Welcome to Episode 10 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. In this episode, we will focus on the impact of new technologies and artificial intelligence on Compliance profession. We will explore this matter in a plain language so to say and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.
For those of our listeners who are not aware about our format, in each podcast, we take two typical concepts or more accurately misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince the audience that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.
Tom: OK, Tim, let’s get started.
Myth #1 There is no need for Compliance Officer to learn about new technologies as blockchain or artificial intelligence for instance. Tim, would you agree with this statement?
I disagree with this statement. I believe Compliance practitioners should pay attention to new technologies. Let me give you one example. A new bribing scheme might take place by utilizing, for instance, Initial Coin Offerings (ICO) model. This could be done in a simple manner. One is requested to “invest” money to a specified ICO project. One has to pay in hardly trackable cryptocurrency in exchange of tokens. The thing is that ICO (contrary to IPO) is not regulated in the majority of jurisdictions. Thus, there are no mandatory audit or legal requirements, which are able to validate if the project is sound from financial prospective. Consequently, there is no guarantee or obligation that one can expect the return of his money after investing in something, which technically is not illegal. Imagine that a PEP is an ultimate owner of this ICO project. He could get all financial proceeds from “investments” in cryptocurrency, which in certain jurisdiction even is not subject to declaration. While in the US this mechanism will not work due to so-called “Howey test” in other jurisdictions ICO could be used as an innovative bribing scheme.
What are your views, Tom?
To read the full story please visit FCPA Compliance Report’s website at: http://fcpacompliancereport.com/2018/02/compliance-man-goes-global-episode-10-all-new/