Compliance Officers Research Articles

Corporate Criminal Liability and Compliance Management Systems

AbstractThe present work analyses the case of Spain in relation to Compliance Management Systems and Corporate Criminal Liability. It studies the way criminal justice understands and uses Compliance Management Systems to target corporate criminality. Moreover, it aims to deconstruct the way Compliance Management Systems are implemented in different corporations. To that end, I conducted a series of semi-structured interviews with Compliance Officers and performed content analysis on judicial documents. While not being able to generalise or give definite conclusions, the results showed a misconnection between the aim of criminal law provisions and the profit-driven objectives of corporations. Furthermore, results unveiled the powerful motivation of requirements. Companies sought to implement Compliance Management Systems to access new markets, better supplies and insurance fee discounts. Rather than the threat of punishment the analysis indicated a stronger effect through the positive stimuli of requiring a Compliance Management System for a benefit. The study also showed a fear for the reputational consequences of being subjected to a criminal procedure, thus indicating a better predisposition to solve offences through alternative conflict resolution methods. The lack of a clear message from the criminal justice reduced the deterrent effect of punishment. This lack of clear standards may have fostered social disorganisation within the environment of corporations, thus constituting fertile ground for corporate crimes.

Analisis Efektivitas Dan Tinjauan Audit Syariah Dalam Pelaksanaan Dan Pengawasan Kepatuhan Syariah Pada Bank Syariah

This study aims to analyze the implementation procedures and supervision of Sharia compliance conducted by the Sharia Supervisory Board (DPS) as well as its relationship with the internal role of the bank and the review of sharia audit over the implementation process. The method used in this research is the interview with the PT Bank Syariah Z. From the results of this study found that DPS has an important role in monitoring the implementation and supervision of Shariah compliance conducted with the control of preventive (ex-ante) and curative (ex-post ). There is a risk in the implementation of DPS working procedures where the work of DPS is assisted by the Sharia Compliance Officer who also has a position as an internal bank employee that can reduce the independence of the sharia audit process by DPS. The results of this study have implications on the need for regulators to review and build a system of supervision of sharia where the process of supervision can be more effective by not causing a significant increase in cost so as not to reduce the competitiveness of sharia banking in Indonesia.

Financing of terrorism through the banking system

PurposeThe purpose of this paper is to illustrate that it remains feasible for terrorists to use the banking system to transfer funds to finance their activities.Design/methodology/approachBased upon a qualitative content analysis of 15 informal interviews with financiers of terrorism and 15 formal interviews with compliance experts and law enforcement officers, concrete methods of financing terrorism through the banking system can be described.FindingsEven though banks have implemented strict control mechanisms, they often do not give the same attention to terrorism financing as they do to money laundering. Recently, refugees and “tourists” may have been involved in terrorism financing. When it comes to transferring larger amounts of money, terrorists do not necessarily act in their own name, but rather hire “straw men”. Some terrorists have proceeded to set up real companies in Turkey. Terrorists can explain why funds need to be transferred from Europe to Turkey through “charitable contributions”. Transfers of large amounts of money can also be facilitated by lawsuits.Research limitations/implicationsThe findings are based on semi-standardized interviews limited to the perspectives of the 30 interviewees.Practical implicationsThe identification of gaps in current terrorism-financing prevention mechanisms provides both compliance officers and legislators with valuable insights.Originality/valueWhilst the existing literature focuses on understanding the channels terrorists can use to finance their activities and on developing prevention mechanisms, this paper emphasizes that terrorists can still use the banking system to accomplish their goals. This paper illustrates ways terrorists can transfer funds through banks.

An agency theory approach towards bribery

PurposeThis paper aims to discuss the role of agency theory in combatting bribery in multinational corporations. It is shown how a combination of bonus and malus payments could help to create the right incentives for agency.Design/methodology/approachBased on the analysis of 15 formal and 15 informal expert interviews with both prevention experts and corrupt individuals, concrete ways of more effectively combatting bribery have been developed.FindingsAs a result, it is suggested that matrix systems could help to adjust incentives systems to take compliance issues into account. It is found that multinational corporations should eliminate.Research limitations/implicationsThis study’s findings are limited to the perspectives of 30 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time would have led to different results.Practical implicationsThe identification of the potential role of incentive systems in compliance mechanisms is meant to provide compliance officers and legislators with valuable insights into why the current prevention schemes are ineffective. This can help to both improve compliance mechanisms.Originality/valueWhile the empirical findings are based in Europe, the results could be applied globally.

CFTC amends chief compliance officer duties and annual report requirements

PurposeThis paper summarizes the requirements of rule amendments promulgated by the Commodity Futures Trading Commission (CFTC) in 2018 regarding the duties of Chief Compliance Officers (CCOs) of swap dealers, major swap participants, and futures commission merchants (collectively, Registrants) and the requirements for preparing, certifying and furnishing to the CFTC the CCO’s annual report.Design/methodology/approachThis paper provides a close analysis of the CFTC’s final rule amendments that make clarifications regarding the CCO’s duties and seek to harmonize with similar rules of the Securities and Exchange Commission (SEC) applicable to security-based swap dealers.It also analyzes rule amendments for the CCO’s report that provide clarifications and simplify certain requirements.In each case, it discusses comments from the public and the CFTC’s responses to those comments.FindingsThis paper finds that the rule amendments provide a number of helpful clarifications and simplify certain existing requirements for Registrants and their CCOs subject to the rules.While the rules overall achieve greater harmonization with similar rules of the SEC governing CCOs of security-based swap dealers, this paper notes that care will need to be taken by CFTC Registrants who also become registered with the SEC to be cognizant of remaining differences between the CFTC’s and SEC’s rules in order to ensure compliance with the rules of each agency.Originality/valueThis paper provides valuable information regarding the duties of CCOs of Registrants and CCO annual report requirements from an experienced lawyer focused on commodities, futures, derivatives, energy, corporate, and securities regulatory matters.

The Importance of Enterprise Risk Management to Public Sector Organisations in Nigeria

The paper dealt with the importance of enterprise risk management to public sector organisations in Nigeria. The paper has reviewed literature on frameworks for enterprise risk management and established the global practice. The paper found that the practice of enterprise risk management is an evolving practice among public sector organisations globally. In Nigeria, it is mainly practiced in private sector organisations with inadequate levels of implementation in the public sector. The absence of a specific legal framework for the establishment of project and programme management practices in the public sector may be responsible. Based on available frameworks, practices, and benefits of enterprise risk management, the paper has recommended that public sector organisations establish enterprise risk management processes and cadres for project management officer, compliance and risk management officers. Keywords : Enterprise Risk Management, Public Sector, Risk Management, Nigeria DOI : 10.7176/PPAR/9-3-17 Publication date :March 31 st 2019

The influence of organizational culture on information governance effectiveness

PurposeThis paper aims to explore the impact of organizational culture on information governance (IG) effectiveness at higher education institutions (HEIs). IT professionals, such as chef information officers, chief technology officers, chief information security officers and IT directors at HEIs were surveyed and interviewed to learn about whether organizational culture influences IG effectiveness. Several IG activities (processes) were identified, including information security, the function of an IG council, the presence of a Record Information Management department, the role of a compliance officer and information stewards and the use of an automated system or software to identify and maintain information life-cycle management.Design/methodology/approachThis study was conducted using Cameron and Quinn’s (Cameron and Quinn, 2011) competing value framework. To evaluate organizational culture, using the competing value framework, four types of organizational culture profiles were used: collaboration, creation/innovation, controlling/hierarchy, and competition/result-oriented. The methodology included quantitative and qualitative techniques through the use of content analysis of data collected from participants. IT professionals, such as chef information officers, chief technology officers, chief information security officers and IT directors at HEIs were surveyed and interviewed to learn about whether organizational culture influences IG effectiveness.FindingsFindings revealed organizational culture may influence IG effectiveness positively, especially from cultures of competition/result-oriented and control/hierarchy. Qualitatively, it also emerged that competition/result-oriented and control characteristics of organizational culture were perceived by IG professionals to produce more accurate information. One of the characteristics of organizational culture that became evident in the current study, coming from more than one subject, was the challenge in IG due to the presence of information silos. Trust, on the other hand, has been highlighted as the glue which can enable and drive governance processes in an organization.Research limitations/implicationsThe current study was conducted based on HEIs. While the current study serves as a baseline for studying IG in other institutions, its results cannot be generalized for other type of institutions. The results cannot be generalized for other types of not-for-profit or for-profit organizations. Many of the characteristics of the sample data were specific to HEIs. For instance, financial, manufacturing and health-care institutions present challenges inherent in those institutions.Originality/valueTrust has been highlighted as the glue which can enable and drive governance processes in an organization. Respondents of current study have indicated that trust serving several different factors toward IG effectiveness, including freedom to speak freely in the meeting about impact of organizational culture on IG, wiliness of executives of administration, particularly the CIO, to communicate IG matters to institution, sharing information and being transparent, entrusting help desk staff and technical supervisors so users can communicate with them and share their concerns and perceiving “feeling of trust” in the organization, which would benefit the institution, allowing stakeholders to collaborate and work together to overcome issues when facing IG challenges.

Isolating small Belize banks from the global system

Purpose The purpose of this paper is to increase insights into the withdrawal of correspondent banks (CBs) from developing markets. Design/methodology/approach A case study of a small offshore bank in Belize was conducted using information collected from the bank’s CEO and compliance officer through semi-structured interviews. The interview data were triangulated with data from relevant laws in Belize and literature review. Findings Compliance with international standards is onerous on small banks, but necessary to level the playing field and protect the global system. Practices within small banks effectively combat money laundering, but remain unsung because size and geographic location of banks influence perceptions about the banks. The approach to de-risking was overreaching and unfair. Research limitations/implications The findings are specific to one offshore bank, but create awareness of Belize banking practices to mitigate money laundering risks. The results could influence regulators, international organizations and CBs to pierce through to the bank level to assess risks and determine CB relationships. Originality/value This is the first study providing firsthand accounts of efforts by a small Belize bank to comply with international standards and remain connected to the global financial system. The study highlights a critical weakness in employing a risk-based approach to rate banks.

Patterns of compliance with soft regulation in Italian listed companies

The aim of this paper is to identify some clusters of companies which represent and classify different forms of compliance with soft regulation and the comply-or-explain principle. The analysis was conducted through the administration of a structured questionnaire to a sample of compliance officers from 102 companies listed on the Italian stock market. Our results identify three different clusters of companies with different patterns of compliance characterised by distinct forms of regulation conformity. The first cluster of companies called “regulation adherents” favour a clear and explicit application of compliance, the second cluster called “regulation dissenters” favour the “explain” principle and show compliance values below the sample average, while the third cluster called “regulation dissenters with balanced task orientation and an independent supervisory unit” fall between the first two clusters. Our study gives a contribution to corporate governance literature, with the aim of contributing to both the studies focused on the measurement of code compliance and the studies focused on identification of different patterns of code conformity. This paper extends the literature related to compliance and makes a relevant step towards the identification of principles and practices related to an innovative and unique application of the anti-corruption system based on the comply-or-explain principle.

Secondary Use of Electronic Health Records to Improve Quality and Safety of Care: Healthcare Professionals' Knowledge and Concerns

Background: Health and social care professionals (HCP) are often patients' first point of contact in what concerns the communication of the purposes, benefits, and risks of sharing electronic health records (EHR) for non-direct care purposes. Their engagement is fundamental to ensure patients' buy-in and a successful implementation of healthcare data sharing schemes. However, their views on this subject are seldom evaluated. The aims of this work is to explore HCP' knowledge on a) the purposes of using EHR data for non-direct care, and b) their major concerns about data sharing processes. Methods: Thirty online interviews were conducted between the 27th March and 7th April 2017 using a novel online bulletin system, and following a topic guide with open-ended questions. The transcripts were compiled verbatim and systematically reviewed by two independent reviewers, using the framework analysis method to identify emerging themes. Findings: HCP were knowledgeable about the possible secondary uses of data and highlighted its importance for 1) patient profiling and tailored care, 2) research, 3) quality assurance, 4) public health, and 5) service delivery planning purposes. Main concerns towards data sharing included 1) data accuracy, 2) patients' willingness to share their records, 3) challenges on obtaining free and informed consent, 4) data security, 5) lack of adequacy / understanding of current policies, and 6) potential patient exposure and exploitation. Interpretation: Although our results suggest a good understanding of the purposes of data sharing for secondary purposes, some concerns still remain. A better understanding of HCP' knowledge and concerns could inform national communication policies, and improve tailoring in order to maximise efficiency and improve patients' buy-in. Funding: This work is supported by Imperial NIHR Patient Safety Translation Research Centre and by NIHR Imperial Biomedical Research Centre. Declaration of Interest: We declare no conflicts of interest associated with this research. Ethical Approval: The protocol complies with the COREQ checklist for qualitative studies. This research was part of a service evaluation and was approved by such by the Head of Regulatory Compliance, AHSC Joint Research Compliance Office Imperial College London and Imperial College Healthcare NHS Trust on the 23rd January 2017.

Recent trends in money laundering and terrorism financing

PurposeThis paper aims to investigate how criminals launder money and finance terrorism through the financial system.Design/methodology/approachIn total, 70 interviews were conducted with criminals and white-collar crime prevention experts, whose responses were subjected to qualitative content analysis. Based on the findings, a quantitative survey of 200 compliance officers was carried out.FindingsThe interviews and survey revealed concrete techniques of laundering money and financing terrorism through the financial services industry and its affiliates. Evidently, the compliance mechanisms aimed at preventing money laundering and terrorism financing can be easily circumvented.Research limitations/implicationsThis study’s findings are limited to the perspectives of 70 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time could have yielded different results.Practical implicationsIdentifying the concrete methods of laundering money and financing terrorism should provide both compliance officers and legislators with valuable insights into criminal activity. By better understanding the specific steps taken by criminals, compliance officers should be able to more effectively combat both money laundering and terrorism financing.Originality/valueWhile prior literature focuses on the organizations and mechanisms involved in combating money laundering and terrorism financing, this paper instead explores how criminals avoid detection by taking into account existing compliance mechanisms and criminal perspectives.

Money laundering and terrorism financing through consulting companies

PurposeThe purpose of this paper is to illustrate how criminals need to proceed to launder money and finance terrorism through the use of consulting firms.Design/methodology/approachA qualitative content analysis of 58 semi-standardized expert interviews with both illegal financial services providers and prevention experts led to the identification of concrete techniques for money laundering and terrorism financing through consulting companies.FindingsConsulting firms could be considered to be “criminals’ best friends”. Terrorists could either buy or set up consulting firms in reputable countries, such as Switzerland or the UK. Subsequently, they could combine real consulting services along with fake clients to cover their illicit activities.Research limitations/implicationsAs the findings are based on semi-standardized interviews, they are limited to the 58 interviewees’ perspectives.Practical implicationsThe identification of gaps in current prevention mechanisms is meant to provide legislators, compliance officers, law enforcement agencies and intelligence offices with insights into how criminals finance terrorism and launder money.Originality/valueWhile the existing literature focuses on simply naming areas that could play a part in money laundering or the financing of terrorism, this paper describes a concrete method. It takes both prevention and criminal perspectives into account.

The PRC exchange control-related compliance duties of Swiss banks towards PRC residents’ deposits

PurposeThis paper aims to discuss the compliance duties of Swiss banks toward the Chinese exchange control in case of PRC residents’ deposits.Design/methodology/approachThe paper matches the Swiss regulatory framework and practice in matter of banks diligence with that of the PRC exchange control and tentatively identifies the consequences resulting thereof for Swiss banks.FindingsThe paper finds that exchange control does fall within the scope of the Diligence Code. It suggests that banks should broadly interpret the related provisions. While in case of infringement, Chinese penalties can still be rated as a remote and moderate threat, they might strengthen. Meanwhile, the Swiss ones, under the Code, are serious.Research limitations/implicationsThe paper does not cover other forms of overseas investment from China, namely, commercial investment. Besides, there is no related jurisprudence or practice as of yet; therefore, the findings of the paper need to be tested.Practical implicationsThe paper suggests that the compliance officers of Swiss banks should familiarize themselves with the specificities of the PRC exchange control to anticipate the related risks.Originality/valueSino-Swiss compliance and bilateral assistance in financial matters are still unchartered waters. Because the Greater China market is of growing significance for Swiss banks, they might welcome early guidance to avoid repeating their mistakes with the USA and the EU.

Retrospective analysis of the compliance officers of accounting and registration discipline and counter concealment of crimes

Retrospective analysis of the compliance officers of accounting and registration discipline and counter concealment of crimes

Socrates in the C-suite: The need for Socratic dialogue in corporate compliance

This paper discusses the need for compliance officers to demonstrate that their companies’ compliance policies and procedures are operationalised and defensible in the face of audit or regulatory scrutiny. To do so, they must begin by asking questions about each major element of their compliance programmes. To ask questions in the right way, this paper advocates that they use Socratic dialogue: asking a question, using the answer to formulate another question, and systematically continuing the process of questioning and cross-questioning to explore a topic thoroughly. The general structure of complianceoriented Socratic dialogue should be built around four questions: (1) ‘What are the purpose and intent that the government has stated for this programme requirement?’; (2) ‘What, specifically, have we done to satisfy this programme requirement?’; (3) ‘How will we prove and document what we have done?’; and (4) ‘How do those facts help in demonstrating the effectiveness of our programme?’ The paper then uses examples of specific Socratic-dialogue questions with regard to three hallmarks of effective corporatecompliance programmes — ‘tone at the top’; sufficiency of compliance resources; and examining risk assessment — to show how such questioning can foster improved corporate compliance. For ‘tone from the top,’ the questions reflect law enforcement expectations that leaders engage in concrete, specific actions to demonstrate compliance leadership. For adequacy of resources, the questions reflect the need for specific answers about staffing levels, staff expertise and training, and how corporate decisions about resources are made. For risk assessment, the questions reflect the need to have specific information about the company’s specific compliance risks, the methodologies it uses for risk assessment, and whether risk-assessment data is timely delivered to the right decision makers. The paper concludes that Socratic dialogue can be not merely useful, but necessary, in seeing that a corporate-compliance programme is well-designed and effective.

An introduction to recent trends in terrorism financing

This paper discusses recent trends in terrorism financing and their implications for financial compliance. In particular, concrete methods used by terrorism financiers will be illustrated, based on 100 qualitative expert interviews with both compliance professionals and criminals. Those interviewees’ insights offer suggestions for improving compliance mechanisms, which will be discussed. The banking system, hawala banking, cryptocurrencies and the antiquities market are all found to be extraordinarily suitable for financing terrorism. By identifying concrete methods of terrorism financing, this paper aims to provide compliance officers, law enforcement agencies and legislators with valuable insights into criminal activity. Whereas existing literature focuses on organisations fighting terrorism financing, this paper instead describes how criminals avoid detection, thereby focusing on the perspectives of criminals and prevention officers.

Focus on compliance: Using data to enhance the physical environment of care

The American Society for Health Care Engineering (ASHE) Focus on Compliance programme was developed to help health care organisations improve their compliance to the most often cited Environment of Care and Life Safety Joint Commission standards, thus providing an environment that is built and maintained to support patient care and provide the necessary life safety features for patients incapable of self-preservation. This paper provides an overview of the root cause analysis of citations issued during the Joint Commission surveys of hospitals during 2014. Through this analysis, root causes were determined for the failed compliance, and while this is important to be able to truly understand what the difficulties are in meeting compliance standards, it has also provided ASHE with valuable data to develop tools and resources for improved compliance, thus helping to optimise the health care physical environment and improving patient safety. By understanding these root causations and availing themselves of the tools and resources available, health care organisations can not only improve their compliance and therefore provide safer facilities, but, even more importantly, provide better patient care for those whom they serve. This paper is aimed at health care engineers, safety officers, compliance officers, patient safety managers and executive staff.

The Law Officer (LO) and Compliance Officer (CO): Status, Function, Liabilities, and Relationship

The rise of Compliance officers (COs) has raised questions about their status in institutions and comparisons to the Legal Officers (CLOs). While both officers deal with law and its enforcement, their functions and positions differ in fundamental ways. And while LOs position is recognized, the status of COs is evolving. However, these differences are slowly becoming clearer. 1. While the LO’s function is to provide legal advice to the institutional client, the CO’s function is to (i) evaluate the institution’s activities before violations take place and (ii) help prevent violations of the law by the institution. The CO should detect and help prevent institutional violations, avoiding the need to defend the client. Therefore, COs and LOs might focus on different issues and provide different advice to clients.

Impact of a comprehensive copay assistance and drug recovery system in a community cancer center.

121 Background: The cost of oncology drugs has escalated rapidly while rollbacks in health care coverage and the emergence of high deductible and limited policies have made these drugs unaffordable for many. Many pharmaceutical companies offer drug replacement for those uninsured or for whom coverage is inadequate. Previously Bon Secours St. Francis Cancer Center (BSSFCC) had contracted with a third-party to recover replacement drug from these pharmaceutical programs. In 2017, we opted to suspend that third-party contract and take the process internally. Methods: BSSFCC is located in Greenville, SC. Nearly1500 new cases of cancer were diagnosed in 2016, of which, 3.5% are uninsured. We hired 2.5 FTE's to manage our drug recovery program. After clearance with legal and compliance officers, limited power of attorney was obtained to pursue these efforts on the patients’ behalf. Patients who had no drug coverage, inadequate coverage, or off-label denials were identified at the time of chemotherapy education, pre-authorization, or by after-the-fact processing of claims. Our efforts at drug recovery are noted below. Results: We recovered drug for 71 patients during fiscal 2017. The total cost of those recovered drugs was $3.25 million. This compared with $389,000 recovered by our third-party vendor (pre-commission) in FY 2016. $842,000 of drug replacement were for off-label use in insured patients, while $587,000 represented use in the uninsured. The remainder represented replacement drug for those with inadequate drug coverage and an ipilimumab replacement program for adjuvant therapy for melanoma. Conclusions: Embedding a process within a community cancer center to manage drug recovery for the un- and underinsured proved to have a substantial return on investment. The drug expenses which had to be written off were decreased substantially but most importantly, our ability to replace drug with some reliability allowed many of our patients to receive effective therapy that otherwise would have been cost prohibitive. Although the ability to recover drugs in this fashion is both helpful and appreciated, our program does nothing to rein in the unsustainable rise in the cost of cancer care.

Anti-money laundering and moral intensity in suspicious activity reporting

PurposeThis paper aims to examine the influence Jones’ Moral Intensity Model (1991) has on the decision-making process of anti-money laundering (AML) compliance officers charged with reporting suspicious money laundering transactions in Jersey.Design/methodology/approachTen interviews were conducted to elicit participants’ views on the six dimensions of moral intensity and their influence on the compliance officers’ decision to submit a suspicious activity report (SAR) of potential money laundering.FindingsThe findings indicate that the officers’ moral intensity to submit a SAR seems to be heavily influenced by issue-specific contextual factors. Contexts (legal and legislative mandates) seem to have more of an effect on the moral intent and actions of the officers rather than directly affecting the decision to submit a report of a suspicious money laundering transaction.Research limitations/implicationsThe paper lays the groundwork for further work in this area and calls on researchers to develop instruments that can enhance the measurements of the dimensions of moral intensity.Practical implicationsThe setting (AML in the financial sector) is both timely and extremely interesting to keep studying, particularly in Jersey because of its dubious sensitive particularities.Originality/valueThe study is the first to examine Jersey AML sector through the lens of moral intensity. In this sense, the paper poses interesting questions, namely, to explore the dynamic complexities experienced by compliance officers in Jersey to detect and report suspicious money laundering activities and the decision-making criteria of actually submitting a SAR.