Compliance & EthicsProfessional

®

a publication of the society of corporate compliance and ethics www.corporatecompliance.org

December

2016

39Corporate compliance has a long way to go: The Wells Fargo tale

Catherine Colyer

35The

costly white lie

Shawn Washington

27Working on ethical behaviorSarah Perry

31Building an optimal

compliance program structure for your organization

Timothy Hedley and Ori Ben-Chorin

Meet Raymie Hamann and Trina Pollman

Conference Networking Champions

See page 14

This article, published in Compliance & Ethics Professional, appears here with permission from the Society of Corporate Compliance & Ethics. Call SCCE at +1 952 933 4977 or 888 277 4977 with reprint requests.

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The June 2015 issue of Compliance & Ethics Professional magazine brought an article by A. Lilian Wylie on

the then-recently published new standard on compliance management systems by

the International Organization of Standardization (ISO)—the ISO 19600:2014.1

According to Wylie, it was still too soon to tell whether the ISO 19600:2014 standard had, by that time, gained little attention because of its publication in December 2014, when compliance officers were planning

their holidays, or because the ISO standard would not be given relevance until endorsed by regulators anyway.

One year after the publication of that article, ISO 19600:2014 seems to have caught

the attention not of Brazilian regulators, but of a particular group of public officials: those engaged with the famous and noisy Lava Jato (“Operation Car Wash”). The operation was named as such because the alleged ring used a currency exchange and money transfer service at the Posto da Torre (Tower Gas Station) in Brasília to launder and move the money acquired by illicit means.2

As most people already know, Operation Lava Jato is a major complex of investigation and prosecution procedures

What Operation Lava Jato has to do with the ISO 19600:2014 standard

» When ISO 19600:2014 Compliance management systems—Guidelines were published, there was a doubt about whether it would contribute to a convergence of standards in compliance.

» When it comes to Brazil, ISO 19600:2014 has definitely caught the attention of the public prosecutors engaged in the Brazilian Operation Lava Jato.

» The investigated companies entered into leniency agreements that provide specifically for the implementation of compliance programs meeting ISO 19600:2014.

» This specification of a standard to be met shows a certain concern with the quality of the compliance programs that investigated companies undertook to implement.

» If adopting ISO 19600:2014 as a standard will turn into a trend in Brazil remains unclear; however, it is a step forward when it comes to creating awareness about the quality of compliance programs.

by Maria Virginia Mesquita Nasser

Mesquita Nasser

ISO 19600:2014 seems to have caught the attention…

of a particular group of public officials.

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being conducted in Brazil with the purpose of uncovering the corruption schemes involving large construction companies, politicians, executives of Petrobras (the giant oil state-owned company), and other state-owned companies. The operation has been largely relying on leniency agreements, in exchange for additional fact-finding, entered into by some of the investigated companies and their executives.

Pursuant to the leniency agreements, in trade for a decrease on the penalties to be imposed, the companies undertook to: (1) cooperate with the investigations, providing further information on the corruption schemes; (2) pay considerable fines (in the case of Andrade Gutierrez, for instance, the fine imposed was of BRL 1 billion, approximately $306 million US dollars); and (3) adopt compliance programs in accordance with the ISO 19600:2014 standard.

Yes, the leniency agreements specifically provided for the compliance programs to be implemented in accordance with the ISO 19600:2014 standard.

Two factors seem to have influenced the public attorneys in specifying this standard for the compliance programs the defendants undertook to implement. First, because the aim of Operation Lava Jato is to be a turning point in prosecuting and preventing corruption in Brazilian history, it would not suffice to impel the companies involved in corruption to

implement just any compliance program in exchange for more lenient penalties. It was necessary to ensure that the compliance programs to be implemented would meet certain standards, especially in terms of effectiveness. Also, the ISO 19600:2014 provides, among other patterns, for the retaining of documented information on fundamental elements of the compliance programs, such as risk assessment,

training, and monitoring. This would the allow public prosecutors in charge of the leniency agreements to do a more accurate assessment of the quality of the programs implemented and, hence, of the

proper performance of the obligation to implement them.

If the implementation of compliance programs that follow the ISO 19600:2014 standard by companies entering into leniency agreements with law enforcers will lead to the spreading out of this pattern throughout compliance practices in Brazil is still to be seen. In any case, it is a step forward in the long path of creating awareness about the quality of compliance programs in the country. ✵ 1. A. Lillian Wylie: “ISO 19600:2014 Compliance Management Systems:

Guidelines” Compliance & Ethics Professional, June 2015, pp 63-662. Operation Car Wash. Wikipedia. Available at http://bit.ly/op-car-wash

Maria Virginia Mesquita Nasser (maria.virginia@nasser.adv.br) is Of Counsel at Nasser Sociedade de Advogados in São Paulo, Brazil.

Yes, the leniency agreements specifically

provided for the compliance programs to be implemented in accordance with the

ISO 19600:2014 standard.