Page 42 - CCCA Magazine Winter 2017

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tHe elusive Anti-BriBerY CompliAnCe

internAl Controls: pArt 4

By Isabelle Pierre

This four-part series explores how in-house counsel can ■ All transactions should be properly re-
design and implement effective anti-bribery controls without corded in the organization’s books and
records.
signifcantly expanding resources. Part 3 of this series explained ■ All documentation created or used in
how to identify the preventive internal controls required to support of the anti-bribery compliance
program should be adequately retained.
adequately address the risk profle of a business. This fnal part ■ Training on the policies and proce-

reviews how to implement those internal controls in an effective dures should be provided to all affected
employees on a periodic basis.
manner, and how to design and implement detective controls. Other common controls include the
following:
■ Restrictions and control on retention
update policy and procedure Framework Counsel in such situations will want to and use of intermediaries who may
Once the risks inherent to the business in leverage the expertise of the employees who have dealings with government off-
question and the required internal con- will be applying the internal controls by task- cials. Such intermediaries may include
trols have been identifed, the organiza- ing them to create the procedures and work sales representatives, agents, distribu-
tion’s policy and procedure framework instructions relevant to their area of work. tors, custom brokers and freight for-
needs to be updated to capture both the Counsel can simply prepare a description of warders. Their retention will typically
behaviour expected from employees and the result the procedure should achieve, and be subject to specifc approval and due
the administrative processes that support then review the fnal product to ensure it diligence, and the terms and condi-
the compliance requirements. meets the stated requirement. The legal de- tions of any engagement with such in-
Organizations typically choose to seg- partment retains ownership of the require- termediaries will include appropriate
regate employee obligations in a multi- ment, or the result to be achieved, while anti-bribery representations.
tiered written directive system. The frst the affected departments own the means to ■ Reimbursement of travel expenses.
tier, policies, captures general behaviour achieve that result. This method allows the Travel policies and procedures should
expectations from the employee popu- creation of the procedural framework with- establish levels of authorized expenses
lation. Policies should be easy to under- out requiring signifcant legal resources and and the process for seeking reimburse-
stand and available to all employees in increases employee engagement in the com- ment from the company. Such process-
their native language. The second tier, pliance program. It is particularly useful for es will typically involve management
procedures, typically details the admin- organizations with multiple sites, as it allows approvals, submission of substantiat-
istrative processes to be followed by em- each site the fexibility to tailor and embed ing documentation and timely sub-
ployees seeking to engage in an activity or the compliance processes in their existing, mission of expense reports. Expense
enter into a transaction subject to internal often unique business processes. approval records will typically identify
controls. Finally, the third tier, work in- the recipients of funds and the busi-
structions, outlines the steps to be taken Common Controls ness purpose of the expenses.
by the employees approving or processing The following requirements typically ap- ■ Gratuities and hospitality. Policy
controlled activities. ply broadly to all organizational activities: should set limits on the value of per-
Most legal departments do not have ■ Authority to make commitments on be- missible gifts, travel and hospitality
the resources or expertise to translate half of the organization should be clearly (including transportation) offered to
their policies into procedures or work in- defned with suffcient level of granular- government offcials. Gift and hospital-
structions. Anti-bribery controls are often ity by a written delegation of authority. ity should only be offered for legitimate
fnancial in nature and their implementa- ■ Authority to approve and execute a purposes. Transactions falling outside
tion often requires pointed expertise in transaction should be segregated. of permissible parameters should be
the operation of an organization’s fnance ■ All approvals to enter into a transac- subject to specifc approval. Consider-
department—knowledge most in-house tion should be based on supporting ations should be given to setting fre-
counsel do not possess. documentation. quency limits and aggregate amount

42 CCCa MaGazine | WinTer 2017 hiVer