Page 1 | Proprietary and Copyrighted Information Part C Jim Gaa, Chair Part C Task Force IESBA Meeting January 13, 2015 London
Page 2 | Proprietary and Copyrighted Information Part C Phase 1 - Exposure Draft –Issued in November 2014 –Extended Comment Period – April 15, 2015 Phase 2 – Section 350, Inducements
Page 3 | Proprietary and Copyrighted Information February TF: Phase 2 March CAG April Board Phase 2 April 15 Comment Period Phase 1 Deadline MayTF: Phase 1 Consider comments on ED June/July Board: Phase 1 Full Review 2015 Timetable
Page 4 | Proprietary and Copyrighted Information August TF: Phase 1 Prepare First Read Post-ED Phase 2 If time is available September CAG: Phase 1 and Phase 2 October Board: Phase 1 First Read Post-ED November?TF:Phase 1 Prepare Second Read Phase 2 if time is available 2015 Timetable, cont.
Page 5 | Proprietary and Copyrighted Information JanuaryBoard: Phase 1 Second Read Post-ED Phase 2 Issues Post-JanTF: Phase 1 Prepare Final version Phase 2 Prepare First Read April Board: Phase 1 Final Approval Phase 2: First Read 2016 Timetable
Page 6 | Proprietary and Copyrighted Information Post-AprilTF:Phase 2 Prepare ED July Board: Phase 2 Approve ED 2016 Timetable, cont.
Page 7 | Proprietary and Copyrighted Information Part C – Phase 2 – The Public Interest Over $1 trillion in bribes are paid to public officials and organizations each year at a cost of over $2 trillion (UN) –Much of this involves developing economies, which are least able to bear the costs –Much bribery originates in developed economies –Problem not confined to public sector: Bribes are made within the private sector too
Page 8 | Proprietary and Copyrighted Information Social norms and laws are in flux –Facilitation payments are regarded as bribes –Extra-territorial laws are becoming common –Laws focusing on specific industries Revision of section 350 is critically important Part C – Phase 2 – The Public Interest
Page 9 | Proprietary and Copyrighted Information At an early stage – discussion only –Discussion only at this stage, no decisions have been made Review of existing literature Presentation by Transparency International (UK) Phase 2 – Task Force Discussions
Page 10 | Proprietary and Copyrighted Information How to distinguish advantages that do and do not threaten compliance with fundamental principles? Conflicts between interests of employing organization and public interest –Code distinguishes legitimate and illegitimate interests of employing organization How to address facilitation payments in jurisdictions where they are common & laws against them are not enforced? Phase 2: Issues Relating to Gifts and Bribes
Page 11 | Proprietary and Copyrighted Information Incomplete description of inducements Focus on accepting inducements Lack of guidance and safeguards No consideration of cross-jurisdictional issues, including extra-territorial laws –Social norms and laws are rapidly changing Phase 2: Issues Relating to Current 350
Page 12 | Proprietary and Copyrighted Information Offering and accepting advantages –Some are illegal –Some are legal, but may create threats to compliance with fundamental principles –Some are legal, and do not create threats to compliance with fundamental principles Phase 2: Issues Relating to Current 350
Page 13 | Proprietary and Copyrighted Information Definitions –Inducement/advantage –Gifts vs. bribes Types of offers of advantages Inducements/Advantages – NOCLAR –Connect to Section 360, advantages given or accepted for which there is evidence that they have occurred or may be about to occur Structure of 350 – Under Consideration
Page 14 | Proprietary and Copyrighted Information Identification and evaluation of threats –Gifts vs. bribes Safeguards Guidance on offering and accepting advantages –Individual PAIBs, colleagues, and groups may be involved Structure of 350 – Under Consideration
The Ethics Board