When Did Corruption First Appear?
Financial crimes, in particular corruption, are as old as our human civilization. In the historical records, the first ancient Egyptian dynasty that existed nearly 3100 BC, documented its first case of corruption in their judicial records.
From the Roman Empire to the Soviet Union, corruption has caused the downfall of colossus empires and civilizations by weakening the internal governance structures and damaging the credibility of government institutions as well as law enforcement agencies.
Nations do not vanish due to hunger or poverty but due to the failure of governance structures caused by corrupt practices. Corruption leads to exploitation, inequality, injustice, coercion, and oppression.
Corruption exists everywhere and on all levels. From statesmen to bureaucrats, and ordinary to high-income population, corruption has always been widespread.
How Is Corruption Addressed in the Contemporary World?
In the contemporary world, government organizations along with transnational regulatory bodies have anti-corruption regulations in place that all industries, particularly financial industry, are obliged to comply with.
Recently, the U.S. Department of Justice (“DOJ”) came up with a one-year pilot program, which intends to motivate firms to disclose voluntarily the misconduct relating to the Foreign Corrupt Practices Act (FCPA) which implicates complete cooperation on behalf of the firms to boost the anti-corruption compliance program.
The business landscape is always evolving due to their shifting channels to market, business profiles, clients served, channels to market, and geographic footprints. Therefore, the relevant compliance programs must keep evolving too.
The Department of Justice (DOJ) has pressed on the need for a Corruption Monitoring Process to check if the compliance program works.
What Strategy Should a Financial Firm Use For Corruption Monitoring?
Financial firms are recommended to evaluate their goals and strategies for the corruption monitoring process. While there are firms that pay more attention to data analytics, and then there are others that primarily focus on trends and outliers rather than focusing on granular testing of sensitive transactions.
Take, for instance, firms may primarily focus on third-party relationships that focus on monitoring business courtesies. Especially in cases where the firm employs the market by using agents and channel partners.
While there may exist various approaches to what it implies to have a “best in the market” compliance program relating to Global Corruption Monitoring, the right approach depends from industry to industry and company to company
The most effective Corruption Monitoring Service will have a monitoring program is a risk assessment. The risk assessment will direct you in determining the components of your monitoring program. It also enables an organization to assign a risk rating to each of its divisions and locations.
Financial corporations can then choose how to carry out Ongoing Corruption Monitoring after the risks have been identified and given priority. Reviewing the risks the business confronts and ensuring controls, rules, and procedures are in place to reduce those risks will constitute monitoring.
A financial business must choose how to distribute its resources in order to ensure that corruption risks are reduced. It might choose to do high-level evaluations only for risks that are more modest and in-depth reviews for risks that are further up. Since modest risks might eventually turn into greater dangers, it is important to keep an eye on even minor risks.
Employing an effective corruption monitoring solution and the identification of any potential bribery or corruption risks are the two main goals of a compliance audit. Any red flags that are identified during an audit should be handled with further investigations and risk alerts.
The MLROs who execute the compliance audit should have the skills and competence necessary so that the audit brings out the desired results. The following abilities are necessary for the audit team members: first of all, MLROs must possess familiarity with all applicable anti-corruption rules and regulations, including those in the jurisdiction where the business is being conducted, including the FCPA, the UK Bribery Act, and any others.
Providing financial services to clients that are actively involved in corruption may always bring forth a number of business risks for a financial corporation. A firm could wind up suffering the consequences of conducting business with criminal clients. Therefore, investing in Corruption Monitoring Solutions always goes a long way.There isn’t a best-in-class Corruption Monitoring Services that monitor corruption. It’s possible that what performs well for one firm won’t perform as well for another. MLROs should try to build and operationalize compliance Global Corruption Monitoring systems that work reliably and properly identify the types of corruption risks unique to their industry and companies and reduce those risks, rather than pursuing the most cutting-edge, data analytics-driven strategy.
