Global Corporate Compliance

 Welcome, I think today's our 40th research feature webinar, so you see, we started about a year ago and we've managed to organise, to record 40 seminars or webinars, they are all online under the banner Research Futures.

You're more than welcome to take a look at them.

We have a very good library now of knowledge really of topics on very different contemporary issues.

My name is Leila Choukroune and I'm professor of International Law, Director of the University of Portsmouth Democratic theme.

And I'm delighted today to welcome our Portsmouth colleague, Dr Branislav Hock.

Branislav is a senior lecturer in economic crime at the Institute of Criminal Justice.

He's the author of Extraterritoriality and International Bribery The Collective Action Perspective, recently released in 2020.

Congratulation Branislav for that.

He's been involved in a broad range of research activities related to transnational economic crime, anti-corruption and compliance.

He's also the founding member of the European Compliance Centre and his work also for law firm, where he was advising on various compliance issues.

So this is really interesting because this topic, you know, corporate compliance is particularly important and particularly important today.

The last thing I'd like to say is that Branislav worked as a researcher at the Tilburg Law and Economic Centre before joining our university.

He completed his PhD in anti-corruption law as we were discussing, saying very interesting, very important topic today in particular.

So without further ado, Branislav the floor is yours.

Thank you very much, thank you very much for inviting me.

I really appreciate that.

And welcome, everyone.

I'm really grateful for finding time to discuss compliance and corporate crime.

I want to speak today about global corporate misconduct.

And I will use an example of international bribery in order to look more in-depth on the topic of global corporate compliance as a research topic, because I understood this to be a research future seminar.

So I will start opening some questions or practical questions as well as theoretical questions, how we can go on with this topic and engage in research collaborations, interdisciplinary research, both as researchers, but as well in connection with the practise.

So I will be as well kind of suggesting some questions and I would be more really grateful if you would have any ideas or reflections so that we can engage in a discussion.

So I plan to leave some time for discussion as well.

So if you have any questions, don't hesitate to unmute yourself or share in chat and I will be happy to address them.

So let's start now.

My first point here is that as a research topic, I think what is important and interesting for lawyers, economists, criminologists and beyond is to look at global corporate conduct.

So this is my main centre of interest in my research.

And first key argument is that if you look at global corporations, multinational corporations, generally, these are positive members of society.

They create jobs, they innovate.

They may enhance economic development.

On the other hand, there are many challenges associated with the operations of multinational corporations and global corporations.

These challenges are associated with market failures and environmental disasters and as well, economic crime that I will focus on today little bit more than on these other topics.

And the third thesis is that that global corporate conduct at the same time, therefore presents regulatory challenge.

It's a really challenging to regulate in one way or the other activities of these global corporates, multinational corporations.

So while you can think about regulation in terms of criminal law, administrative law, you can as well think about the regulation of multinationals and large corporations in terms of social norms and soft law, so legal centralism is not the only perspective here.

So I will focus on one response to that global corporate conduct, and that's, in my judgement, is a notion of corporate compliance.

So here I will define that phenomenon and then set corporate compliance in the context of of international bribery, how is has evolved there, what the problems are and further questions for further research and practise.

So I would define that notion of corporate compliance in four ways.

And there are four elements to my understanding of corporate compliance.

And please correct me if you or or engage in discussion, if you have other ideas about what corporate compliance is.

But in my understanding, corporate compliance is sitting in for the internal effort to prevent and detect violations of laws and regulations.

But not only goes much beyond as well as internal effort within the organisation or corporation to prevent and detect violations of internal rules, ethics norms, policies and guidelines.

So this is kind of a first element of my understanding of compliance, some internal effort within the organisation to prevent and detect violations of certain laws, regulations and social norms, ethical standards.

These internal efforts are generally distributed across an organisation, this we call that compliance function.

I will come to this notion in a second.

And generally, though, manage organisation implements its compliance function through its ethics and compliance programmes.

So this all kind of creates some internal activities, internal regulatory processes within organisation.

This is not necessarily sufficient to call this compliance.

I would say the key issue here is that the above these three points, as I understand it, are not really primarily the matter of some strategic management or business decisions or corporate governance, but they are actually imposed by state regulation.

And I think that's important.

And it what creates that notion of compliance.

It obliged obliges organisations to implement internal measures in ethics and compliance programmes as a matter of law.

But usually it's associated with significant ambiguity.

What should be actually done to comply with the law, but I will come to that little bit later.

I would stress here that I understand it.

It goes, you know, if you are, for example, an insurance company, it's might be a matter of strategic management to have internal processes that monitors violations of law and fraud, for example, because it simply save you a lot of money, because you don't want your clients or employees to be cheating the company and the company to be losing money.

It might be a bit different.

So this is not this would be a matter of strategic management.

But if you are a bad corporation, let's say, and you have incentives to bribe in difficult jurisdictions, then perhaps it would not be necessarily always the decision of strategic management to to have an anti-bribery programme.

So here the notion of compliance, I understand it is a matter of state regulation that delegates certain to some extent delegates certain regulatory powers to organisations.

So that's the key definition for me.

And I will set this in the broader context, how it has evolved in the context of international bribery and corruption in a minute.

You see on the right hand side some ideas around the so-called three lines of defence model, I will perhaps not go intohuge detail here, but it shows how different internal efforts should be distributed across organisation and these different elements.

But I don't want to be too technical.

We can we can have a discussion later about how this model.

So corporate compliance, so far so good?

Are you with me?

Everything fine?

And anyone would have a different notion of of compliance.

I'm just double checking whether we are still where you are with me.

That's fine, I think it is.

I will have the question at the end, really.

OK, thank you.

Thank you.

So.

So from from this, I would move into the case study of economic crime as one example of global challenges, and I will use that example to show how these corporate compliance requirements have become the norm and then become the mainstream, let's say, when it comes to regulation of global corporations.

So here we speak about certain type of global corporate misconduct it can be associated with money laundering, bribing, which can be associated with all types of fraud, certain types of these activities.

Historically, they were actually tolerated and largely unregulated.

So if you think about international bribery, for example, it's to some extent a moral issue because until, let's say, late 90s in a number of countries such as Germany or France, these international bribes were actually tax deductible.

So these were actually openly supported by national governments.

While bribing domestic politicians, for example, would be would be crime and has been crime for many, many years, bribing overseas politicians by big corporations was not necessarily illegal until late 1990s.

Which might not nowadays 20 plus years later, sounds unbelievable, perhaps, but it was like that.

So historically there was certain types of activities of a global corporation has been aware tolerated, even if they were not tolerated later on, let's say, of the 2000s, until perhaps now there is a general discussion about a lack of effectiveness of regulations and laws.

There are many legal gaps, jurisdictional issues.

Many of these large corruption schemes are very difficult to police when there are questions who should be a persecutor, for example.

So there are many legal gaps and there has been many legal gaps in covering global corporate misconduct.

But the new era has begun.

And I would say it's a era of global enforcement, mainly stemming from activities of large enforcement authorities, large countries, especially the United States, which has become historically with the seventies, with the special laws.

But they start really enforcing them only in the last 12 years, let's say.

So we have new laws with so-called extraterritorial application that I will cover it in the second what I mean by that, we have a global enforcement in all type of that kind of types of economic crime areas, including international bribery, money laundering, fraud, IP crime, et cetera.

And with these new laws and it's important will come is what comes are new types of measures and obligations that are imposed on corporates, including effective compliance programmes that they need to have to prevent certain types of these economic crimes.

And you will see in a minute how these compliance programmes originally and they are very important function really is that they play a very important role during negotiations with enforcement authorities.

So many of these and global enforcement action, they actually do not end up in front of the court, really, but they end up with out-of-court settlement.

And during these settlement negotiations, as you will see these compliance programmes matter a lot.

And I have I'm working on a paper.

I have done research as well, empirical research in this area, and I will present in a second.

So this is a general context if you look into more specific example.

So we see, for example, international bribery and which we see in the table we have a briber, who is usually a global corporation that has strong ties to a number of countries, let's say country ABC.

It uses various intermediaries in order to provide anything of value to foreign public officials in faraway jurisdictions.

So, for example, we have a global corporation, which is a joint venture of French, US and UK companies.

It bribes through various intermediaries and shell companies, let's say foreign public officials in in a third country, let's say, for example, in energy sector, could be country in West Africa, for example, and they bribe them in order to obtain or retain business.

So it is an example of global corporate misconduct historically, this type of misconduct was not only in some countries tolerated, even supported, because some of these bribes could have been deducted as a business expense.

Now, the times has changed.

We have, for example, the Bribery Act 2010 since 1977 we have Foreign Corrupt Practises Act.

These laws have been increasingly enforced.

And these laws as well, and especially enforcement strategies of enforcement authorities, include in their include stress the importance of corporate compliance and global corporate compliance.

So this is kind of like context, the basis and how this effort has really become a global effort.

Well, that's what I actually covered in the book.

Last week we have a new edition of the book.

I have to say I'm happy about it.

So there's some more cost efficient version or how to say we have a paper back.

So I'm really happy about it.

And what I was looking at there is how US starts enforcing its on the bribery laws through settlement negotiations with a number of corporations you see in the blue colour corporations that come from all kinds of countries, especially France, Netherlands, Germany, Switzerland, but more recently as well, Brazil, as well as UK companies that settled allegation of their international bribery with the United States authorities.

You see on the one hand, right hand side in orange colour, US corporations, etc., the US authorities and you see some disproportion, at least in the earlier years, let's say until 2018 from 2008 until 2018, that thirteen point six billion dollars were imposed on non US based firms, whereas two point three billion were imposed on US firms.

I don't say this protectionist enforcement or not, but there are many good explanations why it was so.

But the simply what I want to show on this is that set these requirements to have effective compliance programmes and adequate compliance programmes are relevant globally and not only because of the US enforcement, but this type of enforcement discussing the Margraf have incentivise others to implement similar measures.

So nowadays in the last three years, you really see an increase of enforcement that changes in the regulatory landscape in a number of European countries as well in Brazil.

So UK, France, Brazil, they all started enforcing their own anti bribery laws.

They as well adjusted their national legal systems, for example, that allow them to to settle those allegations, which large corporates and to reflect and kind of examine during these negotiations, whether tjese corporates, has had effective compliance programmes.

So it actually led to it has resulted in some in these large cases in global enforcement regimes where many jurisdictions overlap.

There are various players.

And it's really interesting to see these global enforcement games as they evolve, where some countries might be competing to assert jurisdiction over global corporations.

Other countries have started cooperating.

So here you can see last year, Airbus case, for example, where we see a joint investigation team established between United Kingdom and France.

And in addition, this joint investigation cooperating, coordinating their enforcement actions with the US enforcement authorities, leading to one global settlement where the three jurisdiction collected huge amounts of money.

France collected $2.29 Billion, UK collected$1.09 Billion, and the US only $227 million as sanction, out of court sanction as a result of the settlement in between that corporation, a number of countries that claimed to have appropriate jurisdiction over that bribery case.

So you will see in a minute during those negotiations, for example, in this case, but in many other.

The evidence of effective compliance programmes and kind of being able to show to those enforcement authorities that there was compliance programme in place and that corporations are willing to improve it, perhaps have earned the corporation out-of-court settlement.

So I interviewed 14 experts that has been involved in negotiating this out of court settlements.

This my recent paper on policing corporate bribery.

And so I will try to reconstruct what is really happening during those negotiations and how important corporate compliance programmes are during these negotiations.

So it's really interesting, as both future researcher  topic to be looking into these interactions between various enforcement authorities and global corporates, including some of these more concrete mechanisms such as out of court settlements.

But not only I think it's a bigger example of the interaction between public and private policing.

And you will see that that corporation, for example, in Airbus case, they have done a lot of work to really investigate that case and hand the evidence to enforcement authorities.

An example, private policing.

So I will go on these global settlements I had look really what happens during these negotiations, extremely interesting.

So I think this is really the core of that corporate compliance or where really large corporations become really incentivised to take compliance seriously.

And I think you see as well in more broadly beyond the United States, perhaps beyond the United Kingdom and Central Eastern Europe, you see an increase in, you know, in discussions about compliance and compliance programmes.

And it's presented as, you know, some good business solution, having good business.

But I think it's also important to see that in the context of how it's really become a key topic.

And it was I think it was because of this law enforcement actions where these large multinationals have been involved and they paid sometimes billions of American dollars in sanctions.

And during these negotiations and you see here, the table of the discussions really with authorities were largely about about how that corporation in the first instance, whether they have had already had effective compliance programme, but in the second instance, whether they are willing to change and improve.

So there are various stages and it's interesting, important to look what happens.

It's not I would not say this is in the mainstream literature that mainly looks at settlement documents.

This is based on my discussions with those that are negotiating this large group, these large settlements.

I spent time in New York, in Washington, of course, in London to try to figure out what what happens behind the scenes, really.

So largely, you see that facts are not the most important.

What happened, really, it's important, but not so much.

What's more important here in during these negotiations, if I pick up one or two key issues, is really the willingness of cooperation to improve, to change, to adhere to certain standards that especially US enforcement authorities deem to be effective or adequate in when it comes to some internal functioning of those corporations.

So often there are many kind of compromises in terms of where cooperation and enforcement authorities are going to look when investigating the alleged misconduct.

They, for example, say you don't need to look at the one hundred jurisdictions.

You can look at 10 jurisdictions, and then we will get an idea what happened.

And if you can kind of suggest how you are going to improve, this will lead to this kind of legal interpretation, this kind of sanction.

So it really does not really work as you would expect and I would expect three years ago where I would expect you do so much bribery, so many countries that sanctioned.

And that's kind of how policy documents look like.

But in reality, it is actually secondary.

What is the most important and I think is that the willingness of corporations to change and evidence of this precautionary measures and engagement as well with enforcement authorities.

So this is just a broader, broader kind of conclusion from that paper that it's freely available.

So just to conclude this part, so I kind of covered, you know, kind of peak research problem is global corporate conduct.

It's a big regulatory problem as well, especially when it comes to some challenges associated with global corporate conduct.

And I introduce some ideas around what I understand to be corporate compliance.

And I try to set the context of how corporate compliance and corporate compliance programmes have become important in changing the behaviour and some extent internal structures of global corporates.

And of course, to another discussion is what's the second stage, how the discussion about corporate compliance and follows as well in beyond beyond the US, UK and for example, what to do with small and medium sized enterprises?

I would say there that notion of compliance with the changing and end its function is a little bit different.

But here, what do we see as a conclusion here?

States are increasing, increasingly requiring businesses to undertake compliance efforts internally to prevent and detect violations of laws and regulations.

Key focus has been the effectiveness of compliance programmes.

So we see more and more pressure from the private sector to have more qualifications.

What enforcement authorities during those negotiations would understand to be the effective compliance programme to give them leniency through really what is not the key focus here is, are these underlying crimes?

So these compliance programmes, I think, are used largely as a proxy of good behaviour.

And you will trust the company that they really didn't do so at crimes when they have these good compliance programmes.

So we are kind of looking at one step after the actual crimes and we are sanctioning these reactions and willingness to change the corporate behaviour rather than that we would be really focussing on every single criminal offence that has taken place in those in these large schemes, which I think it's interesting.

It raises many questions that we might ask as researchers in our future research.

And I'm interested in your views on that.

We obviously see that who can incentivise that corporations with effective compliance programmes receive considerable leniency and might even completely avoid liability as well.

We see or it's a relatively new issue in recent years, that even if there is a violation of corporations self discloses, they showed it could have done they have done everything they could to prevent.

They going to get they will not be prosecuted at all.

It will not be even a settlement or resolution would be they would simply stop the enforcement authorities.

Another thing is and last point I would like to raise here, look at again to look at back at the Airbus case, I think it's an open largely to discussion about private sector, private self regulation, privatisation of policing tasks.

And because, for example, in the Airbus case, there are quite there quite some detail in what the corporation did in order to earn deferred prosecution agreement in the UK corporation identify a comprehensive compilation of red flag cases, for example, they presented all suspicious business partners relationship to the UK and French prosecutors.

They were not aware of these cases.

Those prosecuted.

They were perhaps aware of 10 percent, five percent,  don't quote me here, small amount of of the scheme corporation, an internal investigation.

They really show them, show them kind of a compilation of these risky relationships that prosecutors, in my, they suggested them to look further in those, if they're interested, and even Airbus to help with designing technology to assist enforcement authorities in the prioritisation and identification of relevant documents.

They hadn't got access to more than 13 million documents to prosecute.

So that involvement of the corporation in investigation is just huge and enforcement authorities perhaps would never have such a capacity to do it by themselves.

And it creates all kinds of relationships and interesting questions and angles to that.

We should ask of the relationship between large corporates.

Their compliance programmes their  certain investigative mechanisms that are part of these programmes and their collaboration, cooperation, let's say, or not with the with the enforcement authorities.

So this is the first part of the presentation in the second part, just I thought research future seminar.

So I start thinking, really, when I was preparing for a seminar about about future topics, that we as researchers but as well as academics and practitioners that we could look into together to do some collaborative research, global collaborative work.

So when I was thinking and if you can take into account that context that I have set in in the last 30 minutes or so, I thought about three kind of key areas of future research and the implications of what I have been discussing these are more, on the one hand, more pragmatic implications, less same questions that I would like to set, more systemic, to be challenging the actual system and looking at the how the system works and then some theoretical considerations, how, as academics, we could approach these problems, problems with corporate misconduct, problems with global corporate compliance as an exciting research area.

So when it comes to this and these are not you know, these are not all problems or implications there are simply just some ideas that I'm setting for further discussion.

So I think it's an example that's a pragmatic questions for both enforcement authorities, policing regimes and corporations.

We see some examples of global policing and enforcement.

You saw that the ability of us to impose the jurisdiction better widely to many foreign corporation corporations, how that extraterritorial application of law actually functions, how and to what extent is it actually effective, how U.K.

and other countries can and should actually use negotiated settlements?

Is this why it's endorsed by, for example, OECD and other important organisations?

Does that use of negotiated settlements really?

It has many advantages, but perhaps we should think as well about some challenges, especially in countries, I would say, where the rule of law can perhaps might not be the strongest.

And you are really getting a lot of trust to the prosecutors and power to them, perhaps.

So these are big questions that we could explore and with some colleagues have already explored.

We are these questions to relate to questions of private private engagement, private reporting in the money laundering.

It would be suspicious, suspicious activity reporting and to use practical use of that intelligence actually by public authorities that might feel overwhelmed by too many, too many reports that might not be necessarily absolutely useful because corporations could be risk averse.

So these are practical questions that I see in this discussion about compliance programmes and private versus public policing.

Of course, we see emergence of new laws, new [inaudiable] entities.

So there are many industry specific challenges, especially in the area of money laundering.

And you see all the emergence in the United Kingdom of these various supervisory bodies, questions of coordination, for example.

And then in the area of corporate compliance programmes.

This is Evergreen, always where we've come to some event.

There is a business that would be a policymaker that I think we need discussion about what constitutes adequate, effective compliance programmes.

Business would say there is a lot of ambiguity and that would require more clarity.

So really the question of how and to what extent the state bodies should clarify exactly the standards of effective compliance, for example, because I think there is some interesting interaction between clarity and legal certainty and ambiguity and need to have a bit of tension because I mean, like if a policymaker says exactly what it means and what it should be, they going to get exactly the bare minimum.

So it's open question.

I'm not saying to one or the other, but I simply see it as a research topic and a huge role of certification bodies and the question of whether those should play a role in determining adequate, effective compliance programme.

So I think this kind of just a highlight of some key topics that are worth and I would say every single one of them is worth looking at, even separately, and especially for those who work in this area and who want to conduct research or have already conducted research in this area.

When it comes to these
certifications, I must say we are working a lot in personals and I suggest especially so we we are having all kind of programmes where you can get certified and preventing bribery and corruption develop as a certificate in cooperation with Interpol and international property crime.

And let's address this.

A lot of going on.

We have a lot of teaching activities as well in this area.

Just to mention that it relates, I would say, to that pragmatic discussion and including certifications.

When it comes to more systemic issues, systemic questions that we would like try to have a helicopter view and try to change the world a little bit to ask this more meta questions, I would say step back and try to identify big problems that are not necessarily pragmatic.

I would ask questions about corporate liability and really the role of negotiated settlements.

I think especially if you speak and spend some time at, for example, the universities major university in New York, for example, and you speak with practitioners there.

And I conducted interviews.

I feel they understand that corporate compliance questions and these negotiations quite differently from UK lawyers, for example, that I feel are still more in that area of criminal law and very serious offences.

It should not should not be really so collaborative.

There is kind of like a defendant and there is a prosecutor and we need to be tough.

On the other hand, I feel more that US system is more used to have conducted more cases where they see it more like, yeah that corporation you have a problem we know, how are you going to change here?

Let's talk about it during these negotiations.

What are you going to do to become a better corporation?

So I see kind of like the question and a little bit of a trade off between the questions of criminalisation, really, which has its important advantages in our own society versus more what we could call a restitution change and what is the objective of that of the regime, really?

And do we want corporations to be punished?

Do we want to change?

Why are we really doing doing it?

They are as well, big questions of too big to fail.

What's the bottom line?

You see very, very bad corporations.

Still reaching settlements, still not being criminally prosecuted.

Questions of are they too big to fail when we should allow a corporation to fail?

Should we?

We have questions of this regime is largely focussed on corporations.

What about individuals?

We see in the US some policy objectives to kind of focus more on individual criminal liability.

But is this enough?

We see UK cases that where concluded there was a settlement of our prosecution agreement, individuals, individual prosecutions failed.

I think this is definitely a research topic.

And what about appropriate jurisdiction or kind of general legal landscape?

Who should be your prosecutor?

What about other jurisdictions?

In this case?

This is like Airbus where multiple, multiple enforcement authorities.

So its kind of like one systemic set of questions that we could have a look at in the future.

Questions.

Secondly, questions of effectiveness of existing systems.

What in the international landscape of global policing where the US has extraterritorial jurisdiction now UK has extraterritorial jurisdiction, France is engaging and its start mixing.

Perhaps we can ask questions about appropriate institutional design.

Do we need an international body to coordinate that?

Do we need some perhaps some tribunal or is going to be sorted informally?

These kind of questions I think are worth looking into.

And now my favourite, I think how these private systems really feed the public policing, what public bodies are really doing with information, let's say, in the context of money laundering, how and in which areas, public and private sectors are able to cooperate and coordinate their actions.

To what extent is desirable to have to to delegate, let's say, set what historically we would consider to be in the domain of criminal law prosecutors and what we are should be able to delegate to corporates, actually.

And of course, questions.

And if I go on and role, technology, ultimate position, these are big topics when it comes to these compliance programmes as the third and last kind of key topic for future research, I would be looking at whether these programmes actually to be able to change this kind of leading topic Evergreen.

And I would go to the ambiguity of law if I would be doing more legal research.

To what extent this ambiguity of law good in this area.

So window dressing with a lot of clarity versus some healthy pressure coming from that ambiguity.

So just some highlights as a part of this idea, surround the research futures and future of research in this in this area.

As the last point.

Of course, this is more for academic academics here.

I think there are a number of theoretical theoretical frameworks that we could test.

We could focus on.

That could perhaps unite academics from different disciplines, questions around public private partnership and that framework look at public private interactions in policing and during negotiations when it comes to determination of appropriate compliance, let's say, as we'll come to kind of questions of collective action, it's all very much discussed in UK policy documents, public/private collaboration.

I always want to ask because collective action, at least in economics, is associated with public good.

And I would say, can we really align private and public interest?

And to what extent perhaps if you have a collaboration between insurance sector and enforcers, it's very easy because they're really in the interest of insurance companies to, for example, to investigate and prosecute certain types of crimes.

Perhaps in other areas it's not the same.

So perhaps we could be more specific in terms of where that focus should be and what is really feasible when it comes to public and private collaborations in policing global corporate misconduct.

All other topics that I specify here, and so I leave it just to you to consider some of these, but this is from me and I'm just sitting landscape now.

I would be grateful for any discussion points or ideas and questions that you might have.

So thank you very much.

Thank you so much, Branislav, that was really very interesting, extremely relevant, and you also managed to present all these complex issues in a very simple and engaging manner.

So that was really excellent.

Of course, there are a number of complicated, you know, dimensions issues you touched upon.

I'm thinking naturally about the question of extraterritoriality and implementation.

You've discussed that.

I'm sure we're going to discuss it further during the question and answer session.

But I'm a bit puzzled myself, having worked on this question through the lens of this investment.

We have organisation like Transparency International.

We have 140 countries ratifying or having ratified the UN Convention on Corruption.

We have the STG goal number 16, if I'm not mistaken, anticorruption.

And yet at the same time, it's happening on a daily basis.

So what's the level of implementation and hypocrisy for this question?

But we may take a few seconds to go back to the idea of extraterritoriality, the concept, which is very familiar to lawyers, not necessarily very well understood because it's complicated.

But could you elaborate further on that?

And stress the main difficulty here.

Yes.

Thank you very much for for a number of points here.

And in that book, I really look at I try to construct that meaning rather than I really don't operate with the strict legal definition of extraterritoriality, because I would say most of that conduct, strictly legally speaking, would not be extraterritorial.

So I weigh a little bit from the legalistic discussion and I have been criticised for it by lawyers.

So this and this is a, well, well-known fact.

So for me, its ability to assert jurisdiction as a national agency over conduct that takes place largely outside the borders of that given country.

And there are several modalities of how you can do that.

And I haven't covered it in the presentation.

So I would just shortly highlight three types of extraterritoriality that I see in these cases and that I see has major effects in the change of our international and global regulatory regimes.

So the first one is obviously US as a leading country in terms of use of its currency, but as well in terms of use, for example, of any global business, they in these settlements, sometimes they often claim jurisdiction when, for example, the dollar as a currency in the transaction was used or these dollars were coming through correspondant accounts in the US or when the communication between people, persons were going through service or through through through a service hosted in the United States.

So this would be this discussion.

What do you want to say, territorial or extraterritorial?

Of course, you can claim there is a teritory, but it can be very tiny.

So to what extent and of course, the questions of effects of certain conduct in the territories.

So this affects doctrine.

So this is the first thing I would say lawyers in these discussions like to overstress this.

They like to say one dollar are going to come through.

As Correspondant said, you are under U.S.

jurisdiction.

I think it's the rudder.

It's it's rare to see itself standing.

There is usually more other hooks, jurisdictional hoops that they have and these are following.

Another one is interpretation of corporate control.

So question of who is your intermediary?

Who is your subsidiary?

Who acts on your behalf?

This UK Bribery Act stricter in the system, but you can say that you can be the conduct of associated person, can be someone who acts on your behalf.

You've got some money from activities of some third party of your business partner that is a better company.

You don't prevent them.

Therefore, you're under US jurisdiction for this kind of complicity charges.

So you see you're part of a joint venture.

You never wear your Japanese company, for example.

That is a big case.

And you act, you don't pay in dollars, but your business partner in at some point exits in the United States.

So you are kind of complicit and they claim jurisdiction.

Then there are all kinds of indirect effects.

Which could you could kind of subsumed under the territoriality and extraterritoriality discussion, which would be I'm a corporation in Eastern Europe, for example, perhaps directly they would not go against me.

But I have difficulties to do business with US and other European corporations because my misconduct would lead into their potential prosecution.

Thank you so much, Rosario is extremely clear and detailed at the same time, interestingly, it relates to a discussion we had last week about witnesses and human rights and how to really make sure this is information implemented.

I have more question related to the state, the role of the state, but I'd like to give the floor to our colleague.

We have a question from Olga.

If the bribery cases can be settled, it feels like it is worth it is worth the gamble on the part of the corporation because they won't necessarily be prosecuted, maybe criminal charges, charges sorry, would be a deterrent.

So, yeah, a settlement, amicable settlement of disputes and also the idea of criminal or not criminal liability.

Yeah.

So that's that huge question.

Thank you so much for for this, about what do we want to achieve achieve in that regime, how to set appropriate incentives of corporations.

So you can look at it from any perspective that there will be that evergreen discussion about carrots and sticks and how we should incentivise corporations to come and to come and self disclose their misconduct.

So I think.

I answer it in the following way, I think we have two regimes in the global landscape.

One is that and maybe I'm naive, but I think that there are there are sectors that are problematic and where we see these very big corporations or we assume they are very big corporations.

If you see these big settlements, really big settlements like Petrobras in Brazil, Airbus, and it's not like that, they went somewhere and give one bribe.

It's more like it's a 20 year conduct.

So if you go to Rolls-Royce, the settlements refers to bribes in nineteen eighty nine, for example.

So these people are not there anymore in company for decades.

So you see the change of the entire corporation.

So it's like, is it worth doing or not?

I don't think that's the question because it's just bad corporations that needs to be changed and healed and changed their internal processes.

So in this way, we see some exemplary enforcement actions to to those players that are kind of very bad or historically were bad.

Then you have a new corporations that have come through this already or certain sector that has changed significantly.

And there, you know, there is incentive of disclosing and getting leniencies.

I think they work a bit better.

And so I think criminal charges.

I don't think that a regime, corporate regime is really about so much deterrence as much as it is now about change.

So look at Canada, for example, Loveleen case in Montreal company, and the prosecutor was not willing to be so that the corporation's very bad and did want to grant VPA huge impact on national economy, potentially very strict.

I go through the criminal law pathway.

And it's a big problem because that company can get busted.

It has very serious consequences.

And you see as well alleged intervention of the prime minister and huge political political crisis at the time in Canada three years ago, two or three years ago.

So this is you will not get many cases of really.

As opposed to that kind of more friendly negotiating regime where you can be ruling the cases and, you know, so that's the question.

You see as well.

U.K.

system, you should not get DPA if you don't self disclose practically all these cases were not self disclosed.

They should have been criminally prosecuted.

But we found a ways to interpret the laws and regulations in a way the DPA can be used because otherwise it would be.

So I think that's that question.

Do we want to see corporations fail?

Are we willing to bear these costs?

And then we can use more criminal law when it comes to corporates?

Not sure.

I think corporate criminal liability, we need to use it more for bad managers, bad CEOs and put people in jail.

That's a big deterrence because you might care more about how we do business if you can go to jail for many years.

That's interesting, really.

Branislav.

And probably a never ending debate in the field, really, because this idea of targeting people criminally, you know, the CEO, for instance, or targeting the asset of a company, the money.

Right.

Because the CEO they are in place for a short period of time and they are part of a chain of command as well.

I mean, are not the only people responsible, but fascinating debates related directly to a number of our discussion during these recent futures webinar thank you so much.

We have a question from JAmes, a small query: you mentioned certification and mentioned some of the programmes of the ICJS your centre.

Do you see certification as being primarily at individual level, such as those with within licencing law local government certification, contributing to greater powers for Conseil, et cetera, or at the organisational level, the old investor people, Athena Swan, et cetera, which can be a mechanism for soft law, social compliance.

Thank you for this note.

It's really useful, I think about it in both ways.

So it's interesting to think about it really, because you have certifications at the individual level.

As you mentioned, you know, government clerks, for example, or basically employees of a bank that can get certified to show that they are well trained and they are able to do either they are aware or they're even able to do the job compliance work effectively.

So it's one type of certification.

I think that's would be what would we mean here?

And of course, then you have this more kind of all kind of either international standards organisations where you can get certified for IOS Corporation and other mechanisms that can be mechanism for soft lawsocial compliance.

And I think that would be a great area of research.

And to look at these mechanisms that soft law, social compliance mechanism outside that case study that I have presented here, because it's a bigger, bigger phenomenon.

And I think that in this economic crime area, we are missing a lot on on this type of research.

We don't have that the research on soft law social compliance and that agenda that I've presented here.

So much, Again, fascinating, Branislav, because it calls again, you know, one more time for very interdisciplinary research is so complicated.

You have legal aspects as well.

And something we've not had to discuss is what we generally call responsible finance or responsible investment.

That's also a very interesting way to approach the question.

What do you think?

I think I have a number of questions here.

Responsible finance.

You know, I'm thinking a lot about, you know, because I feel optimistic about corporate compliance and something goes beyond the law, beyond regulations to ethics and all kinds of other socially responsible behaviour, which you think is really a difference here between corporate social responsibility, irresponsible finance as a concept or any practical practice of global corporate as compared to the internal compliance systems that are discussed in the context of business ethics literature as well.

My idea was that, that compliance really comes with the states coming in and tell you some extent how to do business, which is not normal in law in the last 100 years.

It's new stuff.

I would say historically it was more it should be left to corporations, how they do their business and if it's really bad, they're going to impose some regulation that are going to punish you.

We see that effect.

We have some contract law, corporate governance arrangements, still different if corporate social responsibility, where I see it's more like a reputational issue.

State is helping by soft law arrangements to kind of create some payoffs, some moral situations, acknowledgement of you being a corporation.

But you don't have to do that.

What do you think?

No, no.

I agree with, you know, the thing which comes to my mind and that would be fantastic to organise a dedicated webinar on that is a sort of post-colonial lens, really, because when you said that for long, until really very recently, 20 years corporation were liable punish responsible internally, but not externally to some extent.

So it was a sort of licence given to these sometimes state related corporation to act the way they wanted.

And if it were on behalf of the state, you know, in Africa, in Latin America and Asia, where a number of countries were colonised by the same state for years.

So that's when it's proven.

We've seen corporate behaviours in Africa, outrageous things happening.

So also very interesting lens.

Yeah.

And interesting is here.

Let's say the big discussion around this topic started in 1998 with the emergence of these international conventions that trying to limit this conduct, but at the same time, the response to to these activities of businesses in third countries is subject to criticism in terms of neo colonial neo colonialism and neo-moral imperialism, where the question is how and to what extent should you impose Western legal standards to countries of public officials that are bribed when we look at this case study.

So there's a big discussion because you have two two sides.

There are corporations bribing somewhere and that somewhere is often developing country.

And the question is how and to what extent this, the solution is based on similar principles, has the problem.

Indeed, indeed, and I have in mind a number of foreign investment cases related to corporation, really, but I'm conscious of time.

So we have to bring all this to a close.

But that was fantastic.

Thank you so much, Branislav.

Fantastic webinar really very interesting and we have a lot of food for thought for additional meetings and research together.

I'd like to thank the team for their support, in particular to today Barnaby Olga, as well as Claudia and Gloria.

And I'd like to thank the audience for being such a great and interesting audience.

So thank you so much again, Branaislav.

Thank you so much for inviting me.

I really appreciate it.

Thank you.

All right, everyone, have a great afternoon, evening, night.

Bye bye.