However, law enforcement is becoming increasingly vigilant in investigating these illegal activities. According to a report from U.S. Department of Justice (DOJ), federal prosecutors in 2016 filed 50 charges related to labor management offenses, which include bribery; and 416 official corruption charges.
As defined by the Wolfsberg Group, bribery is a form of corruption that involves the offer, promise, request, acceptance, or transfer of anything of value either directly or indirectly to or by an individual in order to improperly induce, influence, or reward the performance of a function or an activity. For example, a senior executive from Adidas was recently exposed as part of an on-going federal investigation for secretly funneling money to the families of high school senior basketball players to steer the players in the direction of attending a particular college. The executive violated a number of criminal laws, and so far, the fallout from the latest NCAA allegations and federal investigation has led to the arrest of 10 individuals, including college basketball coaches, regarding the alleged bribery, corruption and fraud scheme.
To emphasize the importance of Anti-Bribery and Corruption (ABC) compliance, the Wolfsberg Group recently issued guidance that advised firms to ensure that they have an ABC program that includes the following elements:
- Firm-wide policies and procedures
- Establishment of a control environment to mitigate:
- Third-party provider risk
- Principal investments and controlled fund acquisitions
- Giving anything of value
- Risk assessment
- Training and awareness
- Monitoring for compliance and controls
- Customer-related corruption risks
Implementing and maintaining an effective ABC program can protect a corporation from unnecessary reputational and financial risk. However, the challenges of unmanageable volumes of corporate data enable these unlawful activities to occur unabated. The cost is too high for firms to ignore ABC risks which are often easily detectable through new artificial intelligence (AI) technology.
Advanced AI and machine learning technologies can assist ABC teams, compliance staff, audit teams, internal investigators, and consultants to detect potential ABC risks. By employing a set of AI agents to query a firm’s core accounting/finance system, travel/expense reporting system, trade finance data, third-party vendor lists, and internal e-mail systems, AI and machine learning solutions can extract actionable evidence from the data to detect and report instances of anomalous activity possibly related to potential ABC risks.
Some of the AI techniques used to identify ABC risks include advanced entity resolution and verification, UBO analysis, deep Web analytics, NLP (Natural Language Processing) Web scraping, network analysis, volumes and values analysis, and more. Through the power of an AI-based risk mitigation solution, companies can prevent ABC missteps by improving internal controls and providing feedback for corporate leadership with root cause analysis and process improvement.
Corporations of all sizes and types need to ensure that they have a strong and viable ABC program in place to protect their organization from legal and reputational risks associated with these violations. Through the utilization of AI for mitigating bribery and corruption risk, corporations can radically improve the way they protect themselves from criminal liability and how they conduct business.
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