TRACE Poll: April’s Biggest Compliance Story Reply

Vote for what you think was this month’s top compliance story.

  1. Anti-corruption reporting becomes more transparent in Europe. The European Parliament adopted the long-awaited directive on the disclosure of non-financial and diversity information, which requires large public-interest entities with more than 500 employees to disclose anti-corruption and bribery matters, among other things, in their management reports.

  2. U.S.-based information technology company settles FCPA charges. Hewlett-Packard Company agreed to pay a $108 million settlement with the DOJ and SEC due to allegations that its subsidiaries paid bribes in Russia, Poland, and Mexico.

  3. Dodd-Frank’s Conflict Minerals rules are put to the test. A U.S. court of Appeals held that parts of Dodd-Frank’s Conflict Minerals rules violate the First Amendment. Meanwhile, the first reported filing under the conflict minerals rule was made on Thursday April 24 by Taiwan-based Siliconware Precision Industries Co., Ltd.

  4. DOJ investigates yet another company for FCPA violations in China. Qualcomm Inc, the world’s biggest mobile chipmaker, announced in an SEC filing this month that it was under investigation by the DOJ for potential violations of the FCPA because of instances in which special hiring consideration, gifts or other benefits were provided to Chinese state-owned companies or agencies.

  5. Guinean government shakes up the mining industry. A Guinean government committee has recommended that BSG Resources Ltd., the mining arm of Israeli tycoon Beny Steinmetz, be stripped of its rights to the Simandou iron-ore project, after finding that the company had obtained the rights to Simandou through corruption.


Disclosure Requirement of Conflict Mineral Rule Held Unconstitutional: Applicability, Due Diligence, and Reporting Requirements Remain Intact Reply

2519766036_9e37579642_oOn April 14, 2014, the U.S. Court of Appeals for the D.C. Circuit held that the disclosure requirement for conflict minerals in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) was unconstitutional.  In National Association of Manufacturers v. Securities and Exchange Commission, the court found that requiring companies to declare whether their products are “DRC conflict free” forced commercial speech in violation of the First Amendment.  However, the other conflict mineral requirements in the Act regarding applicability, due diligence, and reporting remain intact.[1] More…

Reflections on TRACE’s Global Enforcement Report 2013: The Butterfly Effect 1

TRACE GER 2013 ScrnshtWhile the U.S. remains the leader in formal foreign bribery actions, defined as cross-border enforcement actions by government agencies that have resulted in formal charges or official declinations, other countries are certainly taking steps to close that gap.  The number of formal foreign bribery actions by countries other than the US increased by 71% in 2013 as compared to 2012, according to TRACE’s Global Enforcement Report (GER) 2013.  The GER 2013 provides an updated summary of international anti-bribery enforcement trends based on the cases and investigations tracked in the TRACE Compendium, TRACE’s online database of transnational corruption cases.  Enforcement actions are included only if the alleged bribe has a cross-border component and involves an allegation of a bribe made to a government official or to an employee of a state-owned entity.  The GER 2013 offers both graphic and textual analyses of all known enforcement actions—including investigations, prosecutions, settlements and cases settled with no finding of bribery—since the enactment of the FCPA in 1977 through 2013.

One trend contributing to the increase in non-U.S. enforcement is the proliferation of parallel prosecutions.  A company can no longer expect settlements with the SEC and DOJ to end its liability for violations.  GlaxoSmithKline, which has been subject to ongoing 2010 bribery investigations by the DOJ and SEC, unexpectedly found itself facing bribery charges and employee detentions by China’s Ministry of Public Security.  The high-profile Chinese probe of GlaxoSmithKline then triggered a preliminary review by the U.K.’s Serious Fraud Office. More…

TRACE Poll: March’s Biggest Compliance Story Reply

Vote for what you think is this month’s top compliance story.

U.S. government freezes stolen assets of former Nigerian dictator Sani Abacha- A civil forfeiture complaint was unsealed this month indicating that the U.S. Department of Justice (“DOJ”) is seeking recovery of more than USD$550 million in connection with the largest kleptocracy forfeiture action brought in the Department’s history.  This is not the first time that the DOJ has gone after a former kleptocrat, however; in 2011, the government brought an action against the assets of President Teodoro Nguema Obiang Mbasogo of Equatorial Guinea.  The son of Equatorial Guinea’s president has also been put under formal investigation recently in France for money laundering.

Japanese Corporation pleads guilty to FCPA charges- Japanese trading company Marubeni agreed to pay a USD$88 million fine to the DOJ regarding charges that it worked in concert with a Connecticut company, among others, to bribe high-ranking Indonesian officials in the state-owned electric company, Perusahaan Listrik Negara.  It is the company’s second foreign-bribery payout in two years.

US and EU implement economic sanctions related to events in Ukraine and Russia- As part of a broader economic sanctions policy against Russia, the US and EU have added a growing list of individuals to their denied parties watchlists over the past few weeks.  The lists include Gennady Nikolayevich Timchenko, who was until recently co-owner of the Gunvor Group, one of the largest international energy traders.

FCA fines Besso Limited for anti-bribery systems failings- The UK’s Financial Conduct Authority (FCA) fined Besso Limited £315,000 (~$520,000) for a failure to take reasonable care to establish and maintain effective systems and controls for countering the risks of bribery and corruption.  Besso is a FCA-regulated insurance broking firm wholly owned by Besso Insurance Group Limited.

China’s anti-bribery campaign aims high- Several news reports have hinted that Zhou Yongkang, a retired member of China’s Politburo Standing Committee, may be under investigation for bribery.  If true, Zhou would be the highest ranked person in the communist party to be targeted by President Xi Jinping’s recent campaign against corruption.

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