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Conducting effective cross-border virtual investigations

Investigate fraud effectively during COVID-19

Over the past several years, it’s become increasingly clear that international regulators outside the United States are strengthening their focus and scrutiny on issues related to corporate fraud and corruption, and companies are taking notice.

Adjusting to the “normal” of compliance during COVID-19: Conducting effective, efficient cross-border investigations remotely

During the 2019 Association of Certified Fraud Examiners Global Fraud Conference, 97 percent of respondents queried during a panel discussion anticipated an increase in cross-border investigations in the coming years.

The global COVID-19 pandemic and the economic disruption presents two new developments and considerations in this area. First, as organizations quickly adapt and adjust their business to the “next normal” and face increased financial and operational pressures, there is greater opportunity (and, frankly, pressure and rationalization) for fraud and corruption to occur, as employees and third parties may seek to take advantage of weakened control environments and decreased compliance resources. Second, due to new travel restrictions and remote work environments, it can be more difficult for companies to quickly respond and investigate allegations of fraud and corruption.

This presents a unique challenge for compliance officers: In an environment that’s ripe for fraud and corruption, how can they maintain a strong culture of compliance and respond to allegations of potential wrongdoing with more limited resources and an inability to follow their traditional investigative playbook? Scott Roybal, leader of Sheppard Mullin’s Investigations and International Trade practice group, agrees that now is the time for organizations to prepare.

“Management should reinforce and reiterate the organization’s commitment to its anti-corruption and anti-fraud compliance programs. Many organizations are taking proactive steps to ensure the safety and well-being of their employees, cope with new 'work from home' and 'return to work' policies, and brace for the financial impact of the pandemic. While a heightened focus on these critical areas right now is understandable, it is equally important for compliance officers to remind employees, especially those involved in cross-border transactions, of the organization’s commitment to ethical business practices.”

Cross-border investigations (as compared to their domestic counterparts) already pose several distinct considerations, including language barriers, cultural differences, and resource limitations. The inherent unpredictable nature of these investigations makes it almost impossible to apply a “one-size-fits-all” approach, and—as a result—many organizations struggle to carry out such investigations in a thorough, yet effective manner. The current environment further exacerbates these challenges, as companies may be unable to conduct traditional discovery and information collection procedures, site visits, and in-person interviews. Companies will need to adapt their investigative strategies so that they can productively and proactively investigate allegations of potential misconduct outside the United States.

How can organizations adapt and achieve this objective? Read more for four insights for compliance officers to consider in determining whether their investigative approaches are appropriate and effective in the time of COVID-19.

Adjusting to the “normal” of compliance during COVID-19
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