The FSA has recently amended their Anti-Bribery and Corruption guidance. This follows a review of how investment banks and firms carrying on investment banking or similar activities in the UK mitigate bribery and corruption risk.
Some key areas of additional guidance from the FSA include:
Ensuring that anti-bribery and corruption policies adequately address all areas of bribery and corruption risk to which a firm is exposed. Examples of areas to consider include: expected standards of behaviour; escalation processes; conflicts of interest; expenses, gifts and hospitality; the use of third parties to win business; whistleblowing; monitoring and review mechanisms; and disciplinary sanctions for breaches.
A strengthening of guidance when undertaking Risk Assessments related to Bribery and Corruption, including: taking adequate steps to identify the bribery and corruption risk, for example by using a range of expertise from both within and outside the business. Furthermore, these risk assessments should inform the development of monitoring programmes; policies and procedures; training; and operational processes that help mitigate the risk.
A key part of role management is understanding which roles and functions within the organization are at higher risk from a bribery and corruption perspective, and ensuring that they have clear training and guidance. A review of remuneration practices is also important to ensure that they do not encourage risk taking.
Where there is no whistle-blowing procedure, firms should consider measures to allow staff to raise concerns anonymously, with adequate levels of protection and this should be communicated clearly to staff.
While it was noted that many banks and financial institutions had put in place significant work to address bribery and corruption, there were still a number of weaknesses. These related in particular to:
- limited understanding of the applicable legal and regulatory regimes
- incomplete or inadequate bribery and corruption risk assessments
- lack of senior management oversight
- failure to monitor the effective implementation of, and compliance with, anti-bribery and corruption policies and procedures.
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Image credit: FSA