Global Glimpses

Oct. 22—A new survey of European and U.S. corporate counsel and compliance officers showed that risks of litigation remain a major concern, with 88 percent reporting that the amount of legal disputes faced by their company in the past year has either stayed the same or increased. The annual survey, conducted by consulting firm AlixPartners, also revealed that European respondents were more likely to report an increase in cross-border disputes and the use of arbitration than their U.S. counterparts. More results inside.

Bischoff

With the recent release of an annual report detailing compliance gains, the head of Britain’s Financial Reporting Council called on boards to tackle the complex issue of corporate culture to ensure ethical corporate behavior. FRC Chairman Sir Winfried Bischoff said his agency this year will delve into how effective companies have established and embedded a strong corporate culture to promote best practices. “Strict adherence to the principles and provisions of the [corporate governance] code is not, on its own, necessarily an indication that company culture is completely healthy,” Bischoff wrote in an opinion piece. Details inside.

Recent scandals at banking giant HSBC have caused regulators to shift their attention to senior executives. According to news reports, Group Chairman Douglas Flint and Chief Executive Stuart Gulliver have come under scrutiny after journalists obtained “secret documents” stating that HSBC’s Swiss private banking arm failed to conduct sufficient due diligence on some of its clients who engaged in tax evasion. Details inside.

While Belgium has made significant progress in tracking down anti-money laundering and counter-terrorist financial (AML/CFT) activities, a lot more work needs to be done, says a recent report by the Financial Action Task Force. In April, the European Union approved new draft rules that reflect the need of its member states to take into account the development of technology and other solutions at the disposal of criminals. More inside.

The Financial Conduct Authority warns that banks should rethink their anti-money laundering strategies in light of reports that financial institutions have nixed services to customers that may pose potential money-laundering risks. The agency says, “These policies and procedures must be comprehensive and proportionate to the nature, scale, and complexity of the bank’s activities.” See inside.

Green

A number of well-known anti-corruption activists, such as Transparency International and Corruption Watch, are urging David Green, director of Britain’s Serious Fraud Office, to rethink replacing criminal charges with deferred prosecution agreements. The group warns that if DPAs are offered, that will allow banks and other companies to engage in misconduct and risky behavior without facing criminal charges. Details inside.

Elizabeth Corley, global chief of Allianz Global Investors, warns that there can be serious consequences to the economy if bankers continue to engage in reckless misconduct. Corley says rogue bankers often see wrongdoing as a minor rather than a serious offence, which can lead to bigger problems for financial institutions. Her research of legal, compliance, audit, and management shows that too many employees can’t tell if they are going down the wrong path. Details inside.

Nordea Bank AB, a major financial institution for the Nordic region, is re-establishing its anti-money laundering program to correct flaws in its processes that resulted in the company paying up to $5.9 million in fines. This is not the first time Nordea has been put in the spotlight for poor AML practices—in 2013, the company was fined for sanctions and money laundering violations. Details inside.

Trending online are the #Compliance and #Corpgov hashtags that compliance officers and governance practitioners around the world often turn to for emerging trends and latest news. Whether it’s sharing ideas about the ever-changing regulatory landscape or covering industry-related events, both hashtags are known to provide real-time information. This week our Digital Content Editor Aarti Maharaj takes a quick look at some top tweets. 

Companies troubling over how to report due diligence procedures on eliminating human trafficking under the U.K. Modern Slavery Act have been given some help. A new guide from U.K.-based civil society organizations advises companies on how to embed such procedures into their reports. Although the reports are certainly important, says CW’s Paul Hodgson, the more important outcome will be whether the practices result in an end to business practices that expose companies and their supply chains to the risks of slavery and forced labour.