Regulatory Compliance & Legal Frameworks Flashcards

Under the Foreign Corrupt Practices Act (FCPA), which category of payments is explicitly exempted from the anti-bribery provisions?

Answer: Facilitating payments to expedite routine non-discretionary government actions

The FCPA contains a narrow exemption for 'facilitating payments' made to expedite or secure the performance of routine, non-discretionary government actions such as processing permits or providing utilities.

A company discovers that its subsidiary in another country has been making undocumented cash payments to local officials. Under the FCPA's books-and-records provision, what is the primary obligation?

Answer: Ensure the payments are accurately recorded in the company's books and records

The FCPA's accounting provisions require issuers to maintain books and records that accurately and fairly reflect all transactions, including improper payments by subsidiaries.

Which regulatory body has primary enforcement authority over the books-and-records provisions of the FCPA?

Answer: Securities and Exchange Commission (SEC)

The SEC enforces the FCPA's accounting provisions against issuers (public companies), while the DOJ enforces the anti-bribery provisions against both issuers and domestic concerns.

Under the Dodd-Frank Act's whistleblower program, what is the eligible award range for a whistleblower whose original information leads to an SEC enforcement action exceeding $1 million in sanctions?

Answer: 10% to 30% of sanctions collected

Dodd-Frank's whistleblower program awards eligible individuals 10% to 30% of monetary sanctions exceeding $1 million collected by the SEC based on their original information.

A compliance officer discovers that the company's AML program has a significant gap in its customer due diligence procedures. Under FinCEN's CDD Rule, which customer type requires the highest level of beneficial ownership verification?

Answer: Legal entity customers such as corporations and LLCs

FinCEN's CDD Rule requires financial institutions to identify and verify the beneficial owners of legal entity customers (those owning 25% or more and one individual with significant control).

The EU General Data Protection Regulation (GDPR) applies to a US-based company that has no physical presence in Europe. Under what circumstance would the GDPR still apply to this company?

Answer: If the company processes personal data of EU residents in connection with offering goods or services to them

GDPR's extraterritorial scope (Article 3) applies when a non-EU company offers goods or services to, or monitors the behavior of, individuals in the EU, regardless of physical presence.

Under the Sarbanes-Oxley Act Section 301, audit committees of public companies must establish procedures for which of the following?

Answer: Receiving and handling complaints regarding accounting and internal controls

SOX Section 301 requires audit committees to establish confidential, anonymous procedures for employees to submit concerns about questionable accounting or auditing matters.