Several developments from the past year will embed in 2022, increasing the challenges faced by companies in managing misconduct risks that could impact their reputation or lead to investigations by external agencies. Over the next month, this blog series will examine the key factors driving this complex investigations and enforcement landscape and provide some practical guidance on how to mitigate these risks.
What to expect from enforcement agencies in 2022
US agencies in the second half of 2021 made several pronouncements indicating their intention to pursue, with vigor, the investigation and enforcement of the full spectrum of corporate wrongdoing. Such intentions are backed by greater resources within the US Department of Justice, and a ramping up of activity is expected this year.
In Europe, the French and German legislatures are expected to look again at their corporate crime laws, some long-considered reforms to corporate criminal liability are still under review in the UK (although the timing remains unclear), and the EU and UK are considering how criminal law and other penalties can be used to drive human rights compliance (in the case of the EU) and the green agenda (in the case of both the EU and UK) - all of which may increase the powers of or tools available to individual agencies.
Companies should expect all kinds of drivers for enforcement to remain relevant - ranging from traditional areas of focus such as bribery, money-laundering, fraud, bid rigging and tax evasion to other kinds of corporate misconduct like breaches of environmental rules, data misuse and sanctions and trade violations (including trade laws relating to human rights).
In particular, the tackling of illicit money flows, ESG concerns, and corporate culture continue to rise up the political agenda and are likely to be a focus for regulators and prosecutors this year.
A renewed push for cross-border cooperation
The US has made clear that it will be looking to supercharge enforcement through greater domestic intelligence sharing and international cooperation, including via the G7’s Financial Action Task Force. We can expect a focus on countries that fall under the DOJ’s Kleptocracy Asset Recovery Initiative, including China, Russia, and Venezuela. Given the US DOJ’s strong links with agencies across the world, the trend of multi-agency investigations and enforcement is set to continue and grow.
Other factors driving complexity
The diverging approaches and procedural rules in different jurisdictions and the impact of geopolitics will also add layers of complexity for global companies this year.
The escalating US-China trade war will continue to heighten regulatory and enforcement risk for global companies operating in China. The countermeasures imposed by China in 2021, including an anti-foreign sanctions law and a new data security law, create particular risk. The data law, for example, will make the investigation of China-based conduct a challenge, just at a time when anti-bribery and other enforcement agencies have wrong-doing relating to China in their cross-hairs.
The continued uncertainty and further expected financial disruption arising from the Pandemic, alongside pressures on global supply chains, will put pressure on people at all levels of global organizations, which could lead to poor decision-making and unethical conduct—making the battle for the hearts and minds of employees and agents to ensure they comply with company policy and call out wrongdoing all the more pressing.
Looking at these issues in more detail
Over the next month, our experts across the globe will examine how these and other trends will impact corporate enforcement risk, the conduct of investigations, and risk mitigation efforts in 2022, alongside some practical guidance on how to face these challenges.
As new posts in the Global Enforcement Outlook series are published, we will update this post with the links, drawing together the trends and issues to consider in response in one place.
1. What to expect from US enforcement agencies in 2022
2. Europe's evolving corporate criminal liability laws
3. China’s new data transfer laws add complexity to China-related investigations
4. Critical data management issues in investigations
5. US-China tensions - what to expect in the year ahead
6. Regional Development Banks Come of Age as Global Enforcers
7. Anti-money laundering trends to watch
8. Conduct risk and corporate culture in and beyond the pandemic
9. How the ESG agenda will shape enforcement risk & response
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