The challenge of managing multi-jurisdictional regulatory investigations
Global businesses will continue to be challenged in relation to co-ordination and strategy in connection with investigations involving multiple regulators. An understanding of the underlying framework is critical.
Changing expectations in relation to co-operation
The expectations of regulators across the globe in relation to the assistance provided by corporates to facilitate proceedings against individuals is subject to change. The US Department of Justice, for example, has signalled that it will expect corporates to be proactive in providing evidence to support proceedings against individuals. Similarly, in the UK the Serious Fraud Office continues to promote self-reporting.
Negotiating and reaching global settlements with multiple regulators
Cross-border co-operation between international regulators is now the norm, underpinned by formal agreements in many cases. However, in 2015 we are likely to see further examples of tensions between regulators in connection with achieving global settlements, with each regulator having their own priorities and political pressures. By extension, it will become increasingly complex for business to navigate their way to multi-jurisdictional settlements.
Enhanced focus on senior management
Across the globe, governments and regulatory agencies will focus on bringing senior executives to account for their conduct in the context of regulatory failures by corporates under their control.
Impact of previously agreed global settlements
Global settlements may be restricted by the terms of previous settlements (for example, pre-existing Deferred Prosecution Agreements (“DPAs”)) in trying to achieve a cross-border resolution with multiple regulators.
The emergence of regulators
Significant enforcement is no longer solely the preserve of the United States regulators. Recent activity against global corporates by government agencies in China, the Netherlands and Brazil, for example, indicates that businesses and senior management must be aware of the changing political and regulatory dynamics in the counties in which they do business. We expect this trend to continue.
Navigating economic sanctions
The economic sanctions framework is complex and fast-moving in response to political change. There seems little indication at this stage that relations with Russia will thaw sufficiently to allow a return to normal business trading. Businesses in the financial institutions, energy and transport sectors, for example, will continue to work through some complex issues in connection with the impact of Russian sanctions, including establishing and enhancing relevant compliance frameworks. We may see investigations and enforcement in connection with breaches of this complex framework. Proposed changes in relation to the United States’ relationship with Cuba may also bring challenges.