Taras Shevchenko St. 21A, Office 505, Tashkent, Uzbekistan 100060

November 28, 2018 Compliance Committee initial meeting

For international business, especially multinational companies that operate globally, compliance is an important aspect of their activity. The failure to comply to the rules can have severe consequences for businesses. The best practices are stipulated by several legislative acts, which include the Foreign Corrupt Practice Act (FCPA) introduced in the USA in the 1970s and the EU’s main legislative act introduced by the GDPR in May of 2018. The FCPA enforced anticorruption and compliance and was significantly complemented by the GDPR. Both are wide ranging and apply to anyone doing business in the US and the EU and with US and EU citizens and entities.
Companies found guilty in violation of compliance rules are subjected to criminal or civil actions that include fines, suspension, exclusion of licenses and government contracts as well as other penalties. Liable employees, compliance managers and directors can also be subject to prison sentences. Penalties vary from $2 million per violation (which could apply to each illegal payment) for a company, and $250, 000 and/or up to 5 years of imprisonment for each violation for culpable individuals. Violation of books and records and internal control provisions can be a subject to criminal fines up to $5 million and imprisonment for up to 20 years for culpable individuals.
The Department of Justice (DOJ) is responsible for criminal and civil enforcement of provisions. The Securities and Exchange Commission (SEC) is responsible for civil enforcement of cases related to securities and issuers required to file reports with the SEC. Both the DOJ and the SEC cooperate with federal agencies, like Federal Bureau of Investigations (FBI) and other law enforcement partners to investigate potential violations.
Therefore, it is important that all employees be informed about compliance rules, adherence to the rules and how to report violations. In other words, it is easier to prevent than pay for violations.
Ms. Keeton, Compliance Counsel for VEON Ltd., one of the world’s largest telecom providers based in the Netherlands, was a speaker at the first AmCham in Uzbekistan Compliance Committee meeting. Being responsible for internal reporting and investigations, Ms. Keeton shared company’s policy in this sphere, best practices of the company and techniques of employees to Speak Up. Ms. Keeton advised that the main resource used for the compliance is NAMEX, where one could find global statistics, trends and legislative updates among others.
It was interesting to learn that the number of reports in 2018 has increased by 10% in five main categories. These categories include: 1- Accounting, auditing and financial; 2- Business Integrity;3- HR, Diversity, Workplace respects; 4- HSE and 5- Misuse, Misappropriation of Assets. Participants discussed different channels for Speak Up, among which online reports are the most popular.
The issues of compatibility of US and European anti-corruption laws with local criminal and administrative procedures and the effort it took to find solutions was discussed. Another issue is industry specific regulations. They can be among the most complex challenges that vary significantly in different jurisdictions. They require a great deal of effort in compliance. The financial sector is a good example of this type of challenge. There are huge numbers of laws that vary from country to country, and the fines for falling out of compliance with them can be huge. This becomes especially complex when laws contradict one another, or products vary in different locations.
It was agreed that the committee should meet regularly for multinational and local company of different industries, including telecommunications and finance, can share their best practices. For an update of future meetings please follow the committee’s news at the AmCham web-site and Facebook and Instagram pages.