Compliance Experts Research Articles

562 AI Translation Advisory Board: Mastering team science to facilitate implementation of AI into clinical practice

OBJECTIVES/GOALS: Healthcare sectors are rushing to develop AI models. Yet, a dearth of coordinated practices leaves many teams struggling to implement models into practice. The Enterprise AI Translation Advisory Board uses across-disciplinary team to facilitate AI translation. METHODS/STUDY POPULATION: The Mayo Clinic Enterprise AI Translation Advisory Board was established to assess AI solutions lever aging cross-disciplinary team science to accelerate AI innovation and translation. The 23-member board reflects expertise in data science, qualitative research, user experience, IT, human factors, informatics, regulatory compliance,ethics, and clinical care, with members spanning thought leadership, decision-making, and clinical practice. Taking an approach of respectful communication, transparency, scientific debate, and open discussion, the Board has consulted onover two dozen projects at various stages of the AI life cycle. RESULTS/ANTICIPATED RESULTS: Common issues identified for projects earlier in the AI life cycle, sometimes fatal but often address able once identified, include a lack of buy-in from potential product users, a lack of planningabout integration into clinical workflow, inadequately labeled data, and attempting to use machine learning when what is desired is really a causal model for intervening. Recommendations for projects later in the AI life cycle include details of a testing plan (silent evaluation, pragmatic clinical trials), advice about clinical integration, both post-hoc and on going auditing for performance disparities, and planning for regulatory clearance. DISCUSSION/SIGNIFICANCE: Advising is more valuable for projects at the ideation phase, when multi disciplinary interrogation can identify weaknesses. But at all phases, projects have gaps related to a lack of specific disciplinary expertise. A multi disciplinary cluster like the AI Translation Advisory Board seeks to address these gaps.

Evolved Roles and Sustainability Challenges for Boards in 2024

Christine Spadafor is an experienced management consultant with expertise in risk management, regulatory compliance, ESG, and DEI, as well as extensive experience serving on the board of directors of various institutions. In this article, she discusses how to balance short‐term and long‐term goals for sustainability, and the evolving roles and responsibilities of a board of directors.

Terrorist financing via the banking sector

Islamist terrorism poses a significant threat to global security. Current prevention measures focus largely on combating terrorist financing in order to hinder terrorist organizations’ ability to pay their fighters and orchestrate attacks, with the aim of weakening their structures. The banking sector in particular is subject to strict regulations that intend to increase transparency and identify suspicious transactions. However, the present study illustrates that the banking sector continues to offer opportunities for terrorist financing. Using a qualitative study of 15 presumed providers of illegal financial services and 15 compliance experts to detail how terrorist financiers abuse the financial system to fund terrorist organizations, this paper has implications for both compliance officers and regulating authorities. In particular, the perceived challenges facing those at the frontline of the banking sector in detecting and preventing terrorist financing are analyzed with the intention to establish avenues for future research and countering the financing of terrorism regulation.

Other schools’ recent major infractions offer lessons to help you steer clear of violations

ORLANDO, FLORIDA — Just hearing about another school getting into trouble for a major infraction can make you cringe as you hope your athletics department doesn’t suffer the same fate down the line. You can help your school steer clear of violations by reviewing the lessons learned from recent major infractions, as discussed by a panel of compliance experts at the annual convention for the National Association for Athletics Compliance. Alex Breske, Assistant Athletics Director for Risk Management and Policy at Michigan State University, moderated the panel, which included Christian Dennie, Esq., Partner with Fox Rothschild LLP; Dee Kennedy, Associate Director at the NCAA; Matt Mikrut, Managing Director of the Office of the Committee on Infractions at the NCAA; and Michael Sheridan, Esq., Senior Counsel with Bond, Schoeneck & King, LLP, and a former member of the NCAA enforcement staff. The following excerpt of their discussion was edited for space and clarity.

Compliant or not compliant? The challenges of anti-money laundering regulations in crypto assets: the case of Switzerland

PurposeCriminals have quickly discovered the advantage of crypto assets, with its pseudo-anonymity, untraceability and the ability to freely exchange crypto assets across borders, which makes it an ideal tool for money laundering activities. Switzerland has a technology-neutral framework, and crypto assets are regulated by the existing anti-money laundering (AML) legislation. The purpose of this paper is to gain insights into the industry adoption of measurements to prevent money laundering through crypto assets and if they are compliant with national and international AML regulations.Design/methodology/approachSemi-structured expert interviews were conducted with participants having expertise in compliance, AML and crypto assets with focus on Switzerland. The interviews were analyzed using the thematic analysis.FindingsThe experts have a general consensus that Switzerland is a pioneer when it comes to regulating crypto assets. It is perceived that legislations are released without industry consultation and that AML processes for fiat transactions also work for crypto assets, which is not the case. The results show that the industry wants a consortium to fight money laundering in crypto assets in Switzerland. The current measures to identify money laundering are not optimal, yet, it is the best solution and according to national and international regulations the businesses are perceived to be compliant.Originality/valueThis paper offers new insights on the challenges of AML regulations in crypto assets, given the limited information available. It also provides good practice examples for addressing these challenges, benefiting policymakers, regulators and practitioners in the crypto asset ecosystem.

Compliance – The ‘Achilles heel’ of protected areas

Recent trends for rapidly establishing large protected areas demonstrate ongoing global interest in protected our remaining natural environments. However laudatory, these efforts rely on a significant, but uncertain assumption: that this protection will be effective. Unfortunately, many past efforts have been ineffective due to numerous types of implementation failures. We focus on one of the most pervasive and notoriously difficult reasons for failure - the inability to substantially reduce ongoing non-compliance in protected areas. We contend that this globally prevalent phenomenon is a symptom of fragmentary, reactive efforts to address compliance issues. This is best addressed by developing a rigorous, systematic approach to compliance management in protected areas. We are working with a team of compliance experts to finalise such a framework and approach, which will serve as the first step in an ongoing journey and discussion, as well as a cornerstone for building a global community of practice to address this issue.

Rule of law vis-à-vis foreign market entry modes: exploratory interviews of a few experts

PurposeThe purpose of this qualitative paper is to identify and amplify the voice of those experts who advise practitioners faced with foreign market entry decisions. This paper reports the importance that experts place on the rule of law, a positive ethical climate in host nations and the experts’ knowledge of investment financial performance after five years of the initial foreign market entry.Design/methodology/approachThe sample included 12 experienced expert professional interviewees who spent careers with publicly held multinational corporations, attorneys who advised multinational corporation officers, arbitrators with significant international dispute resolution experience, corporate ethics compliance experts, small global entrepreneurial business owners and an academic specializing in international commercial law and dispute resolution.FindingsThe rule of law and ethical climate significantly influence private market entry mode, dispute resolution choices and the likelihood of financial success. Finally, the findings illuminate the importance of the rule of law and a positive ethical climate in private foreign market entry decisions and their managerial and policy implications.Originality/valueThis study lays the foundation for the development of propositions to understand better the significant role of the rule of law in the private foreign investment decision-making process and the financial performance of the foreign investment.

Neither Carrots nor Sticks: DOJ's Unfulfilled Commitment to Corporate Health Care Compliance

The Department of Justice (“DOJ”) has for decades sought to encourage four compliant behaviors in corporate actors: maintenance of an effective pre-existing compliance program, post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. While DOJ’s public statements reflect a claimed commitment to all four, analysis of DOJ policy and resolved cases makes clear that as DOJ has increasingly prioritized and incentivized the latter three behaviors, the first—maintenance of an effective pre-existing compliance program, the only one aimed towards stopping fraud before it occurs—has been cast aside in one of DOJ’s highest-profile enforcement areas.In criminal prosecutions, both DOJ policy and the United States Sentencing Guidelines (“USSG”) consider pre-existing compliance programs in determining whether a business entity should be prosecuted and the amount of a fine if a prosecution does occur. DOJ’s Criminal Division has hired compliance experts and enthusiastically publicized internal training aimed at improving prosecutors’ ability to evaluate corporate compliance programs. For the health care industry, however, the civil False Claims Act (“FCA”) is DOJ’s primary enforcement tool, and neither that DOJ policy nor the USSG apply. Instead, in civil cases DOJ guidance has been opaque or non-existent, offering little clarity as to how, if at all, DOJ will consider pre-existing compliance programs when resolving FCA cases. This is particularly surprising given that health care compliance has evolved over decades into a major industry not only with sophisticated and expensive corporate programs, but the subject of increasingly frequent and hands-on DOJ public statements and guidance.This article is the third in a series analyzing civil FCA resolutions, looking not only at DOJ’s stated policies but at actual outcomes through review of a data set of resolved cases against health care entities. Until now, those analyzing the extent of benefits for corporate compliance programs have focused on criminal cases, particularly those under the Foreign Corrupt Practices Act and primarily focused on the potential for a compliance defense to criminal liability. Surprisingly, the literature has to-date failed to analyze the question in the context of the FCA and thus the health care industry despite its supremacy as a DOJ enforcement target and although the FCA’s mens rea standard is more likely to sweep in cases where applying a compliance benefit would further DOJ’s enforcement goals.With health care enforcement gaining increased attention in the wake of government spending relating to COVID-19, and additional visibility into DOJ settlement policy now possible due to a change in the tax code, DOJ’s current failure to reward pre-existing compliance programs in FCA resolutions puts DOJ’s enforcement goals at risk, potentially demotivating corporate actors and adding to skepticism about DOJ’s motivations and the legitimacy of the enforcement regime, as it prevents DOJ from separating the most culpable corporate actors from those less worthy of condemnation. It is also a missed opportunity, as the large quantity of health care resolutions provides the potential for industry to learn from others’ compliance successes and failures, and for DOJ to encourage advancements as it claims to desire to do.

Terrorist Financing via Money Transfer Systems

Abstract With the rise of the Islamic State and the corresponding war in Syria, which has caused an international refugee crisis, the combat of terrorism has, again, become a major goal for European authorities. One popular approach to the combat of terrorism is to interrupt the funding of terrorist organisations. Whereas other studies have focused mainly on the implementation of prevention measures, this study investigates terrorist financing methods from the offender’s perspective with a focus on so-called money transfer systems to reveal weaknesses in the regulation of terrorist financing in general and money transfer systems in particular. For this purpose, qualitative interviews with 15 presumed providers of illegal financial services and 15 European compliance experts were conducted. This paper has implications for law enforcement, regulatory authorities, investigators and financial service providers. Innovative measures such as the use of electronic surveillance and expanding the jurisdiction of undercover agents are suggested.

Case Study on a Potential Application of Failure Mode and Effects Analysis in Assessing Compliance Risks

Assessing and reducing compliance risks can now be considered one of the core criteria for business success. While failure mode and effect analysis (FMEA) is widely used in engineering, its application in the financial sector is quite novel, primarily related to compliance risk assessment. This paper presents the results of exploratory research based on the potential application of FMEA in a focus group of compliance experts at one of the largest Central and Eastern European commercial banks. This study aims to establish a process for assessing compliance risks that builds on the strengths of both the qualitative and quantitative assessment methods. Applying FMEA based on a nominal group technique and further statistical analysis provides an opportunity to compare expert assessments and the consensus level of the participants. As a result, the similarity or difference of the assessment patterns can be quantified, providing objective feedback on the evaluation. Finally, this paper proposes lifting the detectability of failures as an evaluation dimension to the same level of importance as the probability and impact of non-compliance and using agreement testing statistical methods.

Public procurement and corruption during Covid-19: self-monitoring and whistleblowing incentives after Srebrena Malina

Crises and emergencies tend to increase opportunities for corruption in public procurement. This article shows how the Covid-19 pandemic has given rise to new corruption opportunities and how regulators are trying to combat these, using the example of the case of the Bosnian raspberry firm Srebrena Malina. The literature review concludes that prevention mechanisms focus on the legal and regulatory aspects without considering firms’ perspectives. In contrast, an approach based on summary content analysis may help firms develop potential self-monitoring solutions that they can apply to ensure compliance with anti-corruption regulations and avoid sanctions. Explorative expert interviews with ten international compliance experts are also conducted. The findings illustrate that whistleblowing incentives could foster compliance with existing regulations and policies in public procurement. This article advocates a more consequential implementation of the current anti-corruption and public procurement regulations alongside self-monitoring measures in the form of whistleblowing incentives.

Defending Weapons Inspections from the Effects of Disinformation

The intentional spread of disinformation is not a new challenge for the scientific world. We have seen it perpetuate the idea of a flat earth, convince communities that vaccines are more dangerous than helpful, and even suggest a connection between the “5G” communication infrastructure and COVID-19. Nor is disinformation a new phenomenon in the weapons inspection arena. Weapons inspectors themselves are often forced to sift through alternative narratives of events and inconsistent reporting, and they regularly see their credibility and conclusions questioned in the face of government politics or public biases. But certain recent disinformation campaigns have become so overwhelmingly comprehensive and effective that they constitute a new kind of threat. By preventing accountability for clear violations of international law, these campaigns have created a challenge to the survival of arms control treaties themselves. If weapons inspectors cannot regain the trust of the international community in the face of this challenge, it will be increasingly difficult to ensure compliance with arms control and disarmament treaties going forward. In this essay, I will briefly discuss one of the most comprehensive disinformation efforts of the past decade: the disinformation campaign used to prevent accountability for Syria's repeated use of chemical weapons. After this discussion, I will propose one possible approach to help protect the credibility of disarmament experts and weapons inspectors in the face of pervasive disinformation. This approach will require a concerted effort to connect and support compliance experts and to understand and explain their expertise across cultural, political, national, economic, and religious divides.

The regulatory technology “RegTech” and money laundering prevention in Islamic and conventional banking industry

This study aims to illustrate the impact of adopting Regulatory technology (RegTech) innovations in banks on money laundering prevention effectiveness using Bahrain as a case study. Bahrain has strived to position itself as the banking center of the Arabian Gulf, hence the results of this novel research are informative of the practices in the region. The primary data for this study was collected through a survey instrument distributed to 100 bankers working in Bahrain with expertise in compliance. The results of multivariate analysis indicate that transactions monitoring through RegTech and cost- and time-saving aspects of RegTech, drive money laundering prevention effectiveness to a highly statistically significant extent. However, electronic know your customer (KYC) technologies are insignificant as drivers. This research not only sheds light on the efficacy of RegTech but also raises general awareness concerning the adoption and integration of RegTech platforms for fighting money laundering. In particular, the findings provide specific insights about the deployment of RegTech capabilities in banks in regional banking centers of modest scale.

Extractive industries, corruption and potential solutions. The case of Ukraine

Ukraine's apparent predisposition for corruption is frequently criticized. This article gives an overview of corruption with a focus on the extractive industries and illustrates reasons why its elimination is desirable for both governments and corporations by using the example of Ukraine. Based on a qualitative study of ten interviews with international compliance experts, this study suggests that companies in the extractive industries should consider implementing compliance incentives to avoid the negative repercussions of corruption in the sales process and comply with anti-bribery regulations. This qualitative study analyses how employees of multinational corporations in the extractive industries could be discouraged from paying bribes to government officials. The study contributes to the existing literature by suggesting novel, immediate alternatives to current compliance measures and formal rules, which seem negligible.

Cryptocurrencies and financial crime: solutions from Liechtenstein

Purpose The purpose of this paper is to illustrate how cryptocurrencies are being used as a vehicle for financial crime (such as money laundering, terrorist financing and corruption) and propose a more effective international standard for regulation that uses the Liechtenstein blockchain act as a benchmark. Design/methodology/approach This paper investigates how cryptocurrencies facilitate financial crime through a qualitative study consisting of interviews with 10 presumed providers of illegal financial services and 18 international compliance experts. Findings This study shows that cryptocurrencies are a highly suitable vehicle for money laundering, terrorist financing and corruption and that current compliance efforts in the cryptocurrency sector are ineffective. Research limitations/implications The presented findings illustrate that for a more effective combat of financial crime via cryptocurrency, an international standard for blockchain and cryptocurrency regulation must be created. This paper suggests that Liechtenstein’s innovative and comprehensive blockchain act could be used as a basis for said standard. Practitioners should also consider cooperating transnationally when prosecuting financial crime via cryptocurrency. Originality/value The fact that cryptocurrencies facilitate financial crime is widely known. However, this study combines the perspectives of both compliance experts and presumed criminals to gain a comprehensive understanding of the techniques that money launderers, terrorist financiers and corrupt public officials use. This paper examines the potential for the innovative Liechtenstein blockchain act, which has, thus, far not received empirical attention, to set the benchmark for international regulations.

Current developments in money laundering and terrorism financing

PurposeWhilst the existing literature focuses on developing prevention mechanisms for banks, this paper aims to demonstrate the ongoing feasibility of money laundering and financing terrorism undetected. This study thereby reveals that the current anti-money-laundering and anti-terrorism-financing mechanisms can easily be circumvented.Design/methodology/approachA three-stage research process was used, including both qualitative and quantitative methods. The empirical findings are based on a qualitative content analysis of 50 informal interviews with illegal financial services providers and 50 formal interviews with compliance experts and law enforcement officers.FindingsDuring these interviews, specific methods of financing terrorism and limiting the risks of being prosecuted were discussed. Hence, specific methods of money laundering and terrorism financing have been analyzed.Research limitations/implicationsThe findings thus convey only the perspectives of the 100 interviewees, such that generalizability is limited.Practical implicationsThe practical implications include suggestions for financial regulators, financial institutions and compliance officers on how to more effectively combat money laundering and terrorism financing. Although the empirical findings are limited to Europe, the results could be applied globally.Originality/valueThis paper reveals new insights about criminals’ actions, which help to develop more effective compliance mechanisms.

Gaming Environmental Governance? Bribery, Abuse of Subsidies, and Corruption in European Union Programs

In order to incentivize different actors to comply with environmental laws, the European Union pays out US$65 billion a year in subsidies — three times as much as the United States. Although these subsidies are bound to certain prerequisites, this article demonstrates how farmers, businesses and corporations use bribes to circumvent these guidelines while continuing to receive subsidies. For this purpose, several recent cases of subsidy abuse are discussed within the scope of the literature review. It is shown that especially central and eastern European countries seem to struggle with deficiencies in the process of delivering cost-effective solutions to environmental challenges. Furthermore, the EU legal framework and cultural aspects regarding corruption are examined. It is also demonstrated that measures for the effective combat of corruption have thus far not been discussed in depth by researchers. Due to this identified research gap, a qualitative study, during which interviews with select compliance experts were held, was conducted. Based on the study's findings, the article suggests that compliance bonuses could be a valid approach to the elimination of corruption and subsidy abuse in the EU. It is argued that this innovative approach could improve current practices in central and eastern Europe, which are shaped to a large extent by corruption. In the light of rapidly progressing climate change, it is of radical importance that the European Union addresses subsidy fraud and how local agencies can enforce compliance, so that funds are used in a manner that is fully proportionate to the objective sought.

Whistleblowing Incentives

Purpose The purpose of the paper is to illustrate how companies may benefit from whistleblowing and how whistleblowing may be incentivized to more effectively combat corruption. Design/methodology/approach No clear hypothesis could be formulated based on the literature review. Therefore, an explorative approach was selected for the purpose of this study. Ten selected compliance experts were interviewed, and the results were subjected to summarizing content analysis. Findings It was found that corruption, particularly bribery, continues to be prevalent in many corporations and that current anti-bribery incentives are rather inefficient. It was also found that whistleblowing incentives have thus far not been investigated in sufficient depth in the literature, despite the fact that they can be immensely useful in combating corruption. Research limitations/implications Interviews with different experts, at different times, or selecting experts from different locations could have led to diverging results. Practical implications Incentive systems, particularly whistleblowing incentives, can be designed to prevent corruption in multinational corporations. Originality/value This study explores a new field and develops innovative theory to gain a deeper understanding of whistleblowing.

Money-laundering and terrorism-financing compliance – unsolved issues

PurposeThis paper aims to focus on developing prevention mechanisms for banks, this paper shows the ongoing feasibility of laundering money and financing terrorism undetected. It, thereby highlights that the current anti-money-laundering and anti-terrorism-financing mechanisms can be easily circumvented.Design/methodology/approachA three-step research process, including both qualitative and quantitative methods, was used. The empirical findings are based on qualitative content analysis of 35 informal interviews with illegal financial services providers and 35 formal interviews with compliance experts and law enforcement officers.FindingsDuring those interviews, concrete and specific methods of financing terrorism and limiting the risks of being prosecuted were discussed. To assess compliance officers’ awareness of those methods, a quantitative survey of 190 compliance officers was subsequently conducted to determine what leads to investigations.Research limitations/implicationsThe findings only convey the perspectives of the 70 interviewees and 190 survey participants.Practical implicationsThe practical implications include suggestions for financial regulators, financial institutions and compliance officers on how to more effectively combat money laundering and terrorism financing.Originality/valueWhile the empirical findings are based in Europe, the results could be applied globally.

Combatting the financing of terrorism in Austria, Germany, Liechtenstein and Switzerland

PurposeWhilst the existing literature focuses on developing prevention mechanisms for banks, this paper aims to show how feasible it still is in Austria, Germany, Liechtenstein and Switzerland to finance terrorism without getting detected.Design/methodology/approachA three-step research process, including both qualitative and quantitative methods, was applied. The empirical findings are based upon qualitative content analysis of 15 informal interviews with illegal financial services providers and 15 formal interviews with compliance experts and law enforcement officers.FindingsDuring those interviews, concrete and specific methods of financing terrorism and limiting the risks of facing a criminal prosecution were discussed. The interviews were analyzed based upon a qualitative content analysis. To assess the risk, which criminals, a quantitative survey among 181 compliance officers was conducted to determine what leads to investigations.Research limitations/implicationsThe findings are limited to the 30 interviewees’ and 181 survey participants’ perspective.Practical implicationsThe practical implications include suggestions for providing law enforcement and intelligence agencies with new tools, such as remote online searches of electronic devices.Originality/valueWhilst the empirical findings are based upon Austria, Germany, Liechtenstein and Switzerland, the results could be applied on European level.