Western Union 2014 Annual Report Download - page 173

2014 FORM 10-K
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Risks Related to Our Regulatory and Litigation Environment
As described under Part I, Item 1, Business, our business is subject to a wide range of laws and regulations enacted by the
United States federal government, each of the states (including licensing requirements), many localities and many other countries
and jurisdictions. Laws and regulations to which we are subject include those related to: financial services, consumer disclosure
and consumer protection, currency controls, money transfer and payment instrument licensing, payment services, credit and
debit cards, electronic payments, foreign exchange hedging services and the sale of spot, forward and option currency contracts,
unclaimed property, the regulation of competition, consumer privacy, data protection and information security. The failure by
us, our agents or their subagents to comply with any such laws or regulations could have an adverse effect on our business,
financial condition and results of operations and could seriously damage our reputation and brands, and result in diminished
revenue and profit and increased operating costs.
Our business is subject to a wide range and increasing number of laws and regulations. Liabilities or loss of business resulting
from a failure by us, our agents or their subagents to comply with laws and regulations and regulatory or judicial
interpretations thereof, including laws and regulations designed to detect and prevent money laundering, terrorist financing,
fraud and other illicit activity, and increased costs or loss of business associated with compliance with those laws and
regulations has had and we expect will continue to have an adverse effect on our business, financial condition and results
of operations.
Our services are subject to increasingly strict legal and regulatory requirements, including those intended to help detect and
prevent money laundering, terrorist financing, fraud, and other illicit activity. The interpretation of those requirements by judges,
regulatory bodies and enforcement agencies is changing, often quickly and with little notice. Economic and trade sanctions
programs that are administered by the United States Treasury Department's Office of Foreign Assets Control prohibit or restrict
transactions to or from or dealings with specified countries, their governments, and in certain circumstances, their nationals,
and with individuals and entities that are specially-designated nationals of those countries, narcotics traffickers, and terrorists
or terrorist organizations. As United States federal and state as well as foreign legislative and regulatory scrutiny and enforcement
action in these areas increase, we expect that our costs of complying with these requirements will continue to increase, perhaps
substantially, or our compliance will make it more difficult or less desirable for consumers and others to use our services or for
us to contract with certain intermediaries, either of which would have an adverse effect on our revenue and operating profit. For
example, we made significant additional investments in 2014 in our compliance programs based on the rapidly evolving
environment and our internal reviews of the increasingly complex and demanding global regulatory requirements, and we expect
additional compliance program costs in 2015 and beyond as well as potential negative business impacts from new compliance
procedures. These additional investments relate to enhancing our compliance capabilities, including our consumer protection
efforts. Further, failure by Western Union, our agents, or their subagents (agents and subagents are third parties, over whom
Western Union has limited legal and practical control) to comply with any of these requirements or their interpretation could
result in the suspension or revocation of a license or registration required to provide money transfer, payment or foreign exchange
services, the limitation, suspension or termination of services, loss of consumer confidence, the seizure of our assets, and/or the
imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services.
We are subject to regulations imposed by the Foreign Corrupt Practices Act (the "FCPA") in the United States and similar
laws in other countries, such as the Bribery Act in the United Kingdom, which generally prohibit companies and those acting
on their behalf from making improper payments to foreign government officials for the purpose of obtaining or retaining business.
Some of these laws, such as the Bribery Act, also prohibit improper payments between commercial enterprises. Because our
services are offered in virtually every country of the world, we face significant risks associated with our obligations under the
FCPA, the Bribery Act, and other national anti-corruption laws. Any determination that we have violated these laws could have
an adverse effect on our business, financial condition and results of operations.