Gary Kalman on Corruption and Compliance Programs

Society of Corporate Compliance and Ethics (SCCE)
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The playing field for anticorruption never stops changing, with new laws and new risks constantly arising. To help sort things out, and to gain his insight into other compliance challenges, we sat down with Gary Kalman, Director of the US office of Transparency International.

One of the biggest changes in the landscape, he explains is the enactment of a new law in the US, effective January 1, 2021, which implemented a new ultimate beneficial owner (UBO) regime designed to make it harder for individuals See more +

The playing field for anticorruption never stops changing, with new laws and new risks constantly arising. To help sort things out, and to gain his insight into other compliance challenges, we sat down with Gary Kalman, Director of the US office of Transparency International.

One of the biggest changes in the landscape, he explains is the enactment of a new law in the US, effective January 1, 2021, which implemented a new ultimate beneficial owner (UBO) regime designed to make it harder for individuals to hide behind holding companies. That law will have three key impacts, he reports:

It will increase the ability of organizations to understand who they are dealing with in their supply chain,

Aid law enforcement, particularly in the areas of pirated and counterfeit goods

Make it more difficult for fraudsters to make artificially low bids on government contracts that they have no real plan to fulfill, thereby squeezing out legitimate businesses

He also sees new legislation in Congress that he believes is likely to pass and have an impact on anticorruption efforts. The Foreign Extortion Prevention Act, if passed, will extend anti-bribery prohibitions to the demand side of the equation. The FCPA, of course, is focused on the supply side. The CROOK Act, which stands for Countering Russian and Other Overseas Kleptocracies, would create a fund to help foreign states fight public corruption and develop structures designed to promote the rule of law.

This proposed legislation comes at a time in which corruption has increased as a result of the pandemic. A dramatic rise in government spending has led to an increased number of public tenders globally, with the consequent increase in opportunities for both fraud and corruption.

In sum, it’s a challenging time, and there are reasons for optimism and pessimism. Listen in to see to which side you lean and how you should prepare for what may come next. See less -

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