controls:

When it comes to implementation, organizations need to ensure that they complete the action plan and then refer it to an appropriate person – in most instances. This is from HR and other figures in leadership to management of employees. It is then up to the subordinates to assist them with implementing the strategy, reviewing the strategy, or delegating it to the employees.

Most policies implement:

• Making employees aware of emergency procedures
• Making employees aware of the location of first aid stations
• Educating employees on the location and obvious danger and workplace hazards
• Examine health and safety workplace responsibilities; wear the necessary protective clothing or equipment, participate and have input to management report incidents or mishaps as considered essential by management.

4. Increase awareness of the risks:

It must not be presumed that staff members have an innate perception of the risks of fraud or that they have any understanding of the scope of risks that encircle them. This means that it is incredibly important to stimulate a risk-conscious culture within an organization.

Some examples of methods to increase such awareness include:

• Performing risk audits and engaging as many individuals as possible in the organization in the risk auditing procedure
• Benchmarking – studying “best practices” from other organizations that have executed risk management.
• Sending organization personnel to attend industry seminars on fraud prevention as well as risk management

5. Plan for the worst:

It might sound pessimistic, but it is always best to prepare yourself and your employees for the worst-case scenario. Unfortunately, as hard as we try to minimize fraud, it cannot, be fully eradicated. If it appears too good to be true, it most likely is. It is good practice to meticulously probe all agreements, prospects, transactions, data and documents.

Want to know more about recruiting the right people for your organization? Visit our page on Background Screening services or view our EmploySmart brochure.

Crucial components that a proper fraud prevention strategy accomplishes:

It is easy to infer that fraud can leak into all aspects of corporate culture and can destroy an organization from within. Despite this issue, several organizations opt not to implement a fraud prevention strategy – it is primarily implied that this is ascribed to the absence of knowledge circulating on the benefits of such a strategy. However, the rewards reaped from this type of policy is beneficial to corporations eventually and can reap the rewards such as:

• Lower consequential loss pertaining to fraud
• Lesser/no legal and investigative costs relating to fraud
• Lesser/no regulatory fines paid in the occurrence of fraud
• Better time management can be used to enrich employees’ knowledge and experience at the organization.
• Reduced insurance premiums
• Lower turnover of key staff and customers
• The lessened cost of/capability to increase new finance

Overall, the process of preventing fraud can be an extensive one, but one whose benefits outweigh the onerous course. Protect your organization from liability, business interruption and brand damage by partnering with the CRI® Group. Our 3PRM solution address various specific areas, including:

• Third-Party Integrity Due Diligence & Screening: ensures global compliance, provides adequate monitoring & protection against potential litigation;
• 3PRM Enhanced Background Checks: uncovers derogatory information within the public & private record resources through risk-based background checks, including investigative research into suppliers & individuals, ultimate-beneficial owners;
• ISO 37001 Anti-Bribery Management System: CRI® Group’s independent and accredited Certification Body can examine your Anti-Bribery & Anti-Corruption procedures & issue an accredited Certification; and
• ISO 37301 Compliance Management System: CRI® Group’s independent certification body helps companies worldwide to increase & measure their efforts against regulatory compliance risks.

If you still have any questions surrounding fraud prevention, why not contact CRI®? Our experts have years of experience and have been trained to provide your business with bespoke advice that fits your organizations’ needs.

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Don’t hesitate to prevent fraud in your workplace today.

About us…

Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS102000:2013 and BS7858:2019 Certifications is an HRO certified provider and partner with Oracle.

In 2016, CRI Group™ launched the Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC™ operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organizations. Contact ABAC™ for more on ISO Certification and training.

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Time to get ISO 37001:2016 Certified – The Process, Part 2

Shifting a light on anti-Bribery and anti-corruption methods, our sister brand ABAC™ Centre of Excellence tells us how key is ISO 37001:2016 Anti-Bribery Management System Certification is for public, private, and non-profit organisations across the globe and explains the process behind certification. At CRI™, we believe it is important as it provides a key layer against threats of bribery, corruption, fraud and other security concerns. It also sets an organisation apart from its peers as a model for ethical behaviour and compliance.

In a recent guest blog, ABAC™ Centre of Excellence discussed the first part of getting ISO 37001:2016 certified. ABAC™ covered the initial engagement and the first four steps, including the audit confirmation, pre-assessment, and stage one and two audit processes. Today our sister brand ABAC™ will discuss the rest of the certification process and the path to getting your organisation better protected and fully compliant in addition to CRI Group’s corporate due diligence services.

Step 5: Follow up Audit (optional)

If a major non-conformity is raised or remains outstanding from Stage 1, an additional visit will need to be booked. For major non-conformity raised during Stage 2, a revisit will be required within 30 days of submitting the CAP to confirm the implementation of an effective CAP.

Step 6: Awarding of Certificate

If the organisation is compliant with the standard conditions, a recommendation for certification will be made.

• For minor non-conformities: This will not delay the certificate if an organisation has a CAP. The certificate is granted within 04 weeks from the time of CAP submission.
• For major non-conformities, the organisation must submit and implement CAP within 180 days maximum. Once the auditor has verified the CAP, the certificate is granted within six weeks (from the time of CAP submission by the Client). However, all major non-conformities will need to be addressed before a certificate can be published.

Step 7: Continual improvement and surveillance audits

Surveillance is planned over three years and will ensure that the organisation complies with the standard.

Step 8: Re-certification Audit

The registration period is three years from the date on the certificate. After the initial registration period, renewing your Anti-Bribery Management System Certification is relatively seamless. Once the second surveillance visit has been completed, you will be sent a registration renewal/re-certification proposal detailing the process and associated costs and assessment days for the next three years. A re-certification audit will require Stage 1 and Stage 2 audit. The depth of the audit and time required would be determined as per your performance (during the certification period) and any planned changes to your system. It’s that easy. Now is the time to move forward with ISO 37001:2016 certification.

What comes next? 

For assistance in developing and implementing an Anti-Bribery Management System, go to www.abacgroup.com, contact ABAC™. today or get a FREE QUOTE!

In 2016, CRI Group™ launched Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence – an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including ISO 31000:2018 Risk Management- Guidelines, ISO 37000:2021 Governance of Organisations, ISO 37002:2021 Whistleblowing Management System, ISO 37301:2021 (formerly ISO 19600) Compliance Management system, Anti-Money Laundering (AML) and ISO 37001:2016 Anti-Bribery Management Systems. 

Who is CRI Group™?

Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

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Time to get ISO 37001 Certified – The Process, Part 1

Shifting a light on anti-Bribery and anti-corruption methods, our sister brand ABAC™ Centre of Excellence tells us how key is ISO 37001:2016 Anti-Bribery Management System Certification is for public, private, and non-profit organisations across the globe and explains the process behind certification. At CRI®, we believe it is important as it provides a key layer against threats of bribery, corruption, fraud and other security concerns. It also sets an organisation apart from its peers as a model for ethical behaviour and compliance. After all, consider the benefits: Certification adds a distinct level of credibility to the organisation’s management systems and ensures that the organisation implements a viable anti-bribery management program utilising widely accepted controls and systems.

It assures management, investors, business associates, personnel and other stakeholders that the organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption. ISO 37001:2016 certification also protects the organisation, its assets, shareholders and directors from the effects of bribery. But what, exactly, is the process for getting ISO 37001:2016 certified by ABAC Group™? Once your organisation has submitted questionnaire information and completed the approval and contract stage, the certification cycle is ready to begin.

Step 1: Audit confirmation

An audit plan will be developed with your organisation and confirmed to the Certification’s Body Assessment Team at least three months before the organisation’s first audit.

Step 2: Pre-assessment audit (optional)

The organisation can opt to perform a pre-assessment audit to identify any possible gaps between its current management system and the standard requirements. This audit is optional and helps the organisation check its preparedness for the stage 1 and 2 assessments by identifying any major non-conformities that have not been addressed.

Step 3: Stage 1 audit

Review the results of the audit, including:

• General observations
• Non-conformities (major or minor, see below)

Minor non-conformities: These are not seen as serious. The organisation must complete an internal Corrective Action Plan (CAP) before Stage 2. CAP is not required to be sent to the Assessment Team at Stage 1.

Major non-conformities: These are more serious. The organisation will need to submit a CAP within ten days of receiving the audit report, with all actions scheduled to be completed before Stage 2. The CAP should be sent to the Assessment Team. The major non-conformities raised during Stage 1 will be re-assessed during Stage 2 Audit.

Step 4: Stage 2 audit

This is an on-site audit and takes place after the organisation has successfully completed Stage 1 and corrected any major non-conformities identified during the Stage 1 audit. Stage 2 confirms that the organisation’s management system is fully aligned to the standard. The evaluation is of management system implementation and its effectiveness.

Outcome: The audit report will detail the following:

• Any positive observations
• Opportunities for improvement – suggestions for improvement and any findings that could lead to potential non-conformities.
• Non-conformities (Major or Minor)
• Recommendation for Certification

Minor non-conformities: The organisation must complete an internal Corrective Action Plan (CAP) and submit this to the Assessment Team within 45 working days of receiving the audit report. The Assessment Team will review the CAP; it must detail the non-conformity, the cause, the proposed corrective action, who is responsible and the date the action will be implemented. Based on the evaluation of CAP, the recommendation for certification will be made.

For minor non-conformities, if an organisation has a corrective action procedure, this will not delay the certificate.

Major non-conformities: The organisation must complete an internal Corrective Action Plan (CAP) and submit it within 90 days (or 180 days depending on the number and risk of major non-conformities) of receiving the audit report be sent to the auditor.

What Comes Next?

Stay tuned for the second instalment in our two-part series about the ISO 37001:2016 certification process: sign up for our newsletter HERE!

In 2016, CRI Group™ launched Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence – an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including ISO 31000:2018 Risk Management- Guidelines, ISO 37000:2021 Governance of Organisations, ISO 37002:2021 Whistleblowing Management System, ISO 37301:2021 (formerly ISO 19600) Compliance Management system, Anti-Money Laundering (AML) and ISO 37001:2016 Anti-Bribery Management Systems. 

Who is CRI Group™?

Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

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CRI™ to attend 2022 Trade Winds Dubai, Gulf Region | March 6-8

2022 Trade Winds

We are delighted to unveil our place at the 2022 Trade Winds As the largest annual U.S. government trade mission – meet with Corporate Research and Investigations Limited (CRI Group™). Trade Winds, the largest U.S. Government-led trade mission and business development forum will be held in Dubai, UAE at the InterContinental Festival City, at the same time as World Expo. 

Dubai, UAE | March 6-8, 2022

Join us in Dubai, UAE for the largest U.S. government-led trade mission and business development forum. Organized by the U.S. Commercial Service, Trade Winds will feature meetings with U.S. commercial diplomats from over 20 countries in the Middle East, North Africa and Sub-Saharan Africa, exciting conference programming and plenty of networking. The registration fee for the forum is $750 per attendee.

Qualified U.S. businesses may customize their experience with optional business-to-business matchmaking meetings with pre-screened buyers, agents, distributors or joint-venture partners in the United Arab Emirates (March 8) as well as Algeria, Israel, Morocco and Qatar (March 2-3) and Saudi Arabia, Kuwait, and Egypt (March 9-10).

BOOK A MEETING NOW!

About Trade Winds

About CRI Group™

Corporate Research and Investigations Limited, or CRI Group™ for short, has been safeguarding businesses from fraud, bribery and corruption since 1990. Globally, we are a leading Compliance and Risk Management company licensed and incorporated entity of the Dubai International Financial Center (DIFC) and Qatar Financial Center (QFC). CRI® protects businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. Based in London, United Kingdom, CRI® is a global company with experts and resources located in key regional marketplaces across the Asia Pacific, South Asia, the Middle East, North Africa, Europe, North and South America. Our global team can support your organisation anywhere in the world.

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Anti-Money Laundering (AML) Checks; The Lowdown

Anti-Money Laundering checks is a broad term applied to define checks conducted as a portion of the UK’s Anti-Money Laundering regulatory framework. An AML can be a check on a person carrying out a specialised role, or an organisation supplying goods or services.  The official structure comprises of various distinct Acts and Regulations and differs from nation to nation depending on the laws and legislations the land has in place. The UK law makers are frequently recognised to pursue regulations that aim to counteract, identify, and report money laundering pursuits. This is in an effort to deal with the ever-increasing concerns encompassing criminal activity, terrorism, extremism and profits of corruption. In that sense, the UK Government have succeeded in detecting various vital segments that may be prone to money laundering and ought to take the lead in advocating for best practice and greater regulation within corporate organisations. This is comprehensive of a number of legal and fiscal sectors.

Why are Anti-Money Laundering Checks (AML) Necessary?

Anti-Money Laundering checks intend to generate alterations in the notion adjacent to money laundering as well as other types of monetary violations. Countless trade regulators and organisations employ Anti-Money Laundering checks as the first step in the HR and recruitment process as it helps HR people ensure that employees and candidates have the qualification to work or practice. Checks are also frequently utilised to detect clients while also confirming that additional organisations in the supply chain are proper and appropriate for the business needs. There is no exact collection of obligations for all Anti-Money Laundering checks nevertheless, the existing applicable regulations that are in place to pursue the advancement of risk-based intelligent surrounding money laundering and other such activities. However, it is important to note that there are laws in place that correlate with the need for an anti-money laundering check. Some of the legislations in the UK for instance include:

• The Terrorism Act 2000 (as amended by the Anti-Terrorism Crime and Security Act 2001 and the Terrorism Act 2006
• Anti-terrorism, Crime and Security Act 2001
• The Proceeds of Crime Act 2002 (POCA) as amended by the Serious Organised Crime and Police Act 2005 (SOCPA)
• Counter-terrorism Act 2008, Schedule 7
• Terrorist Asset-Freezing Act 2010
• The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
• The Criminal Finances Act 2017

An efficient Anti-Money Laundering structure is an indication of your organisations position in opposition to its competitors in the industry against the fiscal offenses. As international commercial nations become progressively more mindful of their obligations, international organisation must develop the comprehensive capability to report these matters and execute procedures, practices, and related risk assessment mechanisms in a bid to minimise their risk and consequence in the grand scheme of things.

CRI™ Anti-money laundering (AML) consultative solution intends to help the investigation of existing systems and further improve operational solutions that decrease your organisations risk of falling quarry to operative, supplier, or outside corporate and fiscal crimes. Our immense Anti-Corruption and Compliance network offers the defense you require when making significant bottom-line decisions crucial to your organisation’s success.

VIEW AML ADVISORY BROCHURE

What are the Outcomes of a Deficient AML Framework?

To have inadequate regulations can result in being indicted with participating in illicit pursuits surrounding money laundering and lead to several of the subsequent adverse outcomes:

• Damaged corporate reputations: brands and organisations who have a diminishing reputation can progressively expect both their supplier and consumer base to weaken causing brand devaluation. This can lead to monetary complexities as well as challenges being able to work in partnership with other organisations and suppliers as a great reputation ensures collaborators that your organisation conducts business lawfully and suitably making them more probable to want to work beside your organisation.
• Negative investor perceptions: in correlation to a wounded reputation, organisations may also find it increasingly challenging to find investors to back their ventures. This could lead to the premature shutting down of a business as well as other issues such as liquidation and bankruptcy.
• Corroding employee morale: trustworthy enterprise always begins from within the corporate culture. Engaging in illicit activities often result in high employee turnaround whilst also corroding employee morale and giving them the opportunity to embark on other illicit activities within the corporate area. This may lead to fraud, bribery and corruption commenced by the employees which is a detrimental and ominous oversight for any organisation. It’s also just as important to screen your employees so you know that your employees are competent for the role in question. Find out more about our employee background screening solutions here.
• Probable consumer boycotts: ethics are just important to a brands consumer as it is to the brand. In the wake of social activism, no organisation is renowned enough to not fall victim to a boycott effort. You may have some loyal consumers left but your organisation may end up with a longstanding, damaged reputation.
• Possible legal action: A general trend when it comes to issues surrounding money laundering is that it usually leads to further penalties surrounding fines and expenses. In this case, legal action not only damages the reputation of an organisation to investors, suppliers, and consumers, it can also result in fines & potential jail terms for company directors and fighting these cases are often as costly as they are time consuming.
•  

It is evident to see that the aftermath of partaking in illicit money laundering schemes and not implementing anti-money laundering checks can lead to the downfall of the entire organisation. And in a world of ever-tightening regulations, why wouldn’t you want to be one step ahead of the industry?

If the perception of an AML check still feels a little overwhelming to you, why not consider booking a free 30-minute consultation with one of our experts here at CRI® Group? Our specialists have years of experience and are qualified to offer your organisation personalised guidance to fit your professional requirements. Don’t hesitate, get in touch today and stay ahead of the rules and regulations that impact your organisation.

Get in Touch Today

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Risk Management New Approach. All Explained in this Free Playbook!

Risk Management New Approach. All Explained in this Free Playbook!

Risk management new approach. How do you manage risk? Managing risk effectively is essential to ensure businesses succeed and thrive in an environment of constant uncertainty.  All types and sizes of organisations face internal and external factors that directly impact whether an organisation can achieve their objectives or not. CRI Group™ can help you simplify risk management through a wide range of solutions that can be fully customised, regardless of the size, nature, or location of a business.

An organization can implement risk management across the entire company, and it can do so at any time. Risk management plans, such as ISO 37001 Audit Process, can offer several benefits that make them a worthwhile endeavor for every business. For example, risk management plans help companies to identify the potential risks they may face. Being aware of these risks allows businesses to make plans to avoid specific risks or deal with them when they arise. There are many benefits of implementing a risk management strategy:

• Can be used by organizations to compare their risk management practices with an internationally recognized benchmark, providing sound principles for effective management and corporate governance.
• Leads to more satisfied customers is a clear indicator to your customers and other stakeholders that as an organization, you are committed to managing risks in every part of your business.
• Increases public confidence in the organization as it demonstrates your management capabilities in protecting your business from internal and external threats.
• Gives you a healthier bottom line.
• Makes for consistent and efficient operations.
• In competitive bidding for commercial tenders, it will enhance your company’s reputation and give you a competitive advantage.

This playbook covers everything you need to know about Risk Management. Here’s a quick rundown of the playbook structure:

• What is Risk?

• What is Risk management?

• How is risk management evolving to tackle modern challenges?

• Business Risks Every Organization Should Plan For

• Principles of Risk Management

• How Risk Management and Due Diligence Interlock?

• and more

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Risk Assessment Breakdown: Identification, Analysis, and Evaluation

Risk management is a full-time, ongoing endeavour for organisations in today’s business world, and it poses constant challenges. Unfortunately, fraud, bribery and corruption are major factors affecting businesses and agencies of all sizes and industries. Being proactive against these risks can mean the difference between success and ruin. Whatever your reasons or motivations might be, if your organisation’s objective is to have an effective risk assessment management strategy in place. This article discusses the importance of Risk Assessment. There are two important building blocks that form the core of risk management:

• Risk assessment
• Risk treatment

Each of these stages can stand on their own – in this article we will go into detail about best practices for identifying risks, how to analyse them in terms of probability and severity, and how they can be evaluated in terms of the company’s risk appetite.

What is Risk Assessment?

Risk assessment is the overall process of identification, analysis and evaluation of any given risk. It can be a systematic examination of a task, job or process that a risk professional carries out at work for the purpose of identifying significant hazards. For example, the risk of someone being harmed and deciding what further control measures to take to reduce the risk to an acceptable level. The process will vary between organisations, but it should start with identification of hazards, analysis of who and what might be harmed, evaluation of the risk, documentation of the risks, taking action and review. Your organisation should conduct a risk assessment systematically, interactively and collaboratively, drawing on the knowledge and views of stakeholders. It should use the best available information, supplemented by a further inquiry as necessary.

Risk assessment breaks down into:

• Step 1: Identification
• Step 2: Analysis
• Step 3: Evaluation

Business Intelligence (BI) Solutions can help during this stage. BI take many shapes and forms in today’s complex business environment. Budgets are stretched and the challenges facing a business and its employees can sometimes lead to issues that start off small, but then lead to wider spread problems which can affect the very fabric of your organisation and damage both your credibility, reputation and bottom line profits. CRI Group™ takes two approaches to BI solutions:

• Intelligence operations (via market research and analysis): we focus on researching the future and potential growth of your business – i.e. determine the commercial viability and potential for success in the market, analyse consumer behaviour and business trends in that market, etc.
• Investigative operations (via commercial investigations): we focus on the current status of your business – i.e. location of assets, financial information, identification of unmet needs of any market, gauge brand awareness and identity in the market, etc.)

CHECK OUT OUR BI SOLUTIONS  or  DOWNLOAD BROCHURE

Risk Identification

The purpose of risk identification is to find, recognise and describe risks that might help or prevent an organisation achieving its objectives. Relevant, appropriate and up-to-date information is important in identifying risks. The organisation can use a range of techniques for identifying uncertainties that may affect one or more objectives. The following factors, and the relationship between these factors, should be considered:

• Tangible and intangible sources of risk;
• Causes and events;
• Threats and opportunities;
• Vulnerabilities and capabilities;
• Changes in the external and internal context;
• Indicators of emerging risks;
• The nature and value of assets and resources;
• Consequences and their impact on objectives;
• Limitations of knowledge and reliability of information;
• Time-related factors;
• Biases, assumptions and beliefs of those involved.

Your organisation should identify risks, whether or not your sources are under your control. Consideration should be given that there may be more than one type of outcome, which may result in a variety of tangible or intangible consequences.

Risk Analysis

Risk analysis allows you to understand the nature of risk, its characteristics and level. Because an event can have multiple causes and consequences and can affect multiple objectives a risk analysis should involve a detailed consideration of uncertainties such as risk sources, consequences, likelihood, events, scenarios, controls and their effectiveness.

Risk analysis can be undertaken with varying degrees of detail and complexity, depending on the purpose of the analysis, the availability and reliability of the information, and the resources available. Analysis techniques can be qualitative, quantitative or a combination of both, depending on the circumstances and intended use. Risk analysis should consider factors such as:

• The likelihood of events and consequences;
• The nature and magnitude of consequences;
• Complexity and connectivity;
• Time-related factors and volatility;
• The effectiveness of existing controls;
• Sensitivity and confidence levels.

A risk analysis is likely to be influenced by a wide range of variables, from any divergence of opinions, biases to perceptions of risk, from judgements, quality of the information used to the assumptions and exclusions made and any limitations of the techniques and how they are executed. These influences should be considered any risk analysis, documented and communicated to any decision-makers involved in the process.

It is important to remember that any highly uncertain event can be difficult to quantify, and this is an issue. If you find yourself in such a situation, using a combination of techniques generally provides greater insight. Risk analysis provides input to risk evaluation, to decisions on whether risk needs to be treated and how, and on the most appropriate risk treatment strategy and methods. The results provide insight for decisions, where choices are being made, and the options involve different types and levels of risk.

Risk Evaluation

Risk evaluation can support your decisions. Risk evaluation involves comparing the results of the risk analysis with the established risk criteria to determine where additional action is required. This can lead to a decision to:

• Do nothing further;
• Consider risk treatment options;
• Undertake further analysis to better understand the risk;
• Maintain existing controls;
• Reconsider objectives.

Any decisions should take into account the wider context and the actual and perceived consequences to external and internal stakeholders. The outcome of risk evaluation should be recorded, communicated and then validated at appropriate levels of the organisation.

Who should do Risk Assessments?

Well, by law, every employer must conduct risk assessments. Risk assessments should always be carried out by a professional who is familiar to risk, a person who is experienced and competent to do so.  Competence can be expressed as a combination of knowledge, awareness, training, and experience. Remember competence does not mean you have to know everything about everything, competence also means knowing when you know enough or when you should call in further expert help.

But we all like to think that all of our employees will be trustworthy, but this is not always the case. There have been many instances in which an employee has been dishonest about their job history, qualifications or even criminal history. A dishonest employee could be unqualified for the position, possibly endangering others on the job. Or they might be a fraud risk, willing to bend the truth in other ways in order to enrich or advance themselves on your dime. No organisation can afford to have employees or staff who aren’t what they claim to be. Even a seemingly innocent embellishment can indicate more background problems under the surface, and the potential for future problems down the road so remember, trust your employees but, verify them too. 

CHECK OUT OUR EMPLOYEE BACKGROUND SCREENING SOLUTIONS  or  DOWNLOAD BROCHURE

Risk Assessment and ISO 31000 Certification with ABAC™

While the team at CRI® do not deliver any training or certification on ISO 31000, our partner ABAC™ Center of Excellence do. ISO 31000 can provide the principles, framework and a process for managing risk. ISO 31000 is not a certifiable standard; the standard is a set of guidelines which provide guidance for internal or external audit programmes. However we recommend taking ISO 31000 Awareness training, this will enable you to fully understand Risk Management activities and mitigate risk. 

ISO 31000 was developed by hundreds of experts in risk mitigation, from thirty countries. This international effort produced a standard that is worldwide and represents best practices and leading operations for risk management. Organisations can trust that they are following a tested, robust standard to increase success. The standard converts risk management into a set of “friendly” and actionable – and straightforward to implement – guidelines, regardless of the size, nature, or location of a business. 

The training helps establish an ethical culture by educating your personnel on the following:

• What constitutes fraud, corruption, and bribery, and why these are so damaging to business
• How to identify red flags of fraud, corruption, and bribery
• The process for reporting fraudulent and unethical acts
• The organization’s zero-tolerance attitude toward unethical behaviour and willingness to terminate employees for breaches, and prosecute unethical acts
• The serious ramifications for committing fraud or bribery, the legal consequences, and the negative impact on one’s career

The ISO certifications helps us at ABAC™ to provide appropriate anti-bribery training to personnel across various industries. This standard helps to assess bribery risks, perform the appropriate due diligence required for your business and to take reasonable and proportionate steps to ensure that controlled organizations and business associates have implemented appropriate anti-bribery controls.

> Find out more about ISO 31000 Risk Management and other standards now!

Other Solutions

While CRI™ may not offer the ISO certification, we do offer other services. We specialise in solutions regarding compliance, working as trusted partners to businesses and institutions across the globe. Our experts work with energy, insight and care to ensure we provide a positive experience to everyone involved – clients, reference providers and candidates. CRI’s unique identity and vision evolved from our fundamental desire to support our clients and their candidates, thus creating the DueDiligence360™.

The DueDiligence360^TM reports to help organisations comply with anti-money laundering, anti-bribery, and anti-corruption regulations. This service also proves beneficial ahead of a merger, acquisition, or joint venture as it can be used for a third-party risk assessment, onboarding decision-making, and identifying beneficial ownership structures. Identifying key risk issues clearly and concisely helps enhance your knowledge and understanding of the customer, supplier, and third-party risk, helping you avoid those involved with financial crime.

Why not consider our background investigative solutions? Employee Background Checks can aid in reducing the risk of hiring an employee who does not live up to their supposed skill set and could cause irrevocable damage. Firms spend years, thousands, even millions to brand their products and services – it only takes one bad hire to cause loss of capital and reputation. It can go as far as bringing a business to fail – especially if the employee holds malice towards the organisation. EmploySmart™ is CRI’s own solution aiming to expose vulnerabilities and threats within your organisation. Much like the ISO certification, our EmploySmart™ is a risk management measure which can be used to significantly reduce business and financial crime, fraud and malpractice within your workplace.

Our solutions are also certified by the British Standard Institute BSI for the scope of BS 7858:2019 Screening of individuals working in a secure environment, Code of practice (the only BS 7858 certified background screening services provider in the UAE and across the Middle East); and BS 102000:2018 Code of practice for the provision of investigative services.

Another risk management solution to consider from CRI® is our Third-Party Risk Management solution (TPRM),  also known as 3PRM™. In wake of the global pandemic, the 3PRM™ was developed in a bid to aid organisations to accurately determine the legal compliance, financial viability, and integrity levels of external parties, vendors, and customers who seek to be affiliated with and represent the business.

The 3PRM-Certified™ program consists of gap analysis and investigative due diligence on the targeted above parties.  This highly thorough program reveals anti-corruption, compliance and risk management discrepancies associated with the international regulatory framework helping your business to flourish at any scale. Find out more about CRI Group’s Solutions here.

If you’re unsure of what solution may be best for you and your business, how about connecting with one of our experts for a free consultation? Receive tailored advice from the top analysts and investigators across the globe.

CONTACT US

About CRI Group™

Based in London, CRI™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI™ launched Anti-Bribery Anti-Corruption (ABAC™) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC™ operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI® Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC™ for more on ISO Certification and training.

Filed under: All Industries, Anti-Bribery Anti-Corruption Solution, Background Investigation, Compliance Solution, Due Diligence, ISO 37001, Resources, Third-Party Risk Management by admin
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WEBINAR | Breaking Down The ISO 37001 Audit Process

CRI Group’s ABAC™ will be hosting a paid webinar on the 30th of September exploring the Pitfalls Most Organisations Often Commit – the importance of implementing Anti-Bribery Management System (ABMS). Being a part of the solution means being able to share our expert knowledge on what would be best for your organisation.

Registration Expired

Filed under: Anti-Bribery Anti-Corruption Solution, Compliance Solution, ISO 37001, Resources by admin
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Why Financial Services Firms Need ISO 37001 ABMS?

When Société Générale, a global financial services institution based in France, agreed to pay a combined total penalty of more than $860 million for an alleged bribery and corruption scheme, it served as a warning shot to financial firms worldwide that a culture of enforcement has arrived. Société Générale was accused of paying bribes to officials in Libya and committing violations in manipulating the London InterBank Offered Rate (LIBOR), one of the world’s leading benchmark interest rates. Together with other regulatory penalties faced by the financial services giant, the total amount to be paid exceeds $1 billion. (The United States Department of Justice, 2018)

Bribery and corruption often go together with money laundering – and, as such, the financial sector faces new Anti-Money Laundering (AML) rules and legislation that is strict and increasingly enforced. Remaining in compliance through implementing proper prevention controls is a must. Failing to do so can mean a loss of business, trust and reputation: Banking giant Citibank was fined $70 million in the US for failing to address shortcomings in its anti-money laundering policies. We at CRI intend on being apart of the solution. Therefore, CRI Group’s ABAC™ will be hosting a webinar on the 30th of September exploring the Pitfalls Most Organisations Often Commit – the importance of implementing Anti-Bribery Management System (ABMS). Being a part of the solution means sharing our knowledge so society is one step closer to an ethical reality.

Registration Expired

In the US alone, more than 100 bribery investigations were in progress at the end of last year, with the financial services industry facing the most investigations. (Wall Street Journal, 2019)

Having layers of safeguards in place is required both from a legal and compliance standpoint. One of the most critical layers is an effective anti-bribery management system (ABMS).

Prevent Corruption and Promote Compliance

There is a solution that financial services organisations can implement to take a proactive stance against bribery and corruption: The ISO 37001:2016 Anti-Bribery Management System standard. ISO 37001 ABMS is designed to help global organisations implement an anti-bribery management system (ABMS), as the standard specifies a series of measures required by the organisation to prevent, detect and address bribery, and provides guidance relative to that implementation.

For financial services firms, this is a critical layer of protection that provides both anti-bribery controls and a system for compliance with various anti-corruption legislation, such as the FCPA and UK Bribery Act. The UK Bribery Act’s adequate procedures requirement dictates that all companies need to have ongoing monitoring, training, surveillance and risk assessments – ISO 37001 ABMS is designed to fulfil these criteria and more.

CRI Group’s ABAC™ Certification Services is accredited to offer independent ISO 37001 certification to ensure that an organisation is in compliance with the standard, which is recognised and practised in more than 160 countries worldwide. CRI Group’s auditors and analysts work with financial services organisations to develop measures that integrate with existing management processes and controls, and include:

• Adopting an anti-bribery policy
• Establishing buy-in and leadership from management
• Training personnel in charge of overseeing compliance
• Communicating the policy and program to all personnel and business associates
• Providing bribery and corruption risk assessments
• Conducting due diligence on projects, business associates and other third-party affiliations
• Implementing financial and commercial controls
• Developing reporting and investigation procedures

Our paid webinar will have a rundown of the following:

• What are the core Bribery and Corruption Risks for Financial Institution?
• How to protect financial institutions and corporations from bribery and corruption risk
• Reparations from bribery that could affect the businesses, clients, and employees
• Successful regulations to mitigate risk for bribery and corruption.
• What can be done if bribery is detected?
• Internationally recognised solutions laid forth by ISO 37001: Anti-Bribery Management System that gives businesses effective controls to mitigate risk
• Components of risk management at a financial institution

We will also be exploring how the implementation of such a standard aids in examining and dealing fittingly with any actual or suspected bribery within the corporation and also how to implement appropriate financial, procurement and other commercial controls so as to help prevent the risk of bribery in financial services as these organisations face unique challenges.

Register Here (Expired)

Among them are maintaining proper internal procedures as they relate to bribery and AML regulations. These measures can be logistically challenging, especially in the auditing process – but keeping accurate books and records is a key provision of the UK Bribery Act. ISO 37001 ABMS standard makes this a key provision in cultivating proper due diligence and reporting procedures.

Another major challenge involves monitoring third-party risk. The due diligence practices and risk assessments implemented through ISO 37001 ABMS are critical in this area. Financial services firms, more than any other sector, must conduct effective vetting and ongoing monitoring of third-parties. This goes beyond “on-boarding” and relates to how companies continually assess risk from outside partners – including brokerage firms, introducers, agents, joint-venture relationships, even clients – as borrowers, for example, represent a major risk on the balance sheet.

Some financial services companies do not properly score or assign risk profiles to third-party partners, and this can represent a major weak point in efforts to prevent bribery, corruption and money laundering. Regulators understand this, too. That’s why ISO 37001 ABMS dictates thorough and comprehensive due diligence in regards to all third-parties and especially in the case of mergers and acquisitions.

Once certified, an organisation must continue surveillance and undergo a recertification audit over three years to ensure that the organisation still complies with the ISO 37001:2016 ABMS standard. During this time, any changes to processes, the addition of new partners and expansion/acquisition of new assets or energy contracts, etc. are carefully reviewed.

Long-lasting Benefits of Certification

ISO 37001 ABMS provides a strong framework for addressing and isolating risk factors, and the benefits of certification are far-reaching, impacting not just the primary organisation but also influencing contractors, clients, and raising the profile of the company as an ethical entity that is a good trading partner. By achieving ISO 37001:2016 ABMS certification, a financial services firm will:

• Ensure that the organisation is implementing a viable anti-bribery management system utilising widely accepted controls and systems.
• Assure management, investors, business associates, personnel and other stakeholders that the organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption.
• If needed, provide acceptable evidence to prosecutors or courts that the organisation has taken reasonable steps to prevent bribery and corruption.

Cases like Société Générale are not isolated, but more and more, we are seeing companies punished for not taking proper preventative action with a robust anti-bribery management system (ABMS). Financial services firms need to be aware and stay in front of increased anti-bribery and corruption legislation given that such regulations have, in most cases, achieved a global reach. For ownership and management, the stakes are especially high – accountability now includes criminal liability for organisation personnel as individuals, beyond (and in addition to) liabilities faced by the organisation. This trend will only continue as governments, and their publics become increasingly intolerant of fraud, bribery and corruption. Significant media coverage and the real and perceived threat to governments’ economies contribute to this changing landscape of public opinion.

As the ISO 37001 International standard document states, “Conformity with (ISO 37001) cannot provide assurance that no bribery has occurred or will occur in relation to the organisation, as it is not possible to eliminate the risk of bribery. However, (the standard) can help the organisation implement reasonable and proportionate measures designed to prevent, detect and respond to bribery”. With this in mind, It’s important to note that ISO 37001 certification, on its own, is not a “safe harbour” from prosecution should bribery or corruption be discovered. Significantly, ISO certification is, as the above explains, a potential mitigating piece of evidence to regulators or even prosecutors and the courts that the entity has taken meaningful steps in its efforts to prevent bribery and corruption.

Financial Services Firms Need ISO 37001 ABMS

It is critical that any financial services organisation have a proper, comprehensive strategy to prevent and detect bribery and corruption, and remain in compliance with all regulations – on the local, regional, and international levels. The ISO 37001 ABMS standard is an established, tried and tested program to address those issues head-on through a comprehensive program of training and certification. The training process is tailored to the organisation while still following the developed curriculum and documented best practices. Due diligence procedures and risk assessments are applied in a thorough, comprehensive manner. Certification requires the demonstration that processes have been implemented effectively, with follow-up evaluations.

Worldwide developments in laws and regulations have demonstrated that there isn’t time to wait to implement controls and compliance procedures – the next investigation and/or prosecution may be too late. The harm caused by bribery and corruption to an entity’s reputation, investments and business can be far-reaching and long-lasting.

This paid webinar will be running from the following times on Thursday the 30th of September;

• 08:00 to 10:00 GMT
• 15:00 to 17:00 MYT
• 12:00 to 14:00 GST

Your turnout with come with a certificate of Attendance (COA) as well as a complimentary webinar ABMS Awareness for 2 Pax per company. While you’re there, why not attain a Continuing Professional Development (CPD) certificate and stay on top of your industry?

Register your place for this webinar here and find out how to tackle the issue of bribery and corruption in your workplace before it has time to manifest itself into a greater issue. Finance is the greatest asset to the economy after all.

Complete Registration (Expired)

Filed under: Anti-Bribery Anti-Corruption Solution, Compliance Solution, Due Diligence, Finance & Professional services Industry, ISO 37001, Resources by admin
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