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A Framework for Cross-Jurisdictional Compliance

ISO 37001 specifies requirements and provides guidance for establishing, implementing, maintaining, reviewing and improving an anti-bribery management system. There is, of course, good cause for businesses in India to adopt the new standard, but it’s likely that there will be some staunch opposition to the change.

with co-author Ankit Salot

India was ranked 40th in the latest Corruptions Perceptions Index report by Transparency International. It appears that the recent reforms and regulatory actions did not have an impact on the perceptions influencing India’s CPI rankings. With Indian corporations looking to acquire a larger share of global markets, establishing global transparency and governance has become imperative. Indian firms are being recognised for transparency by organisations like Transparency International, indicating that they are moving in that direction. With this context, this article examines the possible pros and cons for Indian businesses to consider the recent management systems by the International Organisation for Standardisation (ISO) on anti-bribery and compliance management for compliance.

ISO 37001 on anti-bribery and compliance management aims at providing a broader guidance for businesses to establish, implement, maintain and improve compliance programs. The standard also provides guidance for extending such programs to third parties and business partners in addition to employees across locations.

Operations across geographies and emerging compliance challenges result in businesses having an increasing need to manage anti-bribery compliance across jurisdictions. With variations in the treatment of facilitation payments, extortions and political funding/donations and cultural implications associated with gifting/entertainment, it becomes necessary to consider a global framework to structure compliance and manage it across jurisdictions. ISO 37001 provides a structured framework which can be adopted across geographies/jurisdictions and has the flexibility to be scaled for small businesses and large corporations.

Besides being a tool to structure a compliance framework, ISO 37001 can help provide transparency for businesses through the certification mechanism. Quite recently, certification mechanisms for anti-corruption were offered by specific private nonprofit bodies (like ETHIC Intelligence). With ISO 37001, guidance toward anti-bribery compliance management certifications will also evolve to support corporations across geographies.

Despite many positives, the ISO 37001 may face challenges in acceptance or adoption in the Indian business environment due to the following factors:

  1. The long-standing corruption prevalent in the Indian business environment
  2. Weak enforcement of the existing anti-corruption regulations
  3. Lack of clarity on whether the international regulators will provide credit for compliance with standard regulations on ongoing investigations
  4. Voluntary standards

Furthermore, businesses implementing ISO 37001 should be aware of and prepared for addressing challenges such as:

  1. Structuring global reporting requirements for incidents of possible violation
  2. Providing adequately structured and acceptable limits/approaches for cultural practices in their respective geographies
  3. Extended documentation and monitoring mechanisms across geographies and units for continuous compliance

Despite its immense global compliance benefit, ISO 37001 will face challenges in acceptance amongst corporations in India. The adoption of procurement guidelines necessitating anti-corruption ISO certification as a prerequisite for participating in tenders may go a long way in increasing adoption of the ISO and demonstrating the nation’s vision toward anti-corruption.

 

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Sundar Narayanan

Sundar NarayananSundar Narayanan is a fraud examiner by qualification and profession. He currently leads the Forensic Services division in SKP Group in India. He has extensive experience in employee fraud, senior management fraud and anti-corruption compliance reviews. Sundar has made several presentations and conducted training for clients on fraud investigation and anti-corruption compliance, including presenting two papers at the Wharton School on anti-corruption.  He frequently writes on anti-bribery and corruption and investigation techniques.

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