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.

Didn’t see a story that you think should have been added?  Email us at info@TRACEinternational.com to let us know!

October Poll – What was this month’s most important anti-bribery development? Reply

Time for another TRACE Blog poll to find out what was this month’s biggest story.  Cast your vote below:

  1. FCPA Settlements Continue – This month, Diebold Incorporated agreed to pay more than $48 million to settle SEC and DOJ allegations that Diebold bribed foreign government officials in China, Indonesia and Russia.  Stryker Corporation agreed to pay over $13.2 million to settle SEC charges that Stryker’s subsidiaries allegedly made illicit payments to doctors and government employees in Argentina, Greece, Mexico, Poland and Romania.
  2. Court Finds Dodd-Frank Protections Do Not Protect Whistleblowers Outside US – In the case Liu v. Siemens AG, a U.S. District Court ruled that the anti-retaliation provision of the 2010 Dodd-Frank financial reform law, which shields whistleblowers from discipline for reporting alleged violations by their employers, did not apply to conduct outside the United States.  The plaintiffs had claimed that they were fired after disclosing that Siemens AG, a German company, was funneling kickbacks to Chinese and North Korean hospital officials.
  3. OECD criticizes Russia’s implementation of Anti-Bribery Convention – Despite certain progress, the OECD remains concerned with Russia’s compliance with key provisions of the OECD Anti-Bribery Convention, the organization announced this month.  Having just completed a second report on Russia’s implementation of the convention, the OECD’s Working Group on Bribery concluded, among other things, that Russian law enforcement and related agencies needed to implement a more proactive approach to detecting, investigating and prosecuting foreign bribery offenses.
  4. UK launches new National Crime Agency – The United Kingdom announced a new crime-fighting agency, the National Crime Agency (NCA), with “national and international reach and the mandate and powers to work in partnership with other law enforcement organizations.”  The NCA will work in coordination with the Serious Fraud Office and other national agencies to combat and prosecute bribery and corruption.
  5. U.S. Congressman Sentenced to 3 Years For Extortion – Former Congressman Rick Renzi (R.-AZ) was sentenced to 36 months in prison for convictions on public corruption, money laundering and other charges.  Among other allegations, Renzi was accused of committing extortion while trying to swap U.S. government land for a farm that belonged to a business partner who owed him money.

Corporate Compliance Programs Now Required in Russia Under Recent Changes to Anti-Bribery Law Reply

Russian President Vladimir Putin

Russian President Vladimir Putin

A newly published legal alert sent to us from our partner firm Baker & McKenzie in Moscow explores recent amendments to Russia’s anti-corruption law – Federal Law No. 273 “On Combating Corruption.”  Article 13.3 of the law, which went into effect on January 1, 2013, imposes an affirmative duty on companies to develop compliance programs aimed at curbing corruption.   More…

Top 12 of 2012: A look back at the biggest anti-bribery stories from last year 1

Guest blogger Severin Wirz, an attorney specializing in compliance with the Foreign Corrupt Practices Act, reflects back on the most noteworthy anti-bribery developments of 2012.

By Severin Wirz

Snowflake 2013With 2012 behind us, it seems a perfect opportunity to pause and reflect back on the anti-bribery developments of the last twelve months.  So here are TRACE’s “Top 12 of 2012” – all the biggest trends, breakthroughs and scandals of 2012, composed neatly in list form:

12.   Whistleblowers favored – The US government showed just how serious it is about encouraging whistleblowing when the IRS agreed to pay jailed banker Bradley Birkenfeld $104 million in September for information he provided against his former employer UBS.  The payout followed on the heels of the DOJ’s announcement in early August of the creation of an Office of Inspector General Whistleblower Ombudsperson and the SEC’s first whistleblower payout later that month.

11.   Barclays’ woes worsen – It’s been a difficult year for international banking giant Barclays plc.  Four months after settling a $160 million fine over interest rate manipulation, Barclays announced that it was also being investigated by both British and US authorities for potential acts of bribery in Qatar.

10.   UK adopts deferred prosecution agreements -  In October, Britain’s Ministry of Justice declared that it would begin using deferred prosecution agreements (DPAs).  Widely used in the United States, DPAs are expected to encourage more self-reporting and greater certainty for corporations in negotiating settlements with the UK Serious Fraud Office.

9.      Ongoing FCPA sweep of the medical industry – The SEC and DOJ brought no less than 10 separate FCPA-related actions in 2012 against companies in the healthcare sector, including suits against Pfizer, Wyeth, Biomet, Smith & Nephew and Orthofix.  Read more about these cases in the TRACE Compendium.

8.      Twilight of the facilitation payment exception –  Only 6 OECD countries continue to uphold the facilitation payments exception.  Among those is Australia, which this year proposed getting rid of the defense altogether.  TRACE’s 2012 Anti-Bribery Benchmarking Survey indicates that even when legal, companies are increasingly choosing to prohibit employees from making so-called “grease” payments abroad.

7.      Wal-Mart bribery scandal in Mexico – Reminding us of the power of journalism as an anti-corruption tool, the New York Times published a investigative exposé in April revealing that Wal-Mart sought to cover-up millions of dollars in bribes to agents and government officials in Mexico.  The article has since led to a growing probe of Wal-Mart’s activities in other countries as well as a formal investigation by Congress.

6.      DOJ’s FCPA unit suffers trial losses– Prosecutors at the DOJ suffered several surprising FCPA losses this year, including defendant John O’Shea’s acquittal in January, the dismissal of all charges against the African sting defendants in March and the end of the DOJ’s appeal in the Lindsay Manufacturing case in May.  And while the stinging setbacks won’t stop future FCPA prosecutions, it may well embolden more pushback from defense lawyers who now perceive cracks in the DOJ’s enforcement facade.

5.      SEC implements widening net of Dodd-Frank rules – The SEC issued several new rules this past year mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, including disclosure requirements concerning the use of conflict minerals as well as payments made in the extractives industry to foreign governments.  Along with new federal regulations against human trafficking, companies are becoming ever more vigilant against compliance problems that may arise during the course of overseas dealings.

4.      New collective action tools alleviate costs of anti-bribery compliance –Speaking of compliance, for many the two biggest buzzwords of 2012 were “collective action.”  Online platforms such as TRACE’s TRAC tool now allow companies to conduct broader baseline due diligence at a lower cost.  It should come as little surprise, then, that the Basel Institute on Governance launched the International Center for Collective Action (ICCA) in October to serve as a resource hub for companies looking to improve their anti-corruption programs.

3.      Anti-Corruption efforts rev-up in “BRIC” countries – There’s been an undeniable increase in the attention paid to anti-bribery concerns within BRIC countries (Brazil, Russia, India and China) recently.  Over the past year, Brazil’s former presidential chief-of-staff was sentenced to over 10 years in prison in a vote-buying scandal there, Russia entered into the OECD anti-bribery convention, the grassroots anti-bribery movement in India continued to pick up steam, and China’s new leader Xi Jinping voiced renewed resolve to launch an offensive against corruption in his country as well.

2.      Morgan Stanley’s Declination– The DOJ and SEC declined to initiate an enforcement action against Morgan Stanley for violations committed by a “rogue employee.” Not only is the value of a robust compliance program and frequent training confirmed, a true breakthrough in the history of the FCPA, the seldom accepted “rogue employee” defense prevails.

1.      DOJ and SEC publish long-awaited FCPA Guidelines – The hype surrounding the much-anticipated FCPA Guidelines finally proved real when, in mid-November, the DOJ and SEC released their 120-page compilation of information about the FCPA.  And while the Guidelines are by no means game-changing, they have been roundly applauded for providing needed insight into such lingering questions as the definition of a foreign official, what makes for a good compliance program, and what constitutes a facilitation payment.