IRM Hazard Gathering 2008 raising the amusement

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Deliberate advancement of hostile to pay off/against IRS evasion consistence administration ... Relationship in the middle of debasement and tax evasion. Relationship in the middle of debasement and ...

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Slide 1

"Only One Rotten Apple" Leader – Marie-Louise Rossi , FIRM Head of Insurance and Risk Management, New Security Foundation and John Burbidge-King WB MCMI CEO Interchange Solutions IRM Risk Forum 2008 raising the diversion

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Background Post 9/11 increased global between legislative worry about pay off and IRS evasion Concerted advancement of hostile to renumeration/against IRS evasion consistence administration Links to psychological oppressor subsidizing Links to hijack and payoff and also other political/fear monger dangers

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Overview Implications for corporate administration at all levels, yet particularly the Board and hazard administration

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Overall Proposition Notwithstanding corporate responsibility to consistence, how dynamic/all encompassing/? endeavor is the hazard administration work/culture? Suggestions for social change, preparing and compensation structures Insured Risks, eg: Directors & Officers Employers' Liability Terrorism/K&R cover Property and business coherence

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Overall Proposition (cont) Management of Uninsured/"Uninsurable" Risks, eg: Reputational hazard Brand esteem Shareholder esteem Corporate survival CRIMINAL PENALTIES?

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Anti-debasement review AbcSure ® review instrument to decide the level of defilement hazard alleviation in an organization's consistence arrangements and business forms Risk appraisal and particular research for business sectors and undertakings Reputational due ingenuity for outsiders in setting of pertinent law, showcase and the debasement environment Consultancy and preparing Delivering custom fitted hostile to debasement moderation forms, both interior and outer Individual Corporate Interchange Solutions Limited All substance AbcSure and the Interchange Solutions logo are ® enrolled exchange checks in the UK.

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Our adventure Definitions, backgound and law People chance The corporate measurement Criminality and psychological oppression Discovery Risk ~ drawback and upsides References

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Corruption: "The abuse of depended power for individual pick up." Bribery: "An offer or receipt of any blessing, credit, expense, remunerate or other preferred standpoint to or from any individual as an affectation to accomplish something which is unscrupulous, unlawful or a rupture of trust in the direct of the venture's business." Extortion "The manhandle or danger of force in such approaches to secure reaction In installment or different things of significant worth" Some definitions

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Corruption canvas "Yet ~ this is the way you need to work together to win the agreement in… " Financial weights (individual and corporate) Banking framework Mortgage misrepresentation Competition ~ level playing field Economic cost of debasement Associated with other wrongdoing Emerging settlements and industry understandings UK SMEs and shortcoming in the inventory network.

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Legal and administrative scene United Kingdom (L) Prevention of Corruption Acts 1906 and 1916 (L) Anti Terrorism Crime and Security Act 2001 (L) Proceeds of Crime Act 2002 (L) Fraud Act 2006 (L) Company's Act 2006 (L) 3 rd EU Money Laundering Directive and UK AML (P/R) Listing and FSA Rules National laws in different purviews (counting Scotland) Foreign Corrupt Practices Act (USA) Conventions OECD Convention UN Convention Against Corruption UN Global Compact NB UK Law Commission drafting another hostile to gift and defilement charge

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Our excursion Definitions, backgound and law People chance The corporate measurement Criminality and psychological oppression Discovery Risk ~ drawback and upsides References

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People fix ~ not organizations

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What is this?

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23 year old graduate Ben has worked for Sharpes Media plc for 4 months. The local director of Dynamedia, a long standing key provider, called Ben to let him know the amount he delighted in the business relationship. Ben is complimented. After a week, Ben got an unmarked instance of wine, conveyed to his home. Inside he finds an envelope set apart "With Thanks" containing a check for £100. Ben accept the blessing is from Dynamedia, in spite of the fact that there's nothing on the case to show this. Somewhat credulous and uncertain whether this is ordinary he considers reporting the blessing to his operations director, a marginally remote woman in her late 50's. He flounders and asks a partner more his age. Linda let him know "Gracious ~ you as well? All things considered, there's no manage against it; it would be impolite not to acknowledge. In addition, keeping the providers on-side means we can show signs of improvement rates for our customers… so it's a win-win circumstance all round". Ben banks the check. He puts progressively more business with Dynamedia, supported by their coordinating liberality and what he sees as their acknowledgment of his building a decent individual relationship. Ben and his associates are being prepared to get and acknowledge influences. They have been allured into putting more business with Dynamedia through the receipt of progressively unbalanced motivations. These would most likely be seen as rewards by the powers. Prepping

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Risk conduct Examples: Individual The CBRN Team Group Siemens Corporate Enron Market UK Premier League football Denial Wembley plc

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Our voyage Definitions, backgound and law People hazard The corporate measurement Criminality and fear mongering Discovery Risk ~ drawback and upsides References

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Companies may give the structure

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Tone from the top XYZ plc Strategy & M&A Procurement Supply Chain Financials & execution Board Management Operations Regulation Management Governance   Direct/roundabout deals stations   'At Risk' Transactions [D&O frail link]

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Suppliers Over-invoicing Bills of amount Procurement Brown envelopes Kickbacks Management Contracts Gain Gifts & Hospitality Favors Sales & Agents Slush finance Customers Where can pay off happen? Workers Joint Ventures & Offset

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Overseas Plants Exports Overseas Agents Customer Cross Shareholding Regulatory Enquiry Media report Buyer Bribed Supply chain sensitivities Provides Key Component

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ABC Limited is a little Borders based maker of specific encoded circuit sheets, just utilized by a little number of aviation, resistance and military clients. One of the organization's key clients is Grantham plc, a prime provider of interchanges hardware to the UK Ministry of Defense. ABC is explored by the City of London and MOD Police after a tip off by an irritated worker about paying fixes to a remote safeguard authority to win a delicate to supply a section government possessed military hardware plant. The Operations Director endures genuine dejection after his house is sought at 0500 and is sent on wiped out leave. The examination totally upsets ABC's creation plan; the lawful and different expenses rapidly heighten. The board finds that their lawful costs protection is inadequate and because of an oversight, the Director and Officer Liability (D&O) protection recharging premium was not paid when it had got to be expected two weeks past to the attack. A money emergency takes after; ABC can't meet its duties to its brokers who have ended up unhelpful in present monetary conditions. Basic conveyances fall behind and as a result, Grantham plc neglects to convey a vital request of infantry radios to the MOD as the option provider to ABC, situated in Canada, can't react to Grantham's pressing interest. Inside two months of the charge, ABC is constrained into chapter 11 and supplies to Grantham plc, now attempting to meet its duties to the MOD, have halted. SME's at hazard

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Our excursion Definitions, backgound and law People chance The corporate measurement Criminality and fear mongering Discovery Risk ~ drawback and upsides References

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Criminals and terrorists????

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Asymmetric Risk Anti-rivalry Money laundering/misrepresentation Triangle of corporate wrongdoing Bribery/defilement/coercion "An obscuring of the lines between psychological warfare, sorted out wrongdoing, pay off and debasement, IRS evasion and extortion is as of now evident. Associations should adopt a more all encompassing strategy to what is turning into a solitary territory of hazard." Fraud Advisory Panel 10 th Annual Review June 2008.

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The worldwide town Business "Trust" Crime & Terrorism "Advantage" Law requirement "Confirmation based"

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Criminal and psychological oppressor chance Links to the criminal system Fraud Money laundering Counterfeiting/IPR Theft Prostitution/Pornography Weapons Bribery & Extortion Terrorism Organized wrongdoing People Trafficking Drugs

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Mountain parkway @ £250 million @ 5% Commission and contracts ( some basic maths!) 5 ambulances @ £50,000 each @ 5% commission = £12,500 for the specialist = £12,500,000 for the operator

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Follow the cash ~ situation "English organization wins real street contract in Bolivia" £12,500,000 for the operator Nice chap, organization sets up bank account(s) Salesman gets kick-once more from specialist Agent has cousin in Colombia and backings family Unbeknown to specialist family near FARC Agent wire exchanges $500,000 through forex shop Transfer got by US Secret Service Collection of assets in Medellin Funds purchase explosives master/materials from ETA utilizes part supports for medications ring in Bilbao Head of ring captured by UK police at Heathrow Extradited to Spain: collaboration UK/Spain/US After 12 months, all of a sudden , Scottish organization and their investors struck by Strathclyde Police

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IPR robbery

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Thoughts so far Relationship amongst debasement and government evasion Relationship amongst defilement and expense avoidance Relationship amongst debasement and sorted out criminal gatherings… at any rate Exposure to criminal indictment Exposure to common obligation in an activity to rec