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DOJ Releases New Compliance Guidelines

By GAN Integrity (Updated )

Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week we cover the DOJ's new compliance guidelines on assessing the effectiveness of your compliance program and more. Read the full story and more news below:

Top Story

DOJ Releases New Compliance Guidelines:

The U.S. Department of Justice (DOJ) updated its guidance for the assessment of the effectiveness of a compliance program. Among other things, the new guidance denotes information on best practices on data access for compliance officers, recommendations for the frequency with which firms should update their compliance program according to internal learnings, and guidance on post-M&A compliance adjustments. On the M&A front, compliance analysts argue that the DOJ will want to see evidence of the integration of new firms into the acquiring entity's compliance program. In terms of updating your program, the new guidelines state that a firm should be able to update their program based on 'lessons learned' from either their past misconduct or from other firms facing similar risks. Finally, in terms of data management, the document questions whether the compliance officer has enough access to data to inquire about potential misconduct. 


Former University of Miami Professor Admits to Money Laundering:

Bruce Bagley, a former professor at the University of Miami and expert on crime in Latin America, pledged guilty to laundering USD 3 million on behalf of Colombian businessman Alex Saab in relation to public works in Venezuela. He revealed that he received two money transfers from Saab coming from off-shore bank accounts in Switzerland and the UAE through a Florida-based account by a firm owned by Mr. Bagley. The funds were reportedly later transferred to an intermediary operating on behalf of Saab. The former professor is now facing 20 years in prison and has agreed to pay a USD 232,000 fine for asset forfeiture. 

BNP Paribas Chinese Unit Fined for Anti-Money Laundering Violations:

BNP Paribas SA's Chinese unit was fined USD 378,200 (2.7 million RMB) by China's central bank (People's Bank of China - PBOC) for failing to implement appropriate KYC checks on its clients and for allowing a large suspicious transaction to go unreported. Three of the Chinese subsidiary's top executives including its CEO were also given fines ranging from 6,000 USD to 8,000 USD for anti-money laundering (AML) violations. The penalties are part of the PBCO's increased enforcement efforts to curb money laundering in China. During the same period in 2020, the PBOC has imposed four times as many fines compared to the previous year. 

Former HR Manager in Hyflux Subsidiary Charged with Corruption:

Singaporean authorities charged water treatment firm Hyflux subsidiary's former human resource manager with corruption. Khoo Chen Ee was charged for receiving USD 7,000 in rewards in 2018 from the director of a recruitment services firm. Subsequently, Singaporean authorities launched an investigation into the company to investigate potential false statements and accounting standards violations. The investigation comes after a year-long review process where authorities reviewed Hyflux's publicly available information and determined the need to obtain more information to substantiate their suspicions. Singapore's Securities Investors Association (Sias) is now calling on the directors of the company to step down. 

Ericsson Begins Monitorship Under U.S. Deferred Prosecution Agreement:

Swedish telecommunications company Ericsson has begun a three-year monitoring period following last year's USD 1 billion Deferred Prosecution Agreement with the US SEC and DOJ. As a part of the deferred prosecution agreement (DPA), U.S. authorities required Ericsson to establish an independent compliance monitor for three years who would be in charge of reviewing their compliance with the terms of the settlement and of giving recommendations for compliance enhancements. The monitor was appointed by Pohlmann & Company - Compliance and Governance Advisory LL. 


Vatican Introduces New Tenders Law to Curb Corruption:

The Vatican introduced a new law aimed at curbing corruption in public procurement. The new law, which was pushed by Pope Francis, has been described as a deterrent to the Vatican's longstanding practice of cronyism and nepotism in awarding external contracts. The new law centralizes expenditures and sets standards on the competition procedures of public contracts, transparency, and control. 

Brazil Prosecutor’s Office Finds Millions in Transfers to Environment Minister’s Accounts:

After having opened a corruption probe into Bolsonaro recently, Brazilian authorities have disclosed that they found several suspicious transactions in the bank account of Brazil's Minister of Environment. The findings reveal that Ricardo Salles transferred more than USD 515,000 from his law firm's account to his personal account from 2014 to 2017 when he also served as São Paulo's Environment Secretary. The probe was opened in 2019 after he accumulated USD 1.45 million over five years after quitting private legal practice to serve public office, which raised suspicions among authorities. The São Paulo Prosecutor’s Office is now seeking to investigate potential fraud and money laundering. 

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