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 TechnipFMC FCPA charges. Read the full story and more news below:
TechnipFMC settles FCPA charges for USD 296 million:
TechnipFMC, an oil and gas services company, settled FCPA charges this week with the U.S. Department of Justice in relation to payments made in Brazil and Iraq. Of the USD 296 million payment, USD 214 million will be paid directly to Brazilian authorities, meaning that the DOJ will receive USD 81.9 million. Zwi Skornicki, a former consultant to TechnipFMC, also plead guilty on Tuesday in connection to the enforcement action. The company will receive a three-year deferred prosecution agreement. Technip will not be required to appoint an independent compliance monitor. In a statement released on Tuesday, the company disclosed that it “has reached an agreement in principle with the SEC Staff subject to final SEC approval”. TechnipFMC is still subject to an investigation by France’s Parquet National Financier related to “historical projects in Equatorial Guinea and Ghana”. READ MORE
Walmart settled FCPA charges following nearly decade-long inquiry:
Walmart Inc. has agreed to pay the DOJ and SEC a combined USD 282 million to settle allegations that it violated the FCPA by paying an intermediary in Brazil to aid with obtaining construction payments, as well as having weak internal controls in Brazil, China, India, and Mexico. The settlement consists of USD 138 million in criminal penalties, and Walmart’s Brazilian subsidiary agreed to plead guilty to violating the FCPA’s internal controls provisions. The SEC’s civil action results in USD 144.7 million in disgorgement and prejudgment interest. Walmart has entered into a three-year non-prosecution agreement with the DOJ and will retain an independent corporate compliance monitor for two years. The SEC said that Walmart’s subsidiaries in the affected countries “operated without a system of sufficient anti-corruption related internal accounting controls.” The investigation was first disclosed in December 2011.
CFTC awards whistleblower USD 2.5 million award:
It was announced this week that the Commodity Futures Trading Commission (CFTC) gave a 2.5 million USD award to a whistleblower for reporting violations to the CFTC’s financial regulations. The CFTC, which regulates the US derivatives market, said that the award had been reduced because the whistleblower had reportedly delayed submitting information about the wrongdoing. Since the launch of the whistleblowing reward initiative in 2014, the CFTC has awarded over 90 USD millions to whistleblowers.
Airbus shutting down subsidiary involved in bribery investigation:
Airbus is shutting down GPT Special Project Management, a UK-based subsidiary that has been under investigation for seven years revolving around allegations that the company paid multi million GBP bribes to secure a military contract with Saudi Arabia’s government. GPT has been under investigation by the U.K’s Serious Fraud Office (SFO) since 2012 over allegations that GPT had used illicit payments and gifts worth at least GBP 14 million in a bid to win a GBP 2 billion contract to sell equipment to the Saudi National Guard. Anti-corruption campaigners said that the planned closure would prevent the SFO from bringing a prosecution against GPT, as it is not possible to prosecute a firm that has gone out of business. Individuals may still be prosecuted.
Corporations in Canada dodged up to USD 8.53 billion in 2014 taxes:
The latest audit of the Canadian Revenue Agency (CRA) revealed that Canadian companies had avoided paying up to 8.34 billion USD in taxes in 2014. The agency analyzed information from the country’s corporate tax gap, and concluded that 24 to 29 percent of all corporate income taxes was not paid by companies in 2014. The report attributed most of the losses to bigger corporations and to both intentional and unintentional tax avoidance and evasion. The CRA outlined under-reporting income, over-claiming reductions, and failure of filing payment obligations as the most common malpractices leading to tax avoidance.
France’s Sarkozy loses big to avoid corruption trial:
Former French President Nicolas Sarkozy lost his last opportunity to avoid facing a trial charging him for corruption and influence peddling. Sarkozy allegedly offered to promote a judge in Monaco in exchange for leaked information on developments of a parallel investigation into him taking illicit payments from L’Oreal heiress Liliane Bettencourt. The latest ruling stating that the trial should proceed, came a month after France’s Constitutional Council cleared allegations of Sarkozy to receive illegal financing for his 2012 election campaign.
Billionaire Czech prime minister’s business ties fuel corruption scandal:
Czech Prime Minister Andrej Babis, who is also the second richest citizen of the country, is facing heat for a corruption scandal related to the misuse of European Union subsidies. Before Babis came into office, he was the head of the Czech food and chemical conglomerate, Agrofert. The scandal, which dates back to his time heading the conglomerate, refers to an occasion in which an Agrofert subsidiary bought a run-down farm near Prague and converted it into a recreation and conference center in 2006. The purchase was reportedly committed using EU subsidy money that was originally intended to support SMEs in the country. While the Czech police remains to investigate the case, he, in turn, has called the probe ‘politically motivated’ and all accusations against him “lies.”