The international business environment is being buffeted by shifts in trade relations, technology and rising populism.Vincent Cohenis a partner withDechert LLPand a former federal prosecutor who specializes in complex civil and criminal litigation. He offered some thoughts on how corporations should frame their global strategies.
Hear more from Cohen at the 2018 Bloomberg Law Leadership Forum on May 23 in New York, where corporate counsel from Fortune 500 businesses and leaders from top law firms will gather to discuss trends in trade, regulation, and technology.
What is the impact of the U.S.’s evolving position in the ongoing NAFTA negotiations and how would you advise clients who are planning for their foreign operations?
With the recent headlines of a trade dispute between the U.S. and China, as well as divergent opinions between the NAFTA parties on critical issues, there are a lot of uncertainties in the market about the future of NAFTA negotiations. Despite the Trump administration’s overtures, a new deal has proven elusive. With the elections ahead in November in the U.S. and in Mexico in July, many observers do not believe the parties will be able to strike a new deal in 2018.
Clients trying to factor the outcome of NAFTA negotiations into their planning should make sure they account for a diverse set of outcomes and are prepared to be opportunistic if and when a new deal is announced, regardless of what that new deal is. In this, as in most situations, companies need not go it alone. Counsel adept at navigating trade issues and familiar with multiple industries will be a tremendous asset in the years ahead.
What are the most salient features of AI and predictive analytics on companies’ FCPA due diligence and compliance issues?
The U.S. government requires companies to conduct appropriate risk-based due diligence to ensure their business partners behave in a manner that complies with applicable anti-corruption laws. On the one hand, as a result of AI and other emerging technologies, there is more information available today than ever before to assist companies with conducting risk assessments and doing due diligence. On the other hand, regulators expect companies to avail themselves of this information, which is often not standard, consistent, or easily mapped.
Data management therefore poses tremendous challenges and requires companies to make sure that they stay abreast not only of developments in AI and emerging technologies, but also of corresponding shifts in the government’s expectations. Companies must be proactive about training personnel, as needed to understand and use AI and emerging technologies, and must have well-designed and ever more sophisticated compliance programs in place that are capable of, for instance, monitoring risk at intervals more frequent than the traditional norm.
Ultimately, the goal of due diligence and compliance remains the same: to alert a company to red flags emerging from a number of sources so the company can take appropriate steps to investigate and remediate such red flags.
In light of growing global trends of populism and authoritarianism, how would you advise corporate clients about the relative attractiveness of major geographic areas or primary countries for expanding or pulling back on operations?
In our experience, considerations regarding expanding or pulling back on operations are complex and require analysis of a variety of factors. There is no one-size-fits-all approach. Instead, companies must carefully examine not only the current context, but also historical trends. Populism and authoritarianism are not new phenomena, although they may recently be of greater relevance in regions of the world such as in the U.K., where the implementation and ramifications of Brexit are unfolding.
The key is to respond without being reactive. Companies that pay attention only to current developments may overcorrect by, for instance, pulling back too quickly. Companies that fail to properly account for trends may miss crucial opportunities to mitigate exposure and minimize losses. Thus, companies must attempt to gauge not only the present situation, but also the direction in which things are going. Achieving this delicate balance is difficult and requires the guidance of counsel experienced at navigating complex global challenges.
For the 4th year, theBloomberg Law Leadership Forumis the premier event for legal industry leaders to gain insights and discuss how global economic and regulatory changes impact their business.
The 2018 Forum features an update on current regulatory priorities, a look at where corporate risk is rising, and an exploration of the technology and management tools legal counsel need to respond effectively.
Click here to request an invitation to the 2018 Bloomberg Law Leadership Forum.
Leadership Forum Speakers Include:
- Chairman Jay Clayton , U.S. Securities and Exchange Commission
- Deputy Attorney General Rod Rosenstein , U.S. Department of Justice
- Marcy Cohen , Managing Director and Chief Legal Officer, ING Americas
- Noah Perlman , Global Head of Financial Crimes, Morgan Stanley
- Katherine Choo , Chief Investigative & Anti-Corruption Counsel, GE