A report says she is. And that London and Virgin Islands firms didn’t do enough to stop her

Gulnara Karimova has already achieved a measure of fame – or notoriety. She is the daughter of Islam Karimov, who was president of Uzbekistan from 1989 until 2016, when he died. There was a period when it was thought that she would succeed him. She also appeared in pop videos under the stage name, “Googoosha,” she ran a jewellery company and she served as ambassador to Spain.

And now, an NGO, Freedom For Eurasia, released a report detailing how Karimova built a £200m empire on properties from London to Hong Kong with funds obtained through bribery and corruption.

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The new offences of failure to prevent fraud are likely to shake up corporate compliance for all UK business. How will they work in practice?

The UK government have announced they are pushing ahead with a game-changing new regulation to expand the ‘failure to prevent’ family of offences to failure to prevent fraud. 

Proposed amendments could even see corporate officers jailed if they take a decision, or fail to take a decision, that could lead to economic crime such as fraud, false accounting or money laundering being committed.

Failure to prevent encompasses a wide array of compliance failures, from not having the right policies in place, to a lack of procedures to even training courses that aren’t effective in delivering the right information to employees. 

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Download our detailed guide: “Failure to Prevent: A Guide to Compliance” and find out more about the family of failure to prevent offences, including the new failure to prevent fraud offence currently going through the UK parliament.

Failure to prevent fraud will apply to all businesses, and require them to have certain procedures in place, or face criminal liability.

This free guide includes:

  • What is failure to prevent?
  • What’s new in failure to prevent?
  • Why is failure to prevent fraud being considered and who will it cover?
  • Failure to prevent fraud in detail
  • Failure to prevent tax evasion
  • Failure to prevent bribery
  • The future of failure to prevent

Download your guide to failure to prevent now and stay on top of this game-changing new regulation that’s set to shake up corporate compliance.

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The ‘failure to prevent’ concept is being expanded to fraud, false accounting and money laundering

The UK government have announced they are pushing ahead with a game-changing new regulation to expand the ‘failure to prevent’ family of offences to failure to prevent fraud. 

The announcement came during Parliamentary debate over the Economic Crime and Corporate Transparency Bill which aims for a wide-reaching attempt to tackle all aspects of economic crime, along with reform of Companies House.

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Understanding pandemic-related challenges for bribery compliance

Hybrid working is here to stay. In between Covid-19 waves and rushes to and from the office, even as people return and restrictions are lifted, hybrid working is likely to be with us going forward. This has caused significant challenges for compliance, but businesses have adapted with online solutions. From due diligence checks to virtual happy hours, much of the in-person activity which takes place in an office has been replicated online.

But compliance challenges remain, particularly in the realm of bribery compliance, and gifts and hospitality. It was one of the first things to take a hit in the pandemic. If no one can go out, then there’s no risk in a supplier-paid meal infringing on bribery rules. With foreign travel more difficult and subject to greater restrictions, it is harder to bribe someone with an all expenses paid trip abroad.

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Bribery can have serious legal and reputational consequences for your organisation and, in some countries, organisations can even be prosecuted for failing to prevent employees from committing offences. But demonstrating that there were adequate procedures in place to prevent bribery could be crucial to a defence in ‘failure to prevent’ proceedings. A gift and hospitality (G&H) register is one such procedure. A comprehensive gifts and hospitality register can also help organisations keep their accounting records up to date.

To help your organisation get up to speed, VinciWorks has created a guide on best practice guidance for gift and hospitality registers. The guide features an introduction to gift and hospitality registers, which answers questions such as what they are and who needs them, and offers six tips for implementing a G&H register.

Click here for a free download of the guide.

Navigating international laws and regulations around bribery can be very complex. Cultural customs can sometimes amount to bribery. What may be regarded as perfectly ‘normal’ and acceptable practice in a country can still be considered a bribe, even when a reward or ‘tip’ is expected, and even if everyone does it.

Global guide to anti-bribery laws

To help in the quest for compliance, VinciWorks has created a country guide to bribery. The guide includes guidance for over 70 countries. For each country, there is a summary of key bribery offences, who it covers, if businesses are required to have procedures in place, hospitality rules, facilitation payments and legal penalties.

We recommend using this guide in risk assessments and country-specific policy development. Risk assessment forms a key part of any anti-bribery and corruption programme and once risks are identified, such as business operations in high-risk jurisdictions, additional measures can be implemented which may, in some jurisdictions, form the basis for a legal defence if any employees or agents engage in bribery.

Download the guide

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A big pile of gifts

Does your organisation have an up-to-date gifts and corporate hospitality policy in place? Are you able to easily register any gifts you receive or give? Having an up-to-date gifts and corporate hospitality policy in place will help you comply with your responsibilities under the Bribery Act and other anti-corruption legislation.

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What is a corporate gifts and hospitality policy?

A corporate gifts and hospitality policy sets out an organisation’s policy with regard to when and whether employees are allowed to accept gifts both within and outside of the work premises. In the case of a gift that an employee is allowed to receive, the policy sets parameters for the acceptable value and type of gift that is permissible to receive. The policy also defines under what circumstances an employee may receive a gift. 

What should be included in a gifts and corporate hospitality policy?

The purpose of such a policy is to ensure that your organisation and its employees comply with the anti-bribery and corruption policy, bribery laws and best practice in combating corruption in all of the countries and business areas in which you operate. The policy should complement your organisation’s bribery and corruption policy. Here is some guidance on what the policy should include.

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Man in handcuffs holding money

In 2020, Airbus paid a record £3bn in fines for ‘endemic’ corruption. This settlement surpassed the previous UK record for a corporate fine for bribery, which was the £671m paid by Rolls-Royce, Britain’s luxury car manufacturer, in 2017. 

Despite the UK Bribery Act having come into force in 2010, bribery is still a hugely problematic issue in corporate life. Billions of pounds of fines are levied every year and frequent reports hit the headlines of investigations and prosecutions from the US Department of Justice and UK Serious Fraud Office.

Companies should have strict policies in place to ensure all employees understand the steps they need to take to ensure their company cannot be found liable of bribery or corruption. The policy should apply strictly to all employees, partners, agents, consultants, contractors and any other people or bodies associated with the organisation. VinciWorks has therefore created an anti-bribery and corruption policy that can easily be edited to suite your organisation’s staff and industry.
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