FCPA in India 2014: Compliance Strategies for India's ...media.straffordpub.com/products/fcpa-in-india-2014-compliance...Compliance Strategies for India's Unique Cultural and Governmental

FCPA in India 2014: Compliance Strategies for India's Unique Cultural and Governmental Intricacies

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

WEDNESDAY, MAY 21, 2014

Presenting a live 90-minute webinar with interactive Q&A

Jay Holtmeier, Partner, Wilmer Cutler Pickering Hale and Dorr, New York

Elizabeth D. Keating, Global Compliance Counsel - Investigations, Johnson Controls, Milwaukee, Wis.

Michael Stavridis, Partner, Ernst & Young, Chicago

Tips for Optimal Quality

Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-888-601-3873 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail [email protected] immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

FOR LIVE EVENT ONLY

Continuing Education Credits

For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps:

• In the chat box, type (1) your company name and (2) the number of attendees at your location

• Click the word balloon button to send

FOR LIVE EVENT ONLY

FCPA Compliance in India: Compliance Strategies Given India’s Unique Cultural and Governmental

Intricacies

Strafford Publications Teleconference May 21, 2014

Jay Holtmeier Wilmer Cutler Pickering Hale and Dorr LLP Elizabeth D. Keating Johnson Controls, Inc. Michael Stavridis Ernst & Young LLP

OVERALL FCPA ENFORCEMENT TRENDS

– Activity peaked in 2010, but still very active

– Government has noted “substantial pipeline of new matters”

DOJ and SEC Enforcement Actions 2005-20013

5

OVERALL FCPA ENFORCEMENT TRENDS

Large FCPA Penalties Continue; Recent Settlements: – Total, S.A. ($398M), 2013 – Alcoa ($384M), 2014 – Weatherford ($153M), 2013 – HP ($108M), 2014

Prosecution of Individuals Is Continued Priority Third-Party Risks (e.g., sales agents, intermediaries, consultants) Travel and Entertainment in High-Risk Markets Industry-Specific Risks (e.g., probe of banks’ Asian hiring

practices) New Tools at the SEC – Deferred Prosecution Agreements and

Non-Prosecution Agreements Shift Away from Compliance Monitors; Increased Use of

Alternatives SEC’s “Neither Admit nor Deny” Policy

6

Enforcement by Indian Authorities

Lokpal Act of 2013 created a new agency to investigate and prosecute civil servants accused of corruption.

Recent Supreme Court ruling expands power of Comptroller & Auditor General to audit transactions with government.

Parliament recently passed a whistleblower protection bill.

High profile investigations reported publicly: – Bribery in helicopter procurement led to India’s

suspension of $750M contract with AgustaWestland and criminal charges against former Indian Air Force Chief.

– India’s Defense Ministry has suspended all contracts with Rolls-Royce pending inquiry of bribery allegations by India’s Central Bureau of Investigation.

7

FCPA ENFORCEMENT ACTIONS RELATED TO INDIA

Diageo (2011) – Payments by Distributors to Secure Business and Ease Regulatory Burden – Diageo is one of the world’s largest producers of alcoholic

beverages, such as Johnnie Walker. – SEC settlement papers alleged that from 2003 to mid-2009,

Diageo’s Indian subsidiary’s promoters and distributors made hundreds of illicit payments to government officials responsible for purchasing or authorizing the sale of its beverages in India.

• Payments made by distributors to employees of government-owned liquor stores to increase purchases of Diageo beverages.

• Payments made by distributors to regional and state officials to secure label registrations for products.

– For this and other conduct, Diageo settled SEC books and records and internal controls charges for $16M. 8

FCPA ENFORCEMENT ACTIONS RELATED TO INDIA Baker Hughes (2001) – Payments by Agent to Ease

Regulatory Burden – Baker Hughes’ former subsidiary Western Geophysical (WG)

provided geophysical exploration services. – In order to provide these services in the Bay of Canby, India,

WG needed authorization from the Director General of Shipping to use a foreign-flagged vessel.

– According to the SEC’s papers, WG’s agent told a WG manager that permits could be issued for $15k. WG manager told the agent to “take care of it.”

– WG later authorized a $15k reimbursement for the agent without adequate inquiry to ensure that the payment did not violate the FCPA.

– WG accounting staff improperly described the payment as “Shipping Permit.”

– SEC issued cease and desist order.

9


Oracle (2012) – Side Funds Maintained by Distributors – Oracle is a California-based computer technology company. – Oracle’s Indian subsidiary sells its products through

distributors that retain the margin between the amount paid by the customer and the amount paid to the subsidiary.

– According to the government, the subsidiary structured transactions to create extra margins for distributors in certain instances, essentially creating off-the-books side funds.

– Subsidiary employees then directed distributors to make payments from the side funds to sham entities.

– No allegation of bribery. – Oracle settled SEC books and records and internal controls

charges for $2 million.

10


Dow Chemical (2007) – Payments Through Side Funds and Petty Cash to Ease Regulatory Burden – Dow’s Indian majority-owned, fifth-tier subsidiary DE-Nocil

manufactures pesticides and other products. – SEC alleged that DE-Nocil structured transactions such that

off-the-books funds were held by the company’s contractors. As directed by DE-Nocil, the contractors disbursed funds directly to DE- Nocil or to a third party that would bribe a Central Insecticides Board official.

– Bribes resulted in expedited regulatory registration for DE–Nocil’s products.

– DE-Nocil also used petty cash to make improper payments to other officials, such as state inspectors.

– Dow settled SEC books and records and internal controls charges and agreed to pay a $325K civil penalty. 11

FCPA ENFORCEMENT ACTIONS RELATED TO INDIA Pride Int’l (2010) – Payments to Judicial Officer through

Third-Party Bank Account – Pride International is an oil and gas services company. – Government settlement papers alleged that managers at

Pride’s French subsidiary (including the legal director) authorized payment of $500K to a judge of the Indian Customs, Excise, and Gold Appellate Tribunal to secure a favorable determination in a customs duties and penalties dispute.

– Payments were made through a third-party company’s bank accounts in Dubai.

– The estimated value of the favorable decision was $10M. – Pride’s French subsidiary pleaded guilty; Pride International

entered into a DPA with DOJ. • For this and other conduct, Pride entities paid DOJ/SEC

$56.2M.

12


Westinghouse Air Brake Technologies (2008) – Payments to Secure Business and Ease Regulatory Burden – WABTEC manufactures brake subsystems for locomotives,

freight cars, and passenger transit vehicles. – Government’s papers state that WABTEC’s Indian

subsidiary’s employees and agents made payments to Indian Railway Board and other government officials to:

• Obtain business during the IRB tender process; • Schedule pre-shipping product inspections; • Have certificates of product delivery issued; and • Curb tax audits.

– To generate cash for these payments, the subsidiary engaged third-party “marketing agents” to create false invoices. When the subsidiary paid the invoices, the “marketing agents” returned the cash to the subsidiary.

– Payment of $677K to DOJ/SEC.

13


Textron, Inc. (2007) – Payment to Secure Business with a Commercial Customer – Textron is a conglomerate in the aircraft, defense,

manufacturing, and financial industries. – According to the government’s papers, a subsidiary paid

approximately $52K to an employee of a non-government customer to secure business in India.

– The payment was described as a “commission” in the subsidiary’s records.

– Identified by an internal investigation in response to allegations of kickbacks related to the UN’s Oil for Food Program.

– For this and other conduct, Textron entered into a NPA with DOJ and agreed to pay a total of $4.7M to DOJ/SEC.

14


Electronic Data Systems (2007) – Payments to Secure Business – EDS is one of the world’s largest technology companies. – SEC’s papers allege that between 2001 and 2003, EDS’

Indian subsidiary had difficulty performing its contractual obligations for two Indian government-owned clients.

– The subsidiary’s president authorized payments and gifts of over $720K to employees of the Indian government-owned clients.

– The payments resulted in the subsidiary retaining the business of the two clients.

– For this and other conduct, EDS settled with the SEC for $491K. The subsidiary’s president also settled with the SEC and paid a $70K penalty.

15


Indictment

Six Foreign Nationals (2013) – USAO in N.D. Ill. alleged that six foreign nationals engaged in

international racketeering conspiracy involving bribes of Indian government officials in exchange for titanium mining licenses and approvals.

– Defendants allegedly authorized bribes exceeding $18.5M. – Conspiracy included sale of titanium products to unnamed

“Company A” headquartered in Chicago. – Defendants include two Ukrainians, a Hungarian, a Sri

Lankan, and two Indians (one of whom is a US Green Card holder and the other is an Indian MP).

16


Control Components, Inc. (2009) – Payments to Secure Business – CCI designs and manufactures valves used in the power, oil

and gas, and nuclear industries. – CCI made payments of at least $4.9M from 2003 – 2007 to

employees of private companies and state-owned companies in several countries, including in India to the Maharashtra State Electricity Board.

– For this and other conduct, CCI pleaded guilty to criminal anti-bribery and Travel Act charges and paid an $18.2M fine.

17

PUBLICLY REPORTED FCPA INVESTIGATIONS IN INDIA

Rolls Royce – DOJ is investigating Rolls Royce for bribes in connection with

contracts in Indonesia, China, and India. The UK SFO and India’s CBI are also investigating the allegations.

Anheuser-Busch InBev

– Both DOJ and SEC are investigating the brewing company in connection with its Indian joint venture, InBev Indian Int’l Private Ltd.

Wal-Mart

– Continuing global FCPA investigation, including of Wal-Mart’s Indian join venture with Bharti Enterprises. In late 2013, the companies announced the breakup of the joint venture.

18

OTHER PUBLICLY REPORTED DEVELOPMENTS Yara International

– In January 2014, Norwegian authorities fined the fertilizer company $48M for bribing officials in India and Libya and making corrupt payments to a supplier in Russia. Yara allegedly agreed to pay $3M in bribes to the relative of an Indian government official in connection with a joint venture with an Indian government controlled entity. Norwegian Authorities also indicted four Yara executives.

Cryptometrics Agent

– In August 2013, Nazir Karigar, a former agent of Cryptometrics, became the first individual to be convicted of violating Canada’s Corruption of Foreign Public Officials Act. Authorities alleged that Karigar offered to bribe Indian officials to rig the bidding process for Air India contracts.

Bunge

– In June 2013, five executives of the Indian unit of the American food company Bunge resigned amid an internal audit related to the subsidiary’s purchase of land in Kandla, India.

19

CONTACTS WITH GOVERNMENT OFFICIALS IN INDIA

Public procurement/contracting with government agencies Customs clearance/importation of goods Immigration processes Real estate (both purchasing and leasing land) Tax administration (excise and sales taxes, audits) Obtaining certificates, registrations, permits, and licenses

(approval from multiple officials often required to obtain one permit/license)

Gifts and entertainment (especially during religious festival, Diwali)

Scheduling/passing inspections (fire, environmental, building) Government officials solicit donations for charitable/religious

organizations Interactions with police/judiciary Third parties with ties to government departments/officials

(consultants, agents, distributors, interns, and trainees) 20

Navigating Corruption Risks in India

May 21, 2014

Elizabeth Keating Global Compliance Counsel – Investigations

Integrity

Johnson Controls Confidential

Corruption Risk Profile - India

Transparency International – Corruption Perceptions Index (CPI) 2013 NGO which ranks countries based on how corrupt their public sector is

perceived to be. India scored 36 on a scale of 0 – 100. (100 = very clean; 0= highly corrupt). India ranked 94th out of 177 countries. (Denmark and New Zealand ranked #1;

Somalia ranked 177th). Same ranking and score for India as in 2012. India sandwiched between

Djibouti, Colombia and Philippines, Suriname.

TI Global Corruption Barometer 74% of those surveyed in India believed that corruption in their country had

worsened. Political parties, police, public officials, judiciary were all perceived to be affected

by corruption. 44% believed that their government’s actions to fight corruption were ineffective.

22



TI Bribe Payers Index 84% of Indian companies believe bribes or facilitation payments are

being paid to do business 30% of Indian companies reported paying bribes to government

officials to expedite government services 54% of individuals surveyed reported paying a bribe to obtain

government services World Bank Survey 2013 - India Ease of Doing Business – 132 out of 185 (1=best) Starting a Business – 173 Dealing with Construction Permits – 182 Getting Electricity – 105 Paying Taxes – 152 Enforcing Contracts – 184 No significant improvement from 2012 rankings

23



Corruption pervasive at every level of government Bribes accepted as common practice Paying bribes for the most basic services is routine While petty bribery continues unabated – serious

corruption has flourished and reached unprecedented proportions

Lack of enforcement of anti-corruption regulation Anti-corruption legislation (Jan Lokpal) remains stalled

in Parliament Over regulation of businesses and industries creates

“opportunities” for corruption Vestige of License Raj

24


India – Winds of Change?

Grassroot anti-corruption campaigns still engaged – if ineffective: Hunger strike by Kisan “Anna” Hazare – anti-corruption campaigner “I Paid A Bribe” Initiative posts citizens reports of corruption online “I paid a bribe” reports outnumber “I met an honest officer” 5th Pillar – Zero Rupees Anti-Corruption Campaign Zero denomination notes handed to government officials who ask for

bribes However, growing awareness with rising pubic support Several investigations concerning private and public corruption being

reported in the media Rise in whistleblower complaint. Tremendous increase in online social groups which highlight corruption Corporations giving more focus to internal audits and investigations to

identify fraud and corruption

25


India – Winds of Change?

26


Risks in Dealing with India Bureaucracy

Challenges Presented by Regulatory and Business Environment Excessive bureaucracy and regulation Procedures are complicated and not transparent Several layers of approvals required to obtain licenses/permits Practice of using “agents” to interface with government agencies

Civil servants grossly underpaid Accepted practice of “tips” or facilitation payments to civil servants in

order to obtain routine government services Seen as an accepted method of augmenting meager civil servant

salaries Prevention of Corruption Act Prohibits public servants from accepting bribe Prohibits giving of bribes to public servants No exception for facilitation payments Inconsistent enforcement

27


Interaction with India’s Bureaucracy

Majority of corruption occurs at the lower levels of government More than half of the reported bribe demands were for less than

$100 84% of the reported bribe demands were for $5000 or less 13% of the bribe demands originated from the Customs office 9% of the demands came from the national offices of Taxation Most bribes involved use of “agents” or “consultants” to conceal

the true nature of the payments Payments recorded as third party payments with general

descriptions Often routine government services, eg., utility services, involve

demand for a bribe

28



Government Touch Points: Taxing Authorities Variety of taxing regimes provide “opportunities” for bribery Income taxes – tax on profits earned by business Tax Deducted at Source (TDS) – tax deducted from certain vendors.

Monthly returns and payments to the exchequer Service taxes – central indirect tax on services rendered by company.

Monthly filings and payments to central treasury Octroi Tax – intra-country “customs” tax levied on products which are

transported into municipal jurisdictions, e.g., Mumbai and Pune. Octroi tax recently eliminated in many major cities. Replaced by Local Body Tax (LBT). Eliminates need for drivers to

stop at toll booths Not yet eliminated in Mumbai.

29



Government Touch Points: Taxing Authorities Value Added Tax (VAT) – state tax on sale of certain goods Works Contract Tax – part of VAT Tax law and applicable to specific

portion of contract Central Sales Tax – tax on sale of goods from one state to another Central Excise – tax on manufactured goods Service Tax – tax on services provided to customer Use of Consultants to prepare and file tax reports Lack of transparency in invoice description of services provided by

consultants Opportunity for improper payments particularly in connection with tax

appeals and tax audits

30



Government Touch Points: Licenses, Permits and Inspections Licensing and permitting regulations are duplicated by national, state

and local agencies Many licenses and permits require several visits to government offices Frequent requests for bribes from government employees to render

routine government services Refusal to pay will often result in prolonged application process Many company employees do not distinguish between facilitation

payments and payments made to impact outcome of inspection report Government employees will often require that you make payment to a

“trusted” third party who will, in turn, funnel the money to the government employee “Government liaison” services offered by certain vendors Vendors will even provide a schedule of rates for amount of facilitation

payments required by the various agencies

31



Government Touch Points: Licenses, Permits and Inspections: Electrical Safety inspections Mechanical Equipment inspections Labor Department inspections Lift/Elevator Licenses and inspections Pollution Control Board inspections and Consents to Establish/Operate Factory License Renewals Fire Safety inspections Police inspections – labor issues and workplace accidents Health Department inspections Diesel storage inspections High Rise Building inspections Sanitation Department plumbing inspections Energy Meter Testing reports

32



Government Touch Points: Licenses, Permits and Inspections: Environmental licenses CEIG Licenses for electrical systems Fire licenses Explosive licenses Commercial use clearances Air Consent (Operation & Establishment) Occupation certificate from local authority Annual Operations renewal Structural certificate for floor load density Water Consent Hazardous Waste Handling and Disposal Consent to Establish and Consent to Operate

33


Navigating the Risks

Vendor/Supplier Management and Due Diligence Vendor Maintenance File accuracy Correctly categorize vendor as high or low risk, i.e., are there

any government facing services being provided? Due diligence of High Risk Vendors Undertake appropriate level of due diligence on all high risk vendors

who interface with government agencies Often these vendors will not be found using standard desktop tools Consider in-person meetings with high risk vendors for DD Centralized procurement function for vendor selection process Provides transparency over selection process Establish DNU/DNP list for any vendors who have been found

to use unethical business practices

34



Contract Review Evaluate all contracts to ensure that the scope of services does

not provide inappropriate payments to government employees, e.g., “Liaison services” “Outsourcing bribery” Do not undertake any government facing services on behalf of

customers not specifically provided for by contract Supplier Anti-Bribery/Anti-Corruption certification Communicate expectations to vendors re ethics and anti-

bribery/anti-corruption training for all high risk vendors Training to include discussion of India Prevention of Corruption Act Copy of Code of Conduct

35



Financial Controls Establish monitoring process to ensure vendor transactions are for

legitimate services Red flag/warning sign training for AP function Stringent controls around employee advances and petty cash Evaluate use of “miscellaneous vendor codes” Red Flag training for all finance personnel

Government Interfacing Activities Establish “Compliance Task Force” to handle all licensing, permitting

and inspection requirements Only “Task Force’ will interface with government agencies Administers, manages and enforces all statutory compliance activities

Communication to Customers Need to communicate to customers that the refusal to make improper

payments may slow the process of obtaining government approvals necessary to operate

36



Monitor all Licensing/Permitting Activities Review all licenses and permits necessary to conduct business

Monitoring and Auditing Regular and periodic forensic reviews of business practices and

control environment

37


Navigating the Risks – Monitoring/Auditing

RED FLAGS Rumors regarding unethical or suspicious conduct by an

employee, marketing representative, consultant or other business partner, or a government official

Unnecessary third-parties or multiple intermediaries Requests for payments to a third-party rather than the

consultant Requests for payments in a third country Business in a country with bribery problems Requests for payment in cash Requests for unusually large commissions or other

payments, or payments that appear excessive for the service rendered

38


39

Navigating the Risks – Monitoring/Auditing

RED FLAGS Non-government organizations, lobbying costs, public

relations expenditure, political contributions etc. Requests for reimbursement of expenses that are poorly

documented Incomplete or inaccurate information in required disclosures Refusal to certify compliance Government end-users Government touch points such as customs, taxes, licenses,

etc. Previous issues, incidents

39

Monitoring FCPA Risks in India May 2014 Michael Stavridis

41

Perceived as most corrupt sectors

Infrastructure and real estate

Metals and mining

“According to 73% of the respondents from PE

firms, a company operating in a sector that is

perceived as highly corrupt, may lose ground

when it comes to a fair valuation of its business,

as it bargains hard and factors in the cost of

corruption in the sector during a transaction.”

Aerospace and defense

Power and utilities

42

Production

Sourcing

Logistics

Customs CHA

Police

Labour law officials

FDA

Municipal dept.

Octroi

Excise

W&M

Labour law

Shops & Establishment

Fire department

Sales tax Income

tax Service tax

Road permits

Companies Act

Electricity board

Pollution Control Board

DGFT

Local + imports

Imports

Lift license

Tax compliance

Manufacturing

Indian company

Government interaction at a glance

43

Step 1 Step 2

Step 3 Step 4

Step 5 Conversion of land and change of land use

Pre-approval NOCs and clearance from agencies

Plan sanction Occupancy certificate

Some of the permits required

Conversion of land use Sanction of development plan NOC from electricity board

NOC from fire service department NOC from Airport Authority of India NOC from Ministry of Environment and Forest Clearance

57

172

40 Number of approvals a builder needs to construct a property

Number of documents a builder has to produce

Number of departments of central and state governments and municipal corporations a builder engages

Source: Binoy Prabhakar , “DLF-Vadra story: Why real estate in India has become synonymous with bribes & black money,” The Economic Times, 15 October 2012, via Dow Jones Factiva, © 2012 The Times of India Group

Example of licenses and permits challenges

44

Common scenarios Rationalization

► ‘We are not paying it ourselves, it is the vendors problem’

► ‘We can conceal it in the books of accounts’ ► ‘We cannot afford to wait and lose business’ ► ‘How will anyone know’ ► ‘It is vendor’s responsibility to get things done’

Hurry to setup the

facility

Ethical dilemma:

cost of losing business vs. compliance

Turning blind eye to

violations, non-

compliance

Pressure to meet targets

Use of third party

consultants

Generating cash through

employee advance or petty cash

Bribery and corruption scenario

45

Proactive

Sample FCPA compliance program framework

Reactive

Proactive

Setting the Proper Tone

Code of Ethics

FCPA Prevention Policies

FCPA Risk Assessment

FCPA Controls Monitoring

FCPA Awareness Training

Response Plan

Conduct FCPA Risk Assessment

FCPA Monitoring

Program assessment

Implementation review

Substantive review

Results drive monitoring

46

FCPA compliance program Risk assessment criteria

Government end-users;

sales intermediaries/

direct sales

High risk geographic

markets

Significant movement of

goods/ imports/ exports/

certifications Government touch points –

VAT/ taxes/ licenses/ etc.

Travel, entertainment

and gifts, customer travel,

petty cash

47

How to monitor for corruption risks?

► What kind of testing should be conducted? ► Controls testing versus substantive testing ► Controls alone may not prevent irregularities; control testing alone may not

detect irregularities ► The DOJ/SEC guidance to the FCPA states that a compliance program that is

“followed in practice will inevitably uncover compliance weaknesses and require enhancements” and that programs that employ a “check-the-box” approach may be inefficient and, more importantly, ineffective”

► “DOJ and SEC evaluate whether companies regularly review and improve their compliance programs and not allow them to become stale.”

► The UK MOJ guidance to the UK Bribery Bill requires organizations to “monitor the ethical quality of transactions”.

48

How to monitor for corruption risks? continued ► How to choose a sampling methodology? Where and how are potential

problem payments recorded? ► Understand the business? Where are the customers? Where are the

government touch points? ► Choose accounts that could have risk – Commissions, permits, licenses,

consultants, freight forwarding, customs clearance, etc. as well as major Government or SOE contracts/projects

► Choose T&E reports from individuals who direct or touch the risk Who manages imports/exports? Who entertains our big Government clients?

► Controls over cash?

49

How to monitor for corruption risks? continued

► How can we leverage technology to find higher risk transactions? ► Advanced analytics ► Key word searches on text fields in GL or T&E systems

► Who should conduct these audits?

► Experience (how many of the auditors have ever seen a bribe?) ► Local expertise (how many have ever seen a bribe in India?) ► Training

► Who should be interviewed?

► Employees ► Vendors?

50

Higher risk ledger accounts and expenses

► Obtain listing of major customers and identify potentially high risk customer contracts

► From the chart of accounts and trial balance, select higher risk accounts for testing, examples would include: ► Travel and Lodging ► Gifts and entertainment ► Marketing and consulting fees ► Customs and duties; freight forwarding charges ► Visas, permits and licenses ► Audit and tax consulting fees; legal fees ► Sales commissions ► Donations, charities, sponsorships, community/social responsibility payments,

political contributions ► Security ► Facilitation payments (if any) ► Client travel and production facility visits ► Capital expenditure; facilities

51

Bribery with cash the biggest risk

In which form(s) bribe is/are most often given or accepted ?

52

‘follow up charges’

‘redemption charges’

‘renewal charges’

‘consultancy charges’

‘securing consent’

‘for government liaisoning’

‘for obtaining license’

Some potential red flag narration in vouchers

for miscellaneous work’

‘for facilitating permits’

‘for clearances’

‘for obtaining approvals’

‘for government entertainment’

‘gifts for government officials’

‘meals with government officials’

‘for processing’

‘other charges’

‘documentation charges’

‘to expedite approval’

‘environment consultancy charges’

‘for getting NOC’

‘retainership for statutory compliance’

‘incidental expenses’

‘examination charges’

53

Example of higher risk transaction selections

GL Account DocumentNo Reference Doc. Date Amount Curr. Textxxxxxx 1900004156 ADV. ADJUST. 20.03.201x 12,000.00 INR SECL Entertainment Charges-Feb-Mar-1xxxxxxx 1900004800 ADV. ADJUST. 08.12.201x 10,000.00 INR Entertain. Exp.-to SECL BSP Staff Dt 13.8.1xxxxxxx 1900005296 BILL-99/2013-14 01.08.201x 10,000.00 INR Charge for Representation,hearing VAT/CST 4QE31.03.11xxxxxx 100013020 PROVISION DEC12 31.12.201x 3,500.00 INR Prof.Fees of Sales Tax Consultant xxxxxx 1900005430 - 02.12.201x 100,000.00 INR Advertisement to MGMI for Workshop

54

Example of a higher risk transaction supporting documentation

55

I paid a bribe (http://www.ipaidabribe.com/)

56

Thank You

Jay Holtmeier Wilmer Cutler Pickering Hale and Dorr LLP (212) 295-6413 [email protected] Elizabeth D. Keating Johnson Controls, Inc. (414) 426-9506 [email protected] Michael Stavridis Ernst & Young LLP (312) 879-2048 [email protected]

Documents

FCPA in India 2014: Compliance Strategies for India's ...media.straffordpub.com/products/fcpa-in-india-2014-compliance...Compliance Strategies for India's Unique Cultural and Governmental