“The first significant reforms to the U.S. export control regulations in International Traffic in Arms Regulations (ITAR) and U.S. Export Administration Regulations (EAR) are about to take effect.

With the 30-day Congressional notification period concluding on April 7, 2013, the initial changes to the USML, comprised of (1) revisions to USML Category VIII (Aircraft and Related Articles), and (2) the establishment of a new USML Category XIX (Gas Turbine Engines), were published by the U.S. State Department on April 16, 2013 in the form of a final rule (ITAR Initial Reform Rule). The ITAR Initial Reform Rule is effective 180 days after publication or October 15, 2013.”

“Russia’s recent efforts to combat bribery have met with mixed results in recent years, as publicized initiatives have not yet resulted in significant change on the ground. But change is palpable. For example, Russia’s Transparency International ranking (reflecting public perception of corruption) has gradually improved over the past five years (from 147 in 2008 to 133 in 2012), although it remains on par with countries such as Iran and Nigeria. Russia’s ability to attract capital is very much tied to whether or not the Russian Government can make significant progress in combating this economic and social problem in the coming years. The new Anti-Corruption Law could be a step in that direction…

Among other requirements, the new Anti-Corruption Law imposes an express obligation on ‘organizations’ to develop and implement internal controls designed to combat corruption. By comparison, the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA) do not impose internal controls as broadly. While the UKBA allows for an ‘adequate procedures’ defense for companies that maintain such controls, and while U.S. enforcement officials often mitigate penalties against companies with compliance programs, Russia’s new Anti-Corruption Law essentially imposes a strict liability standard for companies to maintain these programs.”

“Now more than ever, there is increased regulatory pressure on organizations – and their Boards of Directors – to create and maintain effective ethics and compliance programs…

[A]ntitrust/competition prosecutions are on the rise, product safety and quality issues are increasingly viewed as ethics and compliance issues, business partners and supply chains are under scrutiny with such laws as the California Transparency in Supply Chains Act, the DOJ is focusing on insider trading, U.S. FCPA prosecutions are increasing, the UK has enacted the Bribery Act, and the Dodd-Frank Act requires sound ‘speak up’ programs and establishes an SEC Whistleblower Program.

What is the net effect on the Board? CEOs and Board members are increasingly under the microscope – and under pressure to uphold both compliance and ethics oversight and company leadership responsibilities.”

“[A]n amendment to the Corruption of Foreign Public Officials Act (CFPOA) has been approved by the Senate and is currently before the House of Commons. Bill S-14 is intended to address certain criticisms of the existing legislation, most notably from the Organisation for Economic Co-operation and Development (OECD), an international organization of 34 countries of which Canada is a member…

It is important for companies operating internationally, especially in developing nations, to have appropriate policies and procedures in place to ensure compliance with the CFPOA and other applicable anti-bribery legislation throughout the world. When entering into transactions with companies that also operate internationally, it is important to ensure appropriate due diligence is conducted and appropriate language is contained in contracts relating to the transaction to minimize the possibility that your corporation will attract liability through under the CFPOA and other applicable anti-bribery legislation through its association with proposed business partners or other counterparties.”

“On May 7, 2013, Senator Carl Levin (D-Michigan) introduced a bill (S. 884) that would establish a ‘watch list’ and a ‘priority watch list’ of countries that facilitate or engage in cyber theft of trade secrets from the United States.

Called the ‘Deter Cyber Theft Act,’ the bill would require the Director of National Intelligence (DNI) to develop and maintain watch lists of foreign countries ‘that engage in economic or industrial espionage in cyberspace with respect to United States trade secrets or proprietary information,’ and provide a report of these lists annually to the appropriate congressional committees.  By identifying the DNI as point person, Levin is making a strong statement that he regards trade secret theft via computers as a major national security threat: the DNI post was established as a response to the September 11 attacks, and the DNI’s job is to integrate the federal government’s intelligence-gathering and analysis across all agencies. The DNI is also the principal intelligence advisor to the President.”

“The size of the penalty catches the eye, but beyond the whopping number is a sizeable lesson to be drawn from such enforcement actions: when a company forgoes the expense of maintaining its ITAR compliance system, it risks paying a much greater price if a breakdown occurs.

Folks tend to gripe about the money they shell out to have oil changed, filters replaced, or tires rotated.  But the smart vehicle owners among us know that, however much we may complain at the time, we are paying only a pittance in the present to prevent a future fiasco.  Maintenance and upkeep of a vehicle are key to long-term performance and, maybe more importantly, critical to avoiding that terrible day where your ride gives out on you, leaving you alone and stranded on the highway-side, your engine billowing smoke, while all the other drivers cruise past you, smug in their well-kept cars.

Similarly, the breakdowns that allegedly led to the Raytheon settlement were eminently avoidable.  According to a State Department press release, the Office of Defense Trade Controls Compliance (DTCC) determined that ‘numerous violations demonstrated a recurring, corporate-wide weakness in maintaining effective ITAR controls.’”

“With the suspension of sanctions by the West and the enactment of Myanmar’s new Foreign Investment Law (‘FIL’) on 2 November 2012, Myanmar has become an exciting emerging market. The FIL has been viewed as being broad brush and vague in nature. However, it gives contracting parties autonomy to agree how they will resolve any disputes that might arise between them.

The New York Convention enables contracting parties to resolve a dispute through arbitration in a neutral country and to enforce arbitral awards in any country that is a signatory to the convention. The grounds upon which an enforcing court may decline to enforce a foreign arbitral award are limited. Prior to Myanmar’s accession, there were already 148 signatories to the New York Convention, a reflection of its importance and success… 

Myanmar’s accession to the New York Convention is a significant positive step but much remains to be done to give effect to it.”

“Multinational businesses are subject to a patchwork of laws of the various jurisdictions in which they operate. Complying with the myriad rules and regulations can be challenging. Compliance obligations vary from one country to another, even where countries within a market (such as the European Union) have a deliberately harmonized approach. To add to the complexity, requirements under one jurisdiction’s laws sometimes create tension with another’s. For example, more and more companies are implementing due diligence processes for engaging third parties in order to reduce the risks of violating anticorruption laws, such as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act 2010 (U.K. Bribery Act). However, their due diligence programs may unwittingly expose them to risks under privacy and data protection laws around the world.

More than 70 countries currently have a privacy or data protection law. These laws regulate the collection and use of personal information, which generally means any information pertaining to identified or identifiable individuals. Because anti-corruption compliance programs often involve collecting and using information about individuals to perform background checks, scrutinize red flags, or conduct internal investigations, these programs fall within the scope of the privacy and data protection laws. In order to carry out such activities lawfully, a company conducting due diligence on third parties may be required to notify concerned individuals about the company’s privacy practices, obtain their consent to the collection and use of the personal information, establish agreements or other controls to share the personal information with affiliates and service providers, or obtain approvals from privacy regulators. Thus, performing adequate anti-corruption due diligence while respecting privacy obligations can be challenging, but can be accomplished.”

“On January 1, 2013, Russia implemented an amendment to its anti-corruption laws that appears to go beyond the reach of both the U.S. Foreign Corrupt Practices Act (‘FCPA’) and the U.K. Bribery Act (‘UKBA’) to the extent it requires all corporations organized in Russia to develop anti-corruption compliance measures.

The new law, or Article 13.3, ‘The Obligation of Organizations to Undertake Anti-Corruption Measures’ (‘Article 13.3’), amends Russian Federal Law 273, ‘On Countering Corruption’ (‘FL 273’), which Russia enacted on January 10, 2009… Until the passage of Article 13.3, FL 273 did not impose any affirmative obligation on companies doing business in Russia to implement anti-corruption compliance measures. Now it does…

If your company is doing business in Russia, Article 13.3 likely will apply. Although not entirely clear, if your company already has a compliance program in place that meets the standards set forth in the guidance from the U.S. and U.K. authorities, it is unlikely that additional measures will be necessary to comply with Article 13.3 as long as the existing program is specifically applicable to your Russian operations.”

“… this raid follows a probe initiated by the Federal Trade Commission (FTC) of several steel producers for alleged price fixing of galvanized sheet iron, color steel sheets, and cold-rolled plates. Last year, the Fair Trade Commission alleged that the steel companies regularly had meetings to collude with each other on prices for these products. The FTC also alleged that Dongbu, the largest supplier, increased it prices first and the others followed and that this price increase indicated a pattern of price fixing. In December 2012, South Korea’s Supreme Prosecutors’ Office fined several of these steel producers, including Posco C&C, Hyundai Hysco, Dongbu, SeAH Steel and Union Steel, a combined fine of $291.7 billion. The FTC had investigated these entities since 2009 and has been investigating the steel industry since as early as 2005.”