- Thailand’s Prime Minister Charged with Corruption. Thailand’s prime minister, Yingluck Shinawatra, was charged by Thai authorities for irregularities in the government’s rice buying scheme, under which the government was paying prices 50% higher than world prices. Following the high profile investigation, China canceled a deal to buy 1.2 million tons of rice in early February.
- Double Declination for Baxter. Pharmaceutical company Baxter International announced that both the DOJ and SEC have completed their investigations and will not take further action. Following a whistleblower complaint, the company investigated allegations and found improper expense payments by a Chinese joint venture in August 2013.
- Alstom Faces UK Bribery Charges After 5-year Probe. Alstom, the French maker of trains and power equipment, will be charged in the U.K. over bribery allegations after a five-year investigation. The U.K. is the latest country to charge Alstom following fines in France, Switzerland, Brazil and the U.S.
- Congress to Investigate Navy Bribery Scandal. The House Oversight and Government Reform Committee opened an investigation into the unfolding Navy sex-and-bribery scandal following Rep. Darrell Issa’s concerns that the Navy’s investigations and reviews “will not go far enough.” In return for paid travel and prostitutes, a naval commander allegedly sent classified information to a government contractor.
- Siemens Executives Ordered to Pay Largest Penalties Ever Levied Against Individuals. Two former Siemens executives were ordered to pay a combined $1.46 million for their roles in the Argentine government bribery scheme, the largest FCPA penalties ever levied against individuals. U.S. District Judge Shira Scheindlin entered a default judgment, ordering each to pay a $524,000 civil penalty, and one to pay disgorgement of $413,957.
We’re back! After a short hiatus in December, the monthly TRACE poll is back. And so far 2014 has started out with a bang. Vote for which story you think deserves the top spot:
- Brazil’s New Anti-Bribery Law Comes into Effect. The law, passed last August, establishes direct civil liability for companies for the bribery of both domestic and foreign public officials.
- Alcoa settles Bahraini Bribe Scheme for $384 Million. Alcoa’s subsidiaries allegedly used a London-based consultant, with connections to Bahrain’s royal family, as an intermediary to funnel illicit payments to Bahraini officials and their beneficiaries in order to retain Alcoa’s position as a supplier to a government-operated aluminum plant in Bahrain.
- Charles Duross Leaves US DOJ, Replaced by Patrick Stokes. During his tenure as head of the Department of Justice’s FCPA Unit, the DOJ resolved more than 40 corporate bribery cases, which resulted in approximately $1.9 billion in monetary penalties and the conviction of more than two dozen business executives and money launderers.
- Turkish graft probe intensifies. Several prominent businessmen close to the government and the sons of three ex-ministers have already been detained as part of the inquiry, and the government has purged scores of government employees within the Police Department and the judiciary. Still, the inquiry has been marred by political infighting, and two prosecutors originally in charge of the investigation have already been removed from the case.
- Judge approves Weatherford Company’s $252 million FCPA settlement. – The Swiss-based oil services company allegedly falsified its books and records to conceal illicit payments, including exorbitant trips for government officials and their family members. Weatherford’s Middle East subsidiary also allegedly made more than $1.4 million in improper payments to obtain contracts in the Iraqi Oil-for-Food program in 2002.
- New report highlights offshore tax havens of Chinese elite. A report by a team of media outlets led by the International Consortium of Investigative Journalists (ICIJ), revealed this month more than 37,000 tax haven clients from Greater China, including close relatives of some of China’s top Communist Party members. While offshore accounts are not illegal per se, the report shows how far China’s anti-graft campaign has yet to go in curbing government corruption.
In honor of National Human Trafficking Awareness Day, January 11, TRACE wants to make you aware of the dangers of using trafficked labor in business.
Labor trafficking—the forced or coerced labor of vulnerable persons—can enter the supply chain through recruiters that provide workers for low-level facilities or labor. As some companies have had to learn the hard way, the risks of labor trafficking increase exponentially as a company’s operations become more decentralized. U.S.-based shipbuilder Signal International is currently standing trial in eighty-four individual cases alleging labor trafficking. According to the complaints, the guest workers hired by Signal were charged “recruitment fees” of up to $20,000 in exchange for assistance in applying for and obtaining permanent residence in the U.S., but once the workers were in the U.S., agents threatened them with financial ruin and adverse immigration action if they attempted to leave.
While Signal is an egregious example, it is hardly the only company that has faced serious consequences from lack of oversight in labor recruitment. The risks of using trafficked labor are widespread. Labor trafficking is a risk pervasive to all industries that use low-skilled laborers in their supply chains. According to the Office of the High Commissioner for Human Rights, the sectors most at risk for trafficked labor include agriculture, construction, textiles, hospitality, and transportation.
There are two forms that trafficked labor generally takes—forced labor and debt bonded labor. While forced labor, in which victims are forced to work against their will, is the common perception of trafficked labor, debt bonded labor is in fact the most widely used method used in labor trafficking. Victims become bonded laborers when their labor is demanded as a means of repayment for a loan or service, for which the terms and conditions have not been defined or in which the reasonable value of the victims’ services is not applied toward the liquidation of the debt. Because debt bonded laborers are not physically coerced into labor, they are more difficult to identify and prevent. Therefore, it is imperative that companies invest in adequate channel management.
Because regular training of staff is so important to make employees aware of the issues and to identify potential weak points for trafficked labor within channels, TRACE is launching a new online training module, free for TRACE member companies, that introduces employees to the risks of human trafficking. The TRACE Avoiding Trafficked Labor training module aims to help reduce trafficked labor in global supply chains as the first-ever training designed for the business community.
“Apart from its obvious horrors for its victims, human trafficking poses a real and serious threat to international business and the ethical and transparent practices that lead to a prosperous and healthy society. TRACE can help reduce trafficked labor in global supply chains with this first-ever online training course designed for the business community; this practical training will help elevate awareness of the issue and will help employees identify the red flags associated with this hidden risk,” said TRACE President Alexandra Wrage.
Offer: $500 Credit for Any TRACE Due Diligence Service
This offer is limited to the first 10 respondents.
TRACE offers both members and non-members a variety of customizable risk-based due diligence services. For the final day of our 10 Days of Giving, TRACE would like to offer a $500 discount on ANY TRACE due diligence service to the first 10 respondents. Assess third party risk using our TRACEsort tool or take advantage of our TRACEcertification portable due diligence reports, which contain a wealth of anti-bribery compliance information establishing that an intermediary has been thoroughly vetted, trained and certified by TRACE.
About TRACE Due Diligence Services
TRACE’s due diligence services are managed by skilled multilingual due diligence analysts, under the supervision of FCPA lawyers, and range from an initial compliance screen to an intensive, on-site review of third party intermediaries and business partners. Many TRACE services offer ongoing monitoring of third party relationships. TRACE has performed over 300,000 due diligence reviews in almost every country, and unlike most vendors, never outsources due diligence work to independent contractors. Leveraging more than a decade of anti-bribery expertise, in-house research capabilities in twenty languages and a network of TRACE Partner Law Firms around the globe, TRACE offers competitive pricing and superior quality.
Learn more about the services TRACE offers and download our Due Diligence Brochure at http://traceinternational.org/Diligence/due-diligence-services.html.
This offer is non-transferable, restricted to companies only and may not be redeemed by law firms or vendors.