Managing Third-Party Risks: A Checklist

THIRD-PARTY RISK MANAGEMENT CHECKLIST

Third-party risk management checklist. Fraud doesn’t take a break in times of crisis – in fact, that’s often when it thrives. And the same is true for supplier fraud. Unethical business practices by third-party partners can directly impact your organization in all sorts of ways. This type of fraud can cause financial, logistical, and reputational harm.

Locked in the grips of the COVID-19 pandemic, New York City found itself desperately in need of medical supplies. In particular, the city hit hard by the pandemic required millions of 3M-brand N95 respirators, the type that keeps health care workers, police, paramedics and others safe. A supplier emerged to fill this need potentially.

Unfortunately, he had a scheme to defraud the city of $45 million through price-gouging and fraudulently posing as a 3M- dealer. The formerly used car dealer in New Jersey, the fraudster now faces wire fraud and wire fraud conspiracy charges in a three-count criminal complaint unsealed in the U.S. District Court in Manhattan (New York Times, 2020). Managing Third-Party Risks

The case is an unfortunate reminder of what type of fraud and corruption lurks in supply chains. While a crisis presents new vulnerabilities – often, safeguards are bypassed for urgency – companies must be always on guard for third-party fraud. Due diligence isn’t just a corporate buzzword, nor is it a concept to keep compliance officers happy. It must be an integral part of every organization’s core business model. Every organization can do the following key third-party due diligence measures to stay better protected from supplier or contractor fraud.

THIRD-PARTY RISK MANAGEMENT CHECKLIST EVERY ORGANISATION COULD USE:

1. Identify vulnerabilities

Before evaluating its third-party partners, an organization should look inward and measure its own risk management tools. These include the following:

• Audit and supervision functions
• Business continuity plans, supply chain alternatives (very critical would considering third-party contracts)
• Jurisdictional considerations
• Data and IP protection
• Whistleblower policies

2. Conduct due diligence

The organization should engage a risk management process on all current and potential suppliers and contractors. For each third party, the organisation should evaluate the following:

• Business and operations
• Financial condition and reputation
• Experience, culture, vision and business style
• References and government records (including any legal action, bankruptcies, structure changes)
• Background checks (including ownership and key personnel)
• Insurance and certifications

3. Maintain management oversight

Due diligence is only worthwhile if appropriate action is taken in response to its findings. Once third-party partnerships have been evaluated and approved, the organization should continue to manage, monitor and maintain these relationships. Risk management is not a one-time process. It should be scheduled regularly (yearly at minimum) to ensure the proper standards are maintained for the organization. Not every company or government organization is ordering emergency supplies due to COVID-19 or other crises. With proper third-party due diligence, third-party due diligence can protect organizations year-round from the risk of any of the following serious pitfalls:

• Merging with an international business embroiled in behind-the-scenes legal battles.
• Getting caught up in making procurement decisions involving the inappropriate influence of government officials who were slated to receive kickbacks.
• Partnering with organizations that are potential credit risks, have claimed bankruptcy, have dissolved stated companies or are faced with debtor filing.
• Awarding work to an overseas contractor with absolutely no prior experience
• Affiliating with a contracting company owned by a politician with significant influence on future awards

It is recommended and necessary for many organizations to have a team of professionals guide you through implementing a comprehensive program for third-party risk management. That’s where CRI® Group comes in. We have one of the largest, most experienced and best-trained integrity due to diligence teams globally. With multi-lingual teams that have conducted assignments on thousands of subjects in over 80 countries, CRI® Group’s due diligence experts are committed to maintaining and constantly evolving our global network.

Managing risk effectively is essential to ensure businesses succeed and thrive in an environment of constant uncertainty. This playbook covers everything you need to know about ISO 31000:2018; here’s a quick rundown of the playbook structure:

• What is ISO 31000? Why is this Standard a good idea?
• ISO 31000 framework, why was it revised? And What are the main differences?
• Key Clauses of 31000:2018 and Who is the standard for?
• The process and the link between 31000:20180 and other standards

Getting Started with ISO 31000 Risk Management?

DOWNLOAD ISO 31000 PLAYBOOK NOW

3PRM-Certified™ a third-party compliance verification and certification program

As the risk for data breaches and supply chain disruption continues to rise with COVID-19, so does the need for effective third-party risk management (TPRM) programs. Whether you’re a TPRM professional looking for a certification to advance your skillset, or the leader of your organization considering how to better equip your team with the best knowledge and skills, the 3PRM-Certified™ program is an all-in solution. Our 3PRM™ service is flexible, and we tailor our scope to address an organization’s specific concerns and risk areas. CRI® Group’s exclusive 3PRM-Certified™ solution provides the very best in third-party risk management. Our 3PRM-Certified™ program provides a proactive approach to mitigating risks from third-party affiliations, protecting the organization from liability, brand damage and harm to the business. The 3PRM-Certified™ program includes a focus on the following:

• Providing third-party risk assessments
• Meeting contracting requirements
• Conducting due diligence
• Identifying potential fraud risks
• Providing management oversight

Utilizing a network of trained professionals positioned across five continents, CRI® Group’s 3PRM services utilize one of the largest multi-national fraud investigation teams the industry has to offer. The 3PRM-Certified™ program is especially critical when your business is performing pre-merger and acquisition research and pre-IPO due diligence, engages new clients, employs, contracts or retains foreign business partners and requires a consistent and audit-worthy AML and anti-corruption compliance program.

This TPRM Strategy program will help organizations establish the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. Third-party relationships are critical in business today and include partnerships with suppliers, distributors, consultants, agents and other contractors. While such affiliations are essential to the success of your organization, an organization cannot overestimate the consequences of inadequate due diligence.

VIEW 3PRM^TM BROCHURE

Let’s Talk!

Get ahead of any potential problems down the road with suppliers, contractors, and other third-party partners. Our extensive solutions include due diligence, employee pre- and post-background screening, business intelligence and compliance, facilitating any decision-making across your business no matter what area or department. Contact CRI® today and learn more about our third-party due diligence and risk management solutions. If you have any further questions or interest in implementing compliance solutions, please contact us.

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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, 

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.

MEET THE CEO

Zafar I. Anjum is Group Chief Executive Officer of CRI® Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due to diligence and employee background screening services for some of the world’s leading business organizations. Headquartered in London (with a significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center – QFC, and the Abu Dhabi Global Market-ADGM, CRI® Group safeguard businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI® Group maintains offices in UAE, Pakistan, Qatar, Singapore, Malaysia, Brazil, China, the USA, and the United Kingdom.

Contact CRI® Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI® Group Chief Executive Officer

37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom

t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com

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Can ISO 37001:2016 prevent bribery?

Since its launch in 2016, ISO 37001 Anti-Bribery Management Systems standard has had its supporters and critics. Some regulatory bodies and compliance communities initially expressed concern regarding the lack of a body of evidence supporting the effectiveness of ISO 37001:2016 from certain standpoints. Critics asserted that the new standard failed to address broad compliance concerns, and questioned whether ISO 37001:2016 certification alone can prevent prosecution. These observations should certainly be weighed and considered, as any new compliance standard must be properly evaluated on its merits. In the case of ISO 37001, however, the critics have made some misjudgments in regards to the key factors they feel are in question with the standard. Can ISO 37001:2016 prevent bribery?

One of the most important things to remember is that a standard like 37001 and all of its measures require a commitment and implementation by the organisation adopting them. ISO 37001 is a standard, administered by a certified body but ultimately implemented by employees of the organisation itself. The purpose of ISO 37001 standard is to provide a framework against which an organisation’s anti-bribery management can be assessed and certified, rather than a foolproof blueprint to prevent bribery.

The story behind ISO 37001:2016

First, some background: The International Organization for Standardization, or ISO, is the international standard-setting body composed of representatives from various national standards organisations. Founded on 23 Feb. 1947, ISO promotes worldwide proprietary, industrial, and commercial standards. Responding to an international need, ISO issued the 37001:2016 Anti-Bribery Management System standard to help businesses, nonprofits and governmental agencies reduce their risk of bribery and corruption by establishing, implementing, maintaining and improving an anti-bribery management system.

The ISO 37001 standard requirement, which references to ISO 19600 – Compliance Management System, specifies mandatory requirements for organisations when establishing/updating their anti-bribery management programs in a manner that is proportionate to the potential bribery risk. The reference to these requirements is referred to as “appropriate” and “reasonable”, hence directing organisations to undertake a subjective, diligent and rigorous review of current compliance framework, which will make ISO 37001 effective for them. According to Deloitte & Touche LLP, “[in ISO 37001:2016] it’s the substance, not the form, of a compliance program that determines its effectiveness”.

Anti-corruption versus broad compliance issues

Some of the concerns regarding the effectiveness of ISO 37001 are focused on whether it addresses broad compliance issues, like inequality, harassment, various types of fraud (outside of bribery and corruption), or similar offences. Seeing that it generally does not, as its focus is on anti-bribery and anti-corruption compliance, some take the view that ISO 37001 has adopted a simplistic approach. The scope of ISO 37001 addresses “establishing, implementing, maintaining, reviewing, and improving an anti-bribery management system,” whether as a stand-alone initiative or part of a broader anti-corruption. Therefore, implementing ISO 37001 standard requirements should be viewed as a way of enhancing, rather than replacing, an organisation’s existing anti-corruption compliance programs.

ISO 37001 is effective step-by-step guidance for those organisations which lack an anti-corruption framework and enables them to implement a compliance program without investing significant time in identifying the regulatory and non-regulatory requirements. In fact, ISO 37001 has incorporated Federal Sentencing Guidelines, U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) Resource Guide to the U.S. Foreign Corrupt Practices Act, the U.K. Ministry of Justice Bribery Act 2010 Guidance, and OECD’s Good Practice Guidance on Internal Controls, Ethics and Compliance. Former U.S. Deputy Attorney General Rod Rosenstein highlighted three hallmarks of a policy-effective compliance program, which are concurrent with ISO 37001 requirements and include: fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel has appropriate access to the board.

Prosecution of offences

Lastly, there is a widely held belief that obtaining ISO 37001 certification is an effective tool to avoid prosecution for bribery. These misconceptions have not been viewed favourably insofar as to Ms. Hui Chen, U.S. DOJ’s former compliance counsel, stating “Dan Kahn, the Chief of the FCPA Unit in the Fraud Section of DOJ’s Criminal Division, has been very consistent: prosecutors will not outsource their responsibilities”. Rightly so. ISO 37001 certification does not act as insurance to corporate liability for bribery, neither does it refute the need to perform due diligence, and it should be considered and implemented as per company’s risk profile. In practicality, implementing ISO 37001 can demonstrate to enforcement agencies and regulators that the organisation has taken reasonable steps to establish a compliance program to mitigate bribery risks, however, ISO 37001 certification will mitigate the consequences, if not a shield, an organisation from investigation or prosecution.

ISO 37001:2016 embraced by organisations and governments

It is important to note that organisations and governments alike are embracing ISO 37001 as the standard for prevention and detection. One example of this is in Malaysia, where the ISO 37001 standard was adopted across the government under Prime Minister Tun Dr Mahathir Mohamad. The new system has been received positively in both the public and private sectors, and Malaysia’s former anti-graft chief said “the people’s perception on the government’s seriousness to fight corruption had increased to 70.8 per cent last year from 59.8 per cent in 2016. He said that Malaysia has also shown improvement in its performance indicators in several important international studies and indexes” (New Straits Times, 2019). True to form, various heads of government in the country are following the directive. Defence Minister Mohamed Sabu recently “cautioned his officers to adhere to the Anti-Bribery Management System, which had attained the International Standards Organisation’s ISO 37001: 2016 certification” (New Straits Times, 2019).

Malaysia is not alone. In Peru, Singapore, and China (Shenzhen Institute of Standards and Technology [SIST]), the national standard bodies have adopted and localised the ISO 37001 standard. In Italy, the ISO 37001 accreditation scheme has been developed by Accredia; whereas in the UK, United Kingdom Accreditation Service (UKAS) has undertaken an ISO 37001 pilot program to develop an accreditation scheme. In the United Arab Emirates, Emirates International Accreditation Centre (EIAC) is undertaking the ISO 37001 accreditation scheme development with CRI® Group’s ABAC® Center of Excellence. ABAC® is an initiative launched by CRI® Group and offers ISO 37001 certification services. Hence, amid these positive developments, the outlook for ISO 37001 looks promising. ISO 37001 is not a “silver bullet” to foolproof an organisation from bribery or corruption, or avoid prosecution should those offences occur. It was never designed to be. Instead, it is a framework to implement the necessary controls and systems at the organisation level – across all levels – so as to be better equipped to prevent bribery and corruption moving forward.

CRI® Group has experts who have conducted fraud investigations all around the world, for organisations of all sizes and industries. Our investigators work on-site at your company bringing a boots-on-the-ground approach to uncovering all the facts of the case. When you’ve uncovered fraud, that’s the time to let the experts take over. You owe it to yourself and the future of your business to make sure every investigation is done professionally and effectively. Contact CRI® to learn more about our fraud investigations today. Get a FREE QUOTE

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, 

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 organisations. Contact ABAC® for more on ISO Certification and training.

MEET THE CEO

Zafar I. Anjum is Group Chief Executive Officer of CRI® Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due to diligence and employee background screening services for some of the world’s leading business organisations. Headquartered in London (with a significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center – QFC, and the Abu Dhabi Global Market-ADGM, CRI® Group safeguard businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI® Group maintains offices in UAE, Pakistan, Qatar, Singapore, Malaysia, Brazil, China, the USA, and the United Kingdom.

Contact CRI® Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI® Group Chief Executive Officer

37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom

t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com

Filed under: Anti-Bribery Anti-Corruption Solution, Compliance Solution,

How to demonstrate “Adequate Procedures” in Malaysia?

State of Corruption in Malaysia

While a large part of the political and economic universe still believes that engaging in some form of corruption is the only way to survive and advance, many countries now are taking drastic measures to root out corruption, and Malaysia is rushing to the forefront of that trend. Currently ranked at 51 out of 180 countries on Transparency International’s “Corruption Perception Index” (2019), with a score of 53 (where 0 is perceived to be highly corrupt and 100 is perceived to be very clean), the Malaysian government emerged from the highly publicized 1MDB financial scandal on high alert and with a firm resolve to adopt tough anti-corruption legislation as one of its main priorities.

The result was the empowerment of the Malaysian Anti-Corruption Commission (MACC) and its 2009 Act which addressed corruption on both the political and private sector levels.  The Parliament’s subsequent amendment – Section 17A – was added in 2018, which likened the legislation to the UK Bribery Act but added a “parallel” element of personal criminal liability in corporate bribery cases. And that’s where business organisations need to take notice and take immediate action.

Demonstrating “Adequate Procedures” through ISO 37001 Certification

ISO 37001 Anti-Bribery Management System is an internationally accepted standard that specifies the procedures by which an organisation should implement in preventing bribery while detecting and reporting any bribery incident that occurs. The standard requires organisations to implement these procedures on a reasonable and proportionate basis according to the type and size of the organisation, and the nature and extent of bribery risks faced. It applies to small, medium and large organisations in the public and private sector and can be implemented in any country. Though it will not provide absolute assurance that bribery will completely cease, the standard can help establish that the organisation has in place reasonable, proportionate and adequate anti-bribery procedures.

ABAC® Center of Excellence Limited is fully accredited as a Conformity Assessment Body (Certification Body) to assist your organisation in attaining ISO 37001 certification through a thorough bribery risk assessment and audit covering the entire scope of the standard The audit methodology is evidence-based, meaning any issues raised will be confirmed through adequate evidence that the ABAC® Certification team has discovered during the audit. Auditing techniques take a risk-based approach to examining your organisation’s Anti-Bribery Management System (ABMS), and the ABAC® Certification team will increase the scale of the investigation if they determine that a specific process presents a higher risk side.  Factors such as Impact, Negligence, Minor, Major, and Critical are taken into consideration during the audit.

A separate audit method is a process-based approach where the ABAC® Certification examines the organisation’s processes while considering the interaction between those processes.  Finally, there is a sampling-based audit approach where ABAC® Certification incorporates an appropriate sampling plan utilising samples from different ABMS processes to conclude and support the audit findings and results.

The audit is extremely thorough in its approach, which results in accredited certification for the scope of the ISO 37001 Anti-Bribery Management System.  Because of the standard’s international acceptance and the thoroughness of the audit process, such certification can provide a valuable safeguard in demonstrating an “adequate procedures” compliance defence in cases posing a liability for a company’s failure to prevent bribery. Indeed, from an FCPA perspective, certification may provide tangible evidence that a compliance program was in place at the time of the alleged bribery actions. And from a UK Bribery Act perspective, the certification could provide the company with tangible prima facie evidence presented by an accredited certification body attesting to the establishment and effectiveness of the organisation’s compliance program. Notably, per Section 17A of the Malaysian Anti-Corruption Commission, the Prime Minister’s National Anti-Corruption Plan 2019-2023 has declared ISO 37001 certification a requirement for companies operating in Malaysia.

There is a strong likelihood that ISO 37001 Anti-Bribery Management System will continue to set the pace for a globally recognised “adequate procedures” standard for corporations embroiled in corruption litigation proceedings. But for now, the most powerful “insurance” tool that public and private sector organisations can use in their defence strategy is ISO 37001 ABMS certification.

About 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,

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 organisations. Contact ABAC® for more on ISO Certification and training.

Filed under: Anti-Bribery Anti-Corruption Solution, Compliance Solution, CRI News, ISO 37001, Malaysia, Kuala Lumpur, Resources by admin
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MACCA’s Corporate Liability Provisions are in place

Malaysia is taking a further step against corruption with its new Corporate Liability Provisions of the Malaysian Anti-Corruption Commission (Amendment) Act 2018. The new provisions go into force this June. The measure has been compared to the UK Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act (FCPA) 1977 (The Star, 2019). Section 17A of the MACC Act 2018 will enable the prosecution of individuals accused of corruption, not only organisations. Under the provisions, an organisation’s “directors, controllers, officers, partners, or managers are deemed to have committed the same offence, which carries a maximum penalty of a fine of not less than 10 times the value of the gratification or RM1 million, whichever is higher, and 20 years’ jail unless the firm is able to prove that it had in place procedures designed to prevent corrupt practices. The provision is modelled after the United Kingdom’s Section 7 of the Bribery Act 2010, which is widely regarded as ‘the toughest anti-corruption legislation in the world’” (New Straits Times, 2019). Perhaps it’s no coincidence that Malaysia improved by six points and jumped 10 places to 51 in Transparency International’s 2019 Corruption Perceptions Index (CPI). The CPI “measures public sector corruption including bribery, diversion of public funds, use of public office for private gain, and nepotism in the civil service” (Free Malaysia Today, 2020).

The change in law and perception meets popular demand in Malaysia, where the 1MDB case became the defining bribery scandal in the region. Malaysia’s state-owned investment fund, 1MDB, was supposed to attract foreign investment. Instead, it “spurred criminal and regulatory investigations around the world that have cast an unflattering spotlight on financial deal-making, election spending and political patronage under former Prime Minister Najib Razak. The figures are mind-boggling: a Malaysian parliamentary committee identified at least $4.2 billion in irregular transactions related to 1MDB. In May, Najib was ousted from power in a general election as the scandal fueled a voter backlash that ended his party’s 61 years of rule. As the investigations continue, Najib faces trial on corruption charges and U.S. prosecutors have implicated at least three senior Goldman Sachs Group Inc. bankers in a multiyear criminal enterprise” (Bloomberg, 2018).

The 1MDB scandal also demonstrated, however, that investigation and enforcement were stepping up in the face of public outrage. The MACC Act 2018 provided regulators with more teeth in the fight against corruption in the country. At ABAC Summit – Kuala Lumpur, organised by CRI Group, Mohd Nur Lokman bin Samingan, Assistant Commissioner at Malaysian Anti-Corruption Commission, said that some of the MACC Act’s provisions are meant “to encourage business and commercial activities being carried out in a corruption-free environment; to encourage all commercial organisations to take adequate measures in order to prevent corruption in their respective organisations; and to promote better corporate governance and legal compliance by requiring corporations to take proactive roles in preventing corruption.”

Demonstrating “adequate procedures” with ISO 37001 certification

Now more than ever it is critical that organisations undergo a program of compliance and demonstrate “adequate procedures” with ISO 37001:2016 Anti-Bribery Management standard certification. ISO 37001 is an established, tried and tested program that provides a comprehensive program for preventing bribery and corruption. It can be tailored to organisations of all sizes and industries, and certification requires the demonstration that processes have been implemented effectively – with follow-up evaluations. The new corporate liability provisions to the MACC Act are an important thing for safeguarding Malaysia’s economy and investments.

It is crucial to trust your anti-bribery and compliance strategies to accredited ISO 37001 certification providers. CRI Group’s ABAC® has recently announced that the United Kingdom Accreditation Service (UKAS) has accredited its ABAC Certification services for administering the ISO 37001:2016 Anti-Bribery Management Systems standard. ABAC® provides ISO 37001:2016 anti-bribery management systems certification for all types of organisations across the globe that implement prescribed measures to prevent, detect and address bribery. Pursuant to this, UKAS accredited ABAC Center of Excellence Limited in the UK, Malaysia and UAE for ISO 37001:2016 Anti-Bribery Management Systems (ABMS) certification in accordance with ISO/IEC 17021-1: 2015 conformity assessment requirements for bodies providing audit and certification of management systems.

Trust ABAC®, your accredited certification provider in Malaysia to comply with requirements of Section 17A of the Malaysian Anti-Corruption Commission Act (MACCA 2018) with confidence. To learn more about how the ABAC Center of Excellence can help tailor an ISO 37001 certification program to your organisation, contact ABAC Center of Excellence Limited today.[/vc_column_text][/vc_column][/vc_row][accordion_father][accordion_son title=”About 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,

In 2016, CRI Group 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.[/accordion_son][/accordion_father][/vc_column][/vc_row]

Filed under: Anti-Bribery Anti-Corruption Solution, Compliance Solution, ISO 37001, Resources by admin
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Senior Management need to take responsibility for managing financial crime risk now!

Corporate fraud is only one form of transnational financial crimes and money laundering is a prominent form which involves the false legitimisation of illegal funds (Unger & Van Der Linde, 2013, p. 22). Increasing attention has been given to this form of financial crime, particularly on an international level, which has provoked the creation of laws across the globe designed to detect, punish and prevent it (Otusanya, 2009). Globalisation has rendered it all the more easy for finances to be transferred between countries, hence the international status of money laundering (Beekarry, 2013). This type of transnational financial crime poses a particular threat to the economic and political wellbeing of states and national governments (Rusmin & Alistair, 2007). This has led to reforms in anti-money laundering regulations across the globe, as it has been recognised that such activity must be more aggressively monitored, prevented and punished (Ridley & Dean, 2012). This strongly indicates that a prominent motivational factor in the perpetration of transnational financial crimes is a lack of effective regulation, monitoring and awareness of those who engage in such conduct.

With little fear of detection, and in the absence of suitable mechanisms, individuals are not deterred from committing such crimes, particularly due to the huge financial and other benefits that they reap as a result of such activity. Bribery and corruption are commonplace in the modern world, due to major developments in the methods by which business transactions may be conducted.

The OECD Anti-Bribery Convention 1999 (Article 1) defines bribery as the offer, promise or giving of ‘any undue pecuniary or other advantage…to a foreign official…in order that the official act or refrain from acting in relation to the performance of official duties in order to obtain or retain business or other improper advantage’. Corruption is defined as the ‘abuse of entrusted power for personal gain’ (Transparency International UK, 2011, p. 3). While these definitions are contained in several conventions, there is interestingly no internationally accepted definition of bribery and corruption (Shacklock & Galtung, 2016). This is problematic because it results in inconsistent interpretation of these crimes in various legal systems. It also reveals a further important issue – that the development, impact and application of international law can be hindered by a lack of consensus on the definition of crimes, and also other matters, such as the degree of fault required to establish liability. As will be explored in greater detail in the following chapters, this supports the claim that a motivational cause of the perpetration of transnational financial crimes may be the lack of an international consensus on how they should be regulated, defined and implemented. The existence of international legislative frameworks, moreover, does not ensure that national laws will follow suit, or adopt a consistent approach globally (Dixon, 2013). This indicates the discrepancy that often exists between international and national law, which could be defined as a further motivational cause of the perpetration of transnational financial crimes. Although an international law may exist, if it is not incorporated effectively (or at all) into national law, then its impact and purpose is undermined. In the context of corruption, the occurrence of such crimes in the UK has been attributed to the failure of the UK to adequately incorporate international anti- corruption regulations into UK national law (Persson et al, 2013). This is perplexing because research shows that UK companies have a long-standing tradition of bribery for the purpose of winning public contracts and superseding national laws that they consider to be a hindrance to their success (Carr & Outhwaite, 2009).

This brief overview indicates the impact that transnational financial crimes can have, and also the problems that plague attempts to prevent such activities. National legislation is often influenced by broader, economic and political initiatives that seek to ensure a country’s position within the competitive global market (Brummer, 2015). This has hindered the development of an international legal framework on transnational financial crimes. In order to determine whether international or national laws have the biggest impact on the perpetration of transnational financial crimes, it is necessary to more profoundly examine a specific form of financial crime. Focus will therefore be directed towards fraud and corporate fraud.

We expect senior management to take clear responsibility for managing financial crime risks, which should be treated in the same manner as other risks faced by the business. There should be evidence that senior management are actively engaged in the firm’s approach to addressing the risks.

Self-assessment questions:

• When did senior management, including the board or appropriate sub-committees, last consider financial crime issues? What action followed discussions?
• How are senior management kept up to date on financial crime issues? (This may include receiving reports on the firm’s performance in this area as well as ad hoc briefings on individual cases or emerging threats.)
• Is there evidence that issues have been escalated where warranted?

Examples of good senior management practice

• Senior management set the right tone and demonstrate leadership on financial crime issues.
• A firm takes active steps to prevent criminals taking advantage of its services.
• A firm has a strategy for self-improvement on financial crime.
• There are clear criteria for escalating financial crime issues.

Examples of poor practice

• There is little evidence of senior staff involvement and challenge in practice.
• A firm concentrates on narrow compliance with minimum regulatory standards and has little engagement with the issues.
• Financial crime issues are dealt with on a purely reactive basis.
• There is no meaningful record or evidence of senior management considering financial crime risks.

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An Investigative Study into Causal Factors of the Perpetration of Transnational Financial  & Economic Crime (s)

Fraud and corruption are always evolving. Changes in methods, technology and other factors make it critically important those trying to prevent and detect it to evolve, as well. Part of that process is to analyse fraud, corruption, bribery, money laundering and other crimes through the lense of research and casework. When experts share their findings and their knowledge into the numerous laws and regulations that address fraud, everyone benefits – especially vulnerable businesses and other organisations. CRI Group has recently published three new whitepapers that provide insightful looks into issues at the forefront of fraud and corruption today. They range from deep dives into the U.S., U.K. and other anti-fraud and anti-corruption laws around the world, to close examinations of actual fraud cases that hold lessons for all of us. We invite you to download these whitepapers and increase your knowledge of fraud, corruption, proper compliance, risk assessments, due diligence and more.

As transnational financial crimes have increased over the past few years, attentions have turned to the need to more fully understand the motivations that lead to the perpetration of such crimes. US and UK law will be critically compared in order to determine the extent to which they can be deemed effective in preventing financial crimes. This comparative study will focus on corporate fraud in a bid to support the ultimate conclusion set forth; that weaknesses in national laws are a core causal factor in the perpetration of transnational financial crimes. This reveals the need to strengthen such laws in order to deter and prevent such criminal activity.

This whitepaper provides an in-depth study of transnational financial crimes and the national laws and regulations that govern them. Laws in the U.S. and the U.K, in particular, are compared and examined in terms of effectiveness in preventing financial crimes. The comparative study focuses on corporate fraud. “The Catalysts for Economic Crime” pursues the question as to how weaknesses in national laws can be considered “a core causal factor in the perpetration of transnational financial crimes.” Readers will learn about the need to strengthen such laws or risk continued and increased criminal activity. Different types of financial crimes are examined, including money laundering, due to its prominence as a form of transnational financial crime. The research provides a detailed discussion of the inadequacies in current national laws, and proposes solutions through increased accountability, compliance-focused on self-governance and heightened monitoring for violations, among other important considerations.[/vc_column_text][vc_row_inner][vc_column_inner width=”2/3″][vc_single_image][/vc_column_inner][vc_column_inner width=”1/3″][vc_btn][/vc_column_inner][/vc_row_inner][accordion_father][accordion_son title=”About CRI Group” clr=”#ffffff” bgclr=”#1e73be”]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,

In 2016, CRI Group 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.[/accordion_son][/accordion_father][/vc_column][/vc_row]

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We’re All Paying a High Price for Corporate Corruption

Corruption weakens governments, fuels organised crime, stifles economic growth and discourages development. International corruption continues to undermine the progress of developing nations as rogue politicians, civic leaders and corporate representatives conduct “business as usual” to bypass bureaucratic red tape or circumvent competitive processes. But the world is taking notice and punishing those organisations accused of corruption practices. From damaged corporate reputations that lead to brand and stock devaluation to negative investor perceptions, legal action and even jail terms for corporate directors, the high cost of corruption can have a lasting effect on even the most diligent organisations.

Companies worldwide can fall victim at any time to bribery and corruption practices, particularly those organisations with multi-national operations utilising vast networks of third-party agents, suppliers, distributors and consultants. Navigating the complex web of multi-jurisdiction laws and regulations around the world related to anti-bribery and anti-corruption practices can be daunting, exhausting financial resources and taxing personnel. But now there’s an all-encompassing solution for building strong global compliance frameworks and safeguarding your organisation from third-party risks.

Global efforts to fight bribery and corruption 

The past decade has seen a dramatic rise in the prosecution of organisations accused in bribery schemes. Often regarded in many regions as a standard operating procedure necessary to move business along, the practise of bribery is fast becoming a focal point for governments and global watchdogs’ intent on levying heavy fines and penalties for companies involved in the practice. In this situation which with the course of time, regional and international regulations are becoming stricter, particularly companies that are in the supply chain (importers, exporters, third-party service providers or indenters) for any foreign company.

Foreign companies are now being penalised if discovered that companies in their supply chain are involved in corrupt practices. These companies are increasingly complying with international laws such as the Foreign Corrupt Practices Act (FCPA), Malaysian Anti-Corruption. Commission (Amendment) Act 2018 introduced a new far-reaching corporate liability provision, the UK Bribery Act, Brazilian Clean Company Act. This progress intends to eliminate corruption from supply chains and third-party working relationships of foreign companies. Companies that are not complying with these laws are being panelised and prosecuted heavily.

ABAC® Center of Excellence Limited “ABAC Certification”

Anti-Bribery Anti-Corruption Center of Excellence Limited “ABAC Certification” was created to educate, equip and support the world’s leading business organisations with the latest in best-practice due diligence processes and procedures. We provide world-class services to organisations seeking to validate or expand their existing compliance frameworks to maintain a competitive edge in the world marketplace. The ABAC® Center of Excellence offers a complete suite of world-class services and solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments.

Bribery and Corruption Risk Management

ABAC Certification provides an expert audit of your existing risk management system to assess effectiveness and vulnerabilities while ensuring your organisation adequately complies with FCPA regulations, UK Bribery Act laws, Anti-Money Laundering regulations, and other global, regional and local regulations.

ISO 37001:2016 Certification

CRI Group offers independent global accredited ISO 37001:2016 certification to ensure that your organisation complies with this newly established standard, which is recognised and practised in more than 160 countries worldwide. Our auditors and analysts work with your team to develop policies, communications, training, monitoring and reporting measures that integrate seamlessly with your existing management processes and controls.

ABAC Certification & Strategies

ABAC® Certification’s exclusive Third-Party Risk Management-3PRM-Certified™ solution provides the very best in third-party bribery and corruption risk management, corporate compliance program, providing a proactive approach to mitigating risks from third-party affiliations and protecting your organisation from liability, brand damage and harm to the business. ABAC® presents innovative and globally accepted risk management solutions with an accredited corporate compliance program that can be applied to any organisation.

Becoming Compliant: The Benefits of ISO 37001 Certification

Because ISO 37001 is built around a set of generally accepted requirements, global organisations can become certified in the standard, utilising the services of an accredited third-party certifying body. Certification will add a distinct level of credibility to the organisation’s management systems and must be completed by a qualified, independent third-party specifically versed in ISO 37001:2016 certification. Becoming certified in ISO 37001 enables the organisation to demonstrate that it has adequate procedures in place to detect and prevent bribery on a multi-national level. Additionally, such certification:

• Ensures that the organisation is implementing a viable anti-bribery management program utilising widely accepted controls and systems.
• You are minimising corruption and bribery lawsuit likelihood.
• Lessening the possible litigation penalty through demonstrating an effective and adequate compliance program
• 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.
• Protects the organisation, its assets, shareholders and directors from the effects of bribery.
• Provides acceptable evidence to prosecutors or courts that the organisation has taken reasonable steps to prevent bribery and corruption.

Bribery continues to be a significant problem on a worldwide scale and conforming to an internationally recognised standard to combat the practice while promoting ethics in business will help organisations succeed in the ever-expanding global marketplace. Contact us today to learn more about safeguarding your organisation from the outside risks associated with multi-national business affiliations.

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25 Benefits of ISO 37001:2016 ABMS Certification

How to fight bribery and corruption?

Bribery and corruption are a dent on the image of any company. It is an unwanted and unsightly reflection that can be not only be mitigated but prevented in the organisation. The negative representation might result in a loss of trust among customers, affiliates and business patrons. In addition, the lack of internal anti-bribery controls and procedures has been one of the key reasons for deficiency in productivity inside global organisations. ISO 37001 ABMS

To combat these adverse effects, a strong standard is needed where governance, risk management and compliance (GRC) procedures are at the heart of the system. ISO launched ISO 37001:2016 ABMS standard – a global benchmark in the Anti-Bribery Management System (ABMS) which detects, protects and addresses the issues of bribery and corruption in the corporation. It is an assurance of employing the highest ethical standards and harnessing transparency even in the most complex business activities.

What is ISO 37001:2016 ABMS certification?

ISO 37001:2016 ABMS certification demonstrates organisation’s commitment to upholding the best practices in the corporate world. Being a framework that measures, identifies and controls the level of transparent commercial performance combined with international guidelines, it is applicable for all kinds, sizes and natures of organisations By adopting the ISO 37001:2016 ABMS certification, companies, subsidiaries and other affiliates are able to shield themselves from the dent that can tarnish their reputation and decrease their proficiency in the industry.

Through the implementation of ISO 37001:2016 certification, your organisation can cultivate a better anti-bribery and ethics culture along with the trust within the establishment. By adopting the ISO 37001:2016 certification, organisations will be able to combine the GRC strategies with the ISO system across all departmental units in a transparent and operative manner. Built with a set of globally accepted requirements, the ISO 37001:2016 certification is compliant with global, regional and local anti-bribery regulations worldwide, which increases the multi-level integrity of the association.

What are the benefits of ISO 37001:2016 ABMS Certification?

ISO 37001:2016 ABMS certification includes audit assessment procedures, to utilise the application and maintenance of a robust anti-bribery program. Being an all-encompassing standard that is integrated with other management systems, the ISO 37001:2016 ABMS certification provides several benefits:

• Competitive advantage over other organisations
• Greater awareness on the output of bribery
• Enhanced aptitude for the prevention of corruption
• Expansion of business opportunities
• Continual improvement of services and products
• Enhancement of the organisation’s reputation
• Facilitation of efficient management operations
• Apt demonstration of legal compliance and assurance
• Reduction in structural and miscellaneous costs
• Escalation of organisational assets
• Better implementation of compliance programs
• Precise execution of significant measures
• Increase in business efficiency and effectivity
• Superior trust and transparency
• Reduction of malpractice and other hazards
• Protection of resources and other capitals
• Easy integration to existing management systems
• Appropriate utilisation as a due diligence evidence
• Accurate evaluation of organisation’s position
• Recognition and deterrence of immediate threats
• Placement of adequate procedures to combat risks
• Timely observation and development of controls
• Execution of feasible anti-bribery procedures
• Practice of internationally recognised processes
• Establishment of ethical global practices

How can your organisation attain ISO 37001: 2016 ABMS certification?

With the list of returns that ISO 37001:2016 ABMS certification holds, its value is undeniable. The cost and benefits of not adopting a viable Anti-Bribery Management System are far greater than the cost of its implementation. Dedicate your time, energy and capital towards your organisation’s growth and progress. By engaging with a qualified, trained and independent third-party certification body, your company is securing its future against losses and gaining a surplus of rewards. The Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence is looking forward to connecting with you and steering your organisation towards the espousal of ISO 37001:2016 ABMS certification. Provide your company with the credibility to go beyond and reach its envisioned destination. For more information, please feel free to contact our team and visit our website www.ABACgroup.com.

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, 

In 2016, CRI Group 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: Anti-Bribery Anti-Corruption Solution, Compliance Solution, ISO 37001, Resources by admin
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