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This Week in Compliance: Denmark placed in non-compliance by Council of Europe’s anti-corruption group

By GAN Integrity

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


  • United Technologies settles FCPA offenses in China and Azerbaijan for USD 13.9 million: Multinational engineering firm United Technologies agreed to pay the SEC USD 13.9 million on Wednesday to resolve charges pertaining to violations of the FCPA related to making illicit payments to officials in Azerbaijan and China. Otis Elevator Co, a subsidiary of United Technologies, bribes officials in Azerbaijan to win contracts for public housing elevators in the capital city of Baku. In addition, United Technologies and a joint venture partners paid a Chinese sales agent to attempt to obtain confidential information for a Chinese official in an effort to sell aircraft engines to state-owned Air China. The SEC also noted that United Technologies had improperly provided trips and gifts to officials in half a dozen more countries in Asia and the Middle East. The case was settled by the SEC without going to court. The payment consists of disgorgement plus interest of a little below USD 10 million and a penalty of USD 4 million.
  • ING CFO Timmermans stepping down following USD 900 million fine: Following the announcement of a USD 900 million fine levied by Dutch prosecutors over the bank’s failure to prevent money laundering for years, ING Groep announced this week that its CFO Koos Timmermans is stepping down. Timmermans was appointed CFO in 2017 and will remain in his current position until a replacement is found. The move comes as a surprise since ING said last week that it had already implemented systems to better vet transactions and that no individual was responsible. The bank had previously taken disciplinary measures against ten employees. During the period that the violations occurred, between 2010 and 2016, Timmermans held key positions in the group’s Dutch banking operations.
  • Plea deal in PetroEcuador bribery case: A fourth defendant has pleaded guilty in the bribery case involving Ecuador’s state energy company. Jose Larrea, a U.S. citizen based in Miami pleaded guilty to conspiracy to commit money laundering.Larrea indicated that he wired over USD 1 million from his personal U.S. account to several other U.S. based accounts. These wire transfers then served as a way to conceal a bribery scheme involving an oil services contractor who paid bribes to PetroEcuador officials in an attempt to retain existing contracts and win additional contracts with the company. Larrea admitted that he conspired with a number of other defendants to conceal the proceeds of the unlawful scheme.
  • Former broker with real estate agency Colliers jailed for six months over FCPA offenses: Joo Hyun Bahn was sentenced to six months of imprisonment by a federal court in Manhattan late last week for trying to bribe a Middle Eastern official in an attempt to obtain financing for the sale of high-rise building complex in Vietnam.Bahn agreed to disgorge USD 225,000 to the SEC to settle civil FCPA charges. The attempted bribes were intended to help Bahn broker a deal between a South Korean construction company and Qatar’s sovereign wealth fund; the bribes were supposed to amount to USD 2.5 million as Bahn was due to receive USD 5 million for brokering the deal. Judge Ramos said he believed Bahn deserved a lenient sentence since he acted, in part, to try and help his father overcome financial difficulties.


  • Denmark placed in non-compliance by Council of Europe’s anti-corruption group: GRECO, the Council of Europe’s group of anti-corruption experts, decided to place Denmark in non-compliance this week because of the lack of action taken to prevent corruption among members of parliament and in the judiciary. Since GRECO’s last report, which was published over four years ago, only one out of a total of six recommendations was implemented satisfactorily. GRECO has recommended that Denmark establishes a code of conduct, which needs to be effectively enforced, for its members of parliament. Moreover, there are no requirements for parliamentarians to report conflicts of interest when they arise on an ad-hoc basis. Placing Denmark in non-compliance according to article 32 means that, as a first step, the frequency of the reports will increase.
  • Prosecutors in Ukraine granted access to anti-corruption reporter’s phone records:A court in Kyiv ruled that authorities should be granted access to the phone records of a reporter working on anti-graft stories. The records concern 17 months worth of data of phone calls to-and-from reporter Natalya Sedletska. Sledletska hosts an anti-corruption TV show called “Schemes” in Ukraine, which has reported on several investigations involving a number of senior Ukrainian officials, including Prosecutor-General Yuriy Lutsenko. The move has received strong criticism from the Committee to Protect Journalists which called the action “an affront to the principle of press freedom that the Ukrainian government purports to uphold”.


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