This Week in Compliance

This Week in Compliance: Two Chevron employees arrested amid corruption probe

Here’s what’s been going on in the compliance world this week:

Business

  • Two Chevron employees arrested amid corruption probe: Two Venezuela-based employees working for the US oil company Chevron were arrested by local authorities in connection with a corruption investigation. According to Chevron, the company had contacted authorities to understand the reasons behind the detention, but these were still unclear. The arrests are part of an anti-corruption drive spearheaded by Venezuela’s President Nicolas Maduro, but are the first involving a private company. In January, prosecutors had the general manager and another top manager at Petropiar SA – a PDVSA-Chevron joint venture – arrested and charged with embezzlement and conspiracy to illegally manipulate production figures.
  • Florida-based telecom chief sentenced for FCPA violations: Lawrence W. Parker Jr., who owned or controlled five Florida-based telecommunications companies, was sentenced to more than three years’ jail term for conspiring to violate the FCPA. Parker pleaded guilty to bribing Egbert Yvan Ferdinand Koolman, an Aruban official and product manager of the government-owned Servicio di Telecommunicacion di Aruba NV (Setar), in return for telecommunication contracts. Following Parker’s admission to paying more than USD 700,000 to a foreign official, Koolman revealed that he took USD 1.3 million in bribes in exchange for awarding contracts. Parker’s companies won almost USD 24 million in mobile-phone orders from Setar. Reportedly, Parker paid the bribes by wire transfers from U.S.-based banks to Koolman and his ex-wife.

Government

  • South African authorities seize assets at the Gupta family residence: Law enforcement officials raided the Johannesburg residence of the Guptas family – also close allies of former President Jacob Zuma – and seized assets totalling USD 21 million as part of an investigation into corruption allegations involving a government dairy farm project managed by a longtime business associate of the Guptas.  Approximately USD 21 million of public funds were allocated to the dairy farm project to help struggling black farmers in Vrede. The farmers ended up receiving nothing, while the funds for the project were funneled into the bank accounts of politically connected individuals and companies, including one of the Guptas brothers. Assets including aircraft and bank accounts have been frozen pending trial. The case is the first to lead to arrests and charges after the end of Zuma’s presidency and is perceived as a test of his successor’s ability to crack down on government corruption.
  • Convicted former South Korean President gives up appeal: South Korea’s former President Park Geun-hye submitted a document to court disclosing her intention to give up filing an appeal against the 24 years’ prison sentence she was handed down earlier this month. Nonetheless, Park’s case will still be processed by an appeals court as the prosecution had filed one already on the grounds that Park had unfairly avoided certain charges. The former president denies wrongdoing.
  • Brazil’s Supreme Court charges Senator with corruption: Senator Aecio Neves – one-time presidential candidate and former centrist party leader – was ordered by Brazil’s Supreme Court to stand trial on corruption and obstruction of justice charges. Prosecutors accused Neves of accepting a bribe totaling USD 587,000 from the former chairman and chief executive of JBS SA, Joesley Batista, also jailed on corruption charges. Neves also faces eight other separate corruption investigations. Reportedly, Batista had secretly taped Neves asking for a bribe, a conversation Batista later turned into prosecutors as part of a plea bargain deal. A director at a holding company owned by the Batista family was later caught on videotape handing cash to a cousin of Neves. Neves claims that he was set up, while his lawyer says that the evidence used against his client was illegal.

Noteworthy

  • New regulation compelling non-listed Spanish companies to disclose beneficial owners: Spanish non-listed companies must now disclose and update information on beneficial owners (UBO) to the company registry as imposed by the new UBO reporting measure. UBO is defined as anyone who directly or indirectly owns or controls more than 25% of the share capital of the company or of the voting rights, or exercises control over the management of the company. The measure is motivated by the Fourth Directive of the European Parliament and the Council on the prevention of money laundering or terrorist financing. All non-listed companies will need to file their annual accounts as well as a declaration form of beneficial ownership of the company.
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