November 2017 - Kinstellar’s Compliance, Risk and Sensitive Investigation practice group, led by Prague-based Partner Jitka Logesová, hosted its annual executive dinner in Prague on November 2nd on the risks companies and financial institutions face in CEE & CIS.
This year we benefited from exceptional keynote speakers – Michaela Ahlberg, the chief ethics and compliance officer at Telia Company AB, and Ulrich Bergmoser, the CFO of the German Football Association, DFB GmbH (Deutscher Fußball-Bund).
Yesterday, Charles E. Cain, the newly appointed chief of the US Securities and Exchange Commission to enforce the Foreign Corrupt Practices Act (FCPA) commented that leveling the playing field is important to him. This comment triggered lot of attention. It is unclear whether he meant that FCPA enforcement towards foreign companies would increase. Well, we will see.
Michaela Ahlberg spoke about the recent settlement between Telia Company and the US Department of Justice (DOJ), under which Telia Company agreed to financial sanctions of USD 965 million. Of course, one obvious question asked by our guests was how is it possible that a Swedish company is paying sanctions to the US government for bribery in Uzbekistan? So we discussed in depth the US (at courts) untested extraterritorial reach of US legislation, and the FCPA in particular, but we mainly concentrated on how Telia Company responded to the investigation and what were the lessons learned.
Michaela’s task was to drive change, establish an ethics and compliance office, and implement an effective anti-bribery programme. She built a special investigations office, introduced and implemented an anti-bribery corruption compliance programme to match the higher standards of effectiveness and adequacy. Together with Telia Company and its legal team she negotiated a deferred prosecution agreement with the DOJ/SEC in the US and with Dutch and Swedish authorities. For the recent creation of its strong anti-bribery and corruption compliance programme, Telia Company got full recognition, a deduction of 25 per cent for cooperation, remediation and for its effective ABC compliance. The ABC programme was evaluated to be of such high quality that appointing a monitor was deemed unnecessary. So to invest into compliance obviously saves lot of money.
The second keynote speaker was Ulrich Bergmoser, CFO of the DFB. Ulrich has a very interesting auditing and private equity background. He was appointed the DFB’s first compliance officer, where he implemented and integrated its first compliance management system. Ulrich proved to be a great discussion leader with both our private equity clients and other attendees, with whom he quickly found a common language. He was able to share his experience with building up an effective compliance system. Unlike in the US or UK, there are no specific governmental guidelines for building an effective compliance system in Czech Republic (of course there are many resources which can be consulted, including the ISO 37001 & ISO 19600 standards) therefore, any experience with building up this kind of system is extremely valuable.
Filip Zelingr, executive director audit, risk, compliance at Český Aeroholding, a.s. and Ulrich Büchsenschütz from Thomson Reuters, helped to steer the discussion around topics like how to build up an effective compliance system to protect a company’s reputation and to avoid criminal and civil responsibility – not only for companies but also for board members. Although the number of prosecutions of Czech companies is steadily rising (in 2012 when the act on strict corporate criminal liability became effective there were nine criminal proceedings against companies were launched; in 2016 there were 327) the penalties are relatively moderate; that said, the biggest threat to companies is the damage that can be done to their reputations. And maintaining a good reputation seems to be the biggest motivating factor for companies and financial institutions to comply with the regulations.
We are looking forward to our next annual Executive Dinner Discussion in 2018!
For further information please contact Jitka Logesova, Head of Compliance, Risk & Sensitive Investigation, at .