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Compliance and U.S. Law: An “Excellence in Compliance” Event held on 8 May 2019

The Center for Competition and Commercial Law at the ZHAW School of Management and Law (SML) hosted a joint event with the New York State Bar Association aimed at Swiss companies with international business interests.

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The scope of U.S. law is broad, and the consequences of breaching it are far-reaching. If a company violates U.S. law, it faces high penalties and even higher damages.. As a result, transnational law analysis has become an integral part of compliance. “Compliance and U.S. Law,” an Excellence in Compliance event on 8 May 2019, held jointly with the New York State Bar Association, discussed how Swiss companies can best protect themselves against the long arm of U.S. prosecution.

Bild 2Evaluating a Company’s Corporate Compliance Program
Prof. Patrick L. Krauskopf, Head of the Center for Competition and Commercial Law (ZHAW) started the conference off by explaining how compliance officers should use the guidelines by the U.S. Department of Justice to evaluate their company’s corporate compliance program. He talked about the main factors that prosecutors consider in conducting an investigation of a corporation, giving examples from his personal experience. “The adequacy and effectiveness of a corporation’s compliance program as well as its remedial efforts after a breach are crucial,” Krauskopf pointed out. It will influence whether the prosecutor decides to bring charges or to negotiate a plea or other agreements.

Bild 4Corruption in Developing Countries – A U.S. Law Perspective, in Particular the Foreign Corrupt Practices Act (FCPA)
Remo Decurtins, an associate at Quinn Emanuel Urquhart & Sullivan (Schweiz) GmbH, impressed on participants that corruption is (still) prevalent in developing countries and that it comes with heavy costs for society. He explained that there is increased (often overlapping) anti-corruption scrutiny and enforcement around the globe. Especially the U.S. FCPA is a strong weapon against corruption with an extraterritorial reach. This means that even companies outside the United States, like here in Switzerland, may be targeted by the FCPA. To protect their companies, compliance officers should implement internal rules and procedures to navigate the slippery terrain of compliance practice. Decurtins ended his presentation by stressing that “effective compliance is key!”

Bild 6U.S. Sanctions and Export Controls – Compliance Challenges & Solutions for Swiss Entities
Christine Gschwend, Senior Compliance Advisor at MME, started by providing a definition of the terms “trade compliance”, “sanctions” (including “embargoes”), and “export control.” She went on to explain how U.S. enforcement agencies are rather creative in establishing a U.S. nexus and applying their export control regime to a wide range of extraterritorial incidents. Gschwend also talked about the enforcement trends and impacts of U.S. sanctions and export controls as well as the likelihood of their enforcement. In her closing remarks, she warned that “trade compliance is everyone’s responsibility at all times and that the alternative, ignoring this advice, is the much more expensive option.”

No-Poach Agreements and Suppression of Employee Compensation
Jay Himes, Co-Chair of Labaton Sucharow Antitrust & Competition Litigation Practice, gave participants an insight into non-compete agreements and how their misuse can benefit firms at the expense of workers. These agreements not only prevent competitive wages but also keep specialized employees from getting better jobs and higher salaries. This in turn is bad for innovation, especially in high-tech industries. Therefore, according to Himes, “it is not only important to educate HR personnel but also key executives – and follow-up regularly.” It is essential for companies to consider adopting these practices. In addition, they should apply due diligence in acquisitions and mergers, identify potential labor market.
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Bild 9Failure to Prevent
Peter Utterström, proprietor of Peter Utterström Advokat AB, started by providing a definition of “failure to prevent.” To avoid it, management must take reasonable precautions against non-compliant activities committed by its organization or its employees. In his view, all compliance experts should be aware that failure to prevent entails that “management must ensure their ethics codes are not only approved but also implemented.” To this end, Utterström recommended for these codes to be communicated throughout the organization by (continuously) educating and training employees in applying these rules, as well as in ethical behavior.

Upcoming Conference
The next Excellence in Compliance conference – Compliance in Data Protection and Data Security – will be held jointly with the Zurich Center for Information Technology and Privacy (ITPZ) on 6 June 2019 at KV Business School in Zurich. Please register online.

The person responsible for the Excellence in Compliance event series is Dr. Felix Schraner, Head of Excellence in Compliance at the Center for Competition and Commercial Law.

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