1. ANTI-BRIBERY & CORRUPTION FOR EMERGING ECONOMIESCompliance Advisory, Risk Assessment and Due Diligence InvestigationsPRESENTED BYKim Marsh, CFE, CAMSExecutive VP, International Operations33 Cavendish SquareLondon, UK W1G 0PWPhone: 44 (0) 207.182.4098kmarsh@ipsaintl.com

2. Margin CallThere are three ways to make a living in this business: be first, be smarter or cheat. John Tuld (Jeremy Irons)CEO of fictional investment bank in Margin Call (2011) 3. About IPSA International, Inc. IPSA International, Inc. (IPSA) has a 20-year history of successfully completing complex multi-jurisdictional investigations in the areas of: Anti-MoneyAnti-Bribery & Laundering Corruption LitigationInvestigative SupportDue Diligence Assignments include large-scale Criminal, White Collar and Financial Investigations for multinational corporations, banking/financial institutions and law firms. 4. Track Record Mid-size Firm > Top-tier Experts > Competitive Rates Preferred AML service provider to 5 major international banks Research capabilities in 20 languages Resources in over 75 countries Emerging markets expertise in Former Soviet Union, LatinAmerica, Middle East, Nigeria, China & Taiwan Offices in New York, London, Phoenix and Vancouver 5. TeamDan Wachtler, President & CEO - 20+ yrs industry veteran; large-scale AML remediation for globalfinancial institutions; security program development, international due diligence, off-shore assetlocation.Kenneth (Kim) Marsh, CAMS, CFE, Executive V.P. International Operations - 35+ yrs industryexpert, due diligence investigations, 25 yrs RCMP Organized Crime Unit focus on large-scale moneylaundering.Robert Weiner, JD, CIPP, Managing Director & Regional Counsel - 20+ yrs legal, investigation andcompliance. Former Director BDO consulting; specialist in anti-bribery/corruption, focused on US FCPAand UK Bribery Act, and litigation support.William Goss, CAMS, Senior Director Anti Money Laundering - 25+ yrs AML investigations, duediligence and fraud. Charter officer of RDC, an AML/EDD database by 20 global financial servicescompanies including Goldman Sachs, Morgan Stanley, Citigroup and Bank of America.Jim Oakes, CFCI, CFE, Senior AML Consultant - 30+ yrs experience investigating international fraud,AML and financial crime prevention with Citigroup, Barclays, Standard Chartered Bank, GE Money andAbbey Santander. Regent of the Board of the ACFE.Robert Cone, MBA, Managing Director, Special Projects - 25+ yrs senior manager with internationalbanks in treasury and broker dealer functions, foreign exchange, derivatives and money markets. 6. ServicesAnti-Money LaunderingIntelligence at Work AML services for a wide array of organizationalconditions, business lines, geographic markets, regulatory situationsand implementation timetables.Investigative Due DiligenceIntelligence at Work Investigative Due Diligence services delivercredible and timely intelligence to support corporate decision makingon acquisitions, investments, business partners, clients, supplychains, competitors, employees and board members.Litigation SupportIntelligence at Work Litigation Support group designs, manages andconducts comprehensive investigative solutions for commerciallitigation, financial and fraud investigations, regulatory proceedingsand dispute resolution. 7. ServicesAnti-Bribery & Corruption Due Diligence Compliance advisory, risk assessment and due diligence investigationsfor corporations, investment banks, private equity & hedge funds Defensible procedures for M&A, investments, litigation support andregulatory enforcement proceedings Initial assessment, key interviews, evidence gathering andanalysis, reporting and implementation of remedial action Conducted in accordance with provisions of the FCPA, the U.K. BriberyAct & anti-corruption laws of OECD signatory countries 8. ServicesEmerging Economies Due Diligence Advanced investigative capabilities and established network of well-placed, highly credible in-country resources Access to expertise and information not readily available - one of thegreatest challenges encountered in emerging economies due diligence Due to the volume of requests from our clients, we excel in the followingcountries:Argentina, Brazil, Chile, Colombia, Peru, Venezuela and Mexico in LatinAmerica; Russia, Ukraine and Kazakhstan in the Former Soviet Union;China and Taiwan in Asia; Nigeria in Africa; and UAE, Qatar, SaudiArabia and Egypt in the Middle East. 9. Regulation & Enforcement Increasing globalization of Anti-Bribery & Corruption regulations Collaborative cross-border investigations and aggressive internationalEnforcement Requirements to Conduct Anti-Bribery and Corruption Due DiligenceAcross Multiple Jurisdictions Risk of Criminal & Civil Penalties for Corporations, Directors,Management and Individuals Fines, Litigation, Debarment, Reputational and Financial Damage See Appendix for Comparison of U.K. Bribery Act & U.S. FCPA 10. Global RegulationU.S. ForeignOECD Anti- Council of Africa UnionRussian Anti-U.S. SEC Dodd-Corrupt BriberyEurope Convention on Bribery Laws Frank ExtractionPractices Act Convention Convention Preventing &(Amended Issuers/ Conflict OECD(1977)(1999) on CorruptionCombating 2011)Minerals (2012) (2002-2003)Corruption (2006) 1977 . . . .1997 1999 2002 2005 2006 2010 2011 2012 . . 2013 Inter-AmericanCanadaUN ConventionU.K. BriberyChinese Anti- ConventionCorruption of AgainstAct (2010)Bribery Laws Against Foreign PublicCorruption (Amended CorruptionOfficials Act (UNCAC)2011) (1997)(1999)(2005) 11. Commonly Encountered RisksCountry RiskPerceived high levels of corruption, absence of effectively implemented anti-bribery legislation andfailure of foreign government, media, local business community and civil society to promotetransparent procurement and investment policies.Sectoral RiskSome sectors are higher risk than others. Higher risk sectors include the extractive industries and largescale infrastructure sector.Transaction RiskCertain types of transaction give rise to higher risks, for example, M&A transactions, licences andpermits, transactions relating to public procurement and charitable or political contributions.Business Opportunity RiskSuch risks might arise in high value projects or projects involving many contractors or intermediaries;or projects not apparently undertaken at market prices, or which do not have a clear legitimateobjective.Business Partnership RiskCertain relationships may involve higher risk, for example, the use of intermediaries in transactionswith foreign public officials; consortia or joint venture partners; and relationships with politicallyexposed persons where the proposed business relationship involves, or is linked to, a prominent publicofficial. 12. Emerging Markets Risk Dependence on large government contracts, critical licenses andpermits Reliance on agents, distributors and third-party intermediaries toobtain business or secure licenses/permits Off-the-record payments to facilitate contracts & licensing Foreign public officials associated with intermediaries & customers Unusual payment arrangements and excessive commission structuresfor subsidiaries, intermediaries & third-parties Payments made to offshore entities Differing cultural values and social realities 13. Third Party RiskThird party intermediaries have been identified as the greatest risk toenforcement of anti-bribery and corruption regulations. (Source: KPMG, 2012)Analysis of U.S. SEC and DOJ enforcement actions indicate alleged use ofthird-party intermediaries to pay bribes to foreign governments increasedto: 100% of U.S. FCPA enforcement actions, from 42% in 2005. (Source: Sherman & Sterling, 2012)Conducting adequate due diligence on third partyintermediaries is one of the six guiding principles of the U.K.Bribery Act.(Source: SFO, 2010) 14. IPSA International, Inc. Compliance Advisory, Risk Assessment and Due Diligence Investigations In-depth investigation of principals, management, subsidiaries, supply chains and intermediaries Background and reputational checks to establish prior association with bribery, corruption, money laundering and fraud Payments to host governments, off-shore entities and related-party transactions Arrangements for securing high-value licenses, permits and contracts Use of middlemen and off-shore vehicles to hide beneficial ownership and financial information 15. Third Party Due DiligenceRisk Assessment determinesIdentifythe extent of Due Diligence Reviewrequired.Six Stages for conductingDue Diligence on:Due Diligence Risk M&A Targets Assessment JV Partners Monitor- High Level - Investors Process Principals Management Board Members Subsidiaries Audit Research Supply Chains Intermediaries 16. Third Party Due Diligence Process ReviewThird-Party Collect documents from third-Identify party (incorporation docs, etc)Risk AssessmentSimplified Due DiligenceHigh Level Due Diligence(Low Risk) (High Risk) Company CheckPerson Check Company Check Person CheckKey company data ID VerificationKey Company DataID verificationSanctions & WatchlistsPEPsSanctions & Watchlists PEPsSenior ExecutivesSanctions & Watchlists Negative News Associates Person Checks on all Sanctions & Watchlists Directors Directorships Person Checks on Key Shareholdings ShareholdersNegative NewsReport Monitoring and Review 17. Summary Industry leader in risk management Senior multi-disciplinary team with deep emerging markets expertise Decades of experience conducting complex white collar crime, anti-briberyand corruption, and AML investigations across high risk sectors andgeographic regions Network in 75 countries, research capabilities in 20 languages Ready access to expertise and resources not available in-house Offices in U.S., U.K. and Canada 18. Contact UsPRESENTED BYKim Marsh, CFE, CAMSExecutive VP International OperationsIPSA International, Inc.33 Cavendish SquareLondon, UK W1G 0PWPhone: 44 (0) 207 182 4098Email: kmarsh@ipsaintl.com New York | London | Phoenix | Vancouver800-997-4772 | www.ipsaintl.com 19. Appendix 20. Transparency International :: 2011 Corruption IndexVERY CLEANHIGHLY CORRUPTNatural resources are often located in countries that rank as highly corrupt on Transparency Internationals Corruption Index.For example Venezuela, Russia, Guinea, Democratic Republic of Congo, Nigeria, Nicaragua, Mongolia and Kazakhstan all scored lessthan 2.9 on the 2011 Corruption Index. By contrast, the U.K. scored7.8 21. Extractives IndustryExtractive Industries TransparencyU.S. Dodd-Frank Wall Street Reform Act (2011)Initiative (EITI, 2002) SEC approval of Section 1504Voluntary regime of 35 participating countriesOil, gas and mining companies listed on a U.S.calling for disclosure by oil and gas, mining exchange are required to disclose what they payand timber companies of payments made toto foreign governments as part of their annualgovernments to further the commercial filings to the Securities and Exchange Commission.development of their resource projects.U.S. Foreign Corrupt Practices Act (1977)UK Bribery Act (2011)U.S. headquartered multinational companies areCovers overseas operations of firms doing held to a higher standard of forgoing bribery evenbusiness in the UK, requires companies to havein countries where it is commonplace.adequate provisions against briberyKimberley Process (2003)Any company that carries on a business in the UKcan now incur liability for the corrupt actions As of January 2012, 76 countries committed to KP(anywhere) of rogue employees or associated which sets out requirements for controlling roughthird parties, even if the companys management diamond production and trade to stem the flow ofknew nothing about the bribery.conflict diamonds. 22. U.K. Bribery Act versus U.S. FCPAProvisionU.K. Bribery Act U.S. FCPABribeNot limited to foreign officials Only bribes (anything of value), Prohibits bribes paid to any person to paid or offered to a foreign induce them to act improperlyofficial are prohibited Advantage ObtainedFocuses on Improper action ratherPayments must be to than commercial advantage or obtain or retain business benefit (except in strict corporate liability).Active vs. Passive Two offenses: (1) Active Offense Passive Offense only the act of Offense of bribing another; and (2) Passive payment, rather than the Offense of being bribed receipt/acceptance of payment isprohibitedCorporate Strict A new strict liability corporate Strict Liability only under Liability offense for failure of a commercialaccounting provisions for public entity to prevent bribery - subject to companies failure to maintain defence of having adequateadequate systems of internal procedures designed to preventcontrols. bribery in place. 23. Continued Provision U.K. Bribery Act U.S. FCPAJurisdiction Organizations that are either U.S. citizens and companies, foreign established in the UK or conductcompanies listed on a U.S. stock some part of their business in theexchange, or any individual acting UK; and individuals who are UKwhile in the U.S. nationals or are ordinarily residents in the UKEnforcement Criminal enforcement only by theBoth criminal and civil proceedingsCivil / Criminal UK Serious Fraud Office (SFO) can be brought by SEC and DOJ Potential Penalties For individuals, up to 10 yearsBribery: for individuals, up to five imprisonment and potentiallyyears imprisonment and fines of up unlimited fines; for entities,to $250,000; for entities, fines of up potentially unlimited fines to $2 million. Books and records/internal control violations: for individuals, up to 20 years imprisonment and fines of up to $5 million; for entities, fines of up to $25 million. Source: VistaLaw 24. ContinuedProvision U.K. Bribery Act U.S. FCPA Facilitation Payments No facilitation paymentsException for payment to a exception, although guidance is foreign official to expedite or likely to provide that payments ofsecure the performance of a small amounts of money areroutine (non-discretionary) unlikely to be prosecuted government actionPromotionSuch expenditures are arguablyAffirmative defence for Expendituresnot improper and therefore notreasonably and bona fide a Bribery Act violation. No similar expenditure directly related to defence to FCPA the business promotion or contract performance Allowable Under No violation if paymentsAffirmative defence if payment is Local Law permissible under written laws of lawful under written foreign country applies only in laws/regulations of foreign cases of bribery of foreign publiccountry official; otherwise a factor to be considered Source: VistaLaw 25. Global Regulation U.S. Foreign Corrupt Practices Act (1977) Inter-American Convention Against Corruption (1997) OECD Anti-Bribery Convention (1999) Canada Corruption of Foreign Public Officials Act (1999) Council of Europe Convention on Corruption (2002-2003) UN Convention Against Corruption (UNCAC) (2005) Africa Union Convention on Preventing & Combating Corruption (2006) UK Bribery Act (2010) Russian Anti-Bribery Laws (amended 2011) Chinese Anti-Bribery Laws (amended 2011) U.S. SEC Dodd-Frank Extraction Issuers / Conflict Minerals (2012) 26. Transparency International (2010)Anti-bribery due diligence is the research, investigation, assessmentand monitoring that the company will carry out on businessrelationships to ensure that it is associated with companies andpersonnel that will behave in a manner consistent with the companysanti-bribery programme.Source: The U.K. 2010 Bribery Act Adequate Procedures(Transparency International)