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 Transparency International’s latest report on the enforcement of foreign bribery provisions in global business transactions. Read the full story and more news below:
TI Reports Drop in Foreign Bribery Law Enforcement:
In its latest report, ‘Exporting Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention’, which analyzes the world’s leading 47 exporting nations, Transparency International (TI) revealed that the enforcement of foreign bribery provisions has significantly dropped since 2018. The report assesses the effectiveness of the OECD’s Anti-Bribery Convention, which requires countries to establish measures for criminalizing the bribery of foreign public officials in international business transactions. While TI pointed out that four countries, the U.S., the U.K., Israel, and Switzerland, are enforcing foreign bribery actively, accounting for 16.5% of global exports, this number included seven countries and 27% of global exports in their 2018 report. The report also reveals that 34 out of the 47 assessed countries conducted practically no enforcement of their foreign bribery laws.
Brazil Meat Giant JBS’s Owner Settles Corruption Charges:
Brazil’s J&F Investimentos, the parent company of JBS SA, one of the world’s largest meat manufacturers, settled FCPA charges with a federal court in New York for USD 120M. The investment company pleaded guilty to having paid USD 150M in bribes to public officials to secure government funding for the company using the U.S. financial system. As a part of J&F’s plea deal with U.S. authorities, the company agreed to enhance its compliance program and to cooperate with U.S. regulators in future investigations.
Deutsche Bank Fined USD 16M in Danske Case:
German prosecutors fined Germany’s biggest bank Deutsche Bank USD 16M (EUR 13.5M) for failing to report that its Estonian branch had processed a part of Danske Bank’s suspicious transactions on time. Like several other European banks, Deutsche faces accusations of acting as an intermediary for the processing of four-fifths of Danske Bank’s suspicious transactions in Estonia. The lender became implicated in Danske Bank’s money laundering scandal after a whistleblower exposed criminal concerns in 2018, triggering two internal probes into the issue. At the same time, German prosecutors acquitted Deutsche of money laundering allegations concluding they had insufficient evidence to bring charges. Deutsche Bank’s public spokesperson stated that the bank had fully cooperated with public prosecutors.
Swiss Prosecutors Investigate Banque Cramer over Brazil ‘Car Wash’ Probe:
As part of a large-scale investigation targeting entities associated with Brazil’s state-owned oil company Petrobras, and construction conglomerate Odebrecht, Swiss federal prosecutors announced a new probe into Geneva-based Banque Cramer & Cie. Federal prosecutors stated that they suspect the bank failed to prevent money laundering due to a lack of internal controls in the organization. The bank declined to comment. Authorities also said that they are running around 40 criminal proceedings related to the Odebrecht-Petrobras case, at least three of them against financial institutions.
Policy & Guidance Updates
WEF’s New Voluntary ESG Metrics Now Include Corruption:
The World Economic Forum (WEF) recently released a report on ”Stakeholder Capitalism Metrics” which elaborated on an earlier version of draft ESG (environmental, social, and governance) principles made in collaboration with the Big Four accounting firms, EY, Deloitte, PwC, and KPMG. The new voluntary metrics, which were drafted in collaboration with 120 of the world’s largest companies, include anti-corruption metrics and disclosures and define common ESG measures to track sustainable value creation in companies. Under the principle of ”Governance”, companies that decide to comply with the standards would have to report on numerical data such as total incidents of corruption and percentages of key groups trained in anti-corruption policies by region. The metrics also include qualitative data laying out companies’ internal and external channels dedicated to reporting misconduct.
SFO Director Calls for Changes in U.K. Anti-Corruption Laws:
After the U.K. Serious Fraud Office (SFO) dropped a nine-year corruption investigation into Barclays’, SFO Director Lisa Osofsky called for legal reforms in the U.K.’s anti-corruption laws. In her latest speech, Osofsky stated that the current legal framework, in which companies have to be proven to have ‘a directing mind’ for breaking the law to secure a conviction, makes it difficult to hold companies with complex corporate governance structures accountable for fraud. The Director also stated that new rules on when the SFO can open a new investigation into fraud would ‘solve problems the intelligence division repeatedly faces.’ She also encouraged authorities to penalize witnesses that leak confidential information about inquiries that might not have gone public otherwise.