Give me some numbers!
A major European telecommunications provider was fined a record-breaking USD 965 million to settle FCPA violations and a large manufacturer of aircraft engines agreed with the UK, the United States and Brazil to pay USD 809 million for a global resolution to settle bribery allegations. While no numbers have been reached yet, some big names have come under Department of Justice (DOJ) scrutiny this year for potential FCPA violations including Uber.
What about Europe?
European law enforcement is also recording wins this year; the Serious Fraud Office is investigating British American Tobacco for alleged bribery and corruption. Airbus is another big one on the list of both UK and French prosecutors. A record-setting fine of USD 2.4 billion was imposed on Google by the European Commission’s competition enforcement agency for anti-competitive practices. While no other than Italy’s prosecutors issued a request to indict Shell and four of its former executives for bribing officials in Nigeria to win work on a lucrative oil block, OPL 245.
Anything more interesting?
France enforced the Sapin II law in June, imposing on companies the establishment of a solid compliance program, but also opening the opportunity to reach out of court settlement of corruption charges through France’s interpretation of the American deferred prosecution agreements (DPA). The first French DPA was entered into this November by HSBC and the French National Financial Prosecutor, thus recording the first Sapin II win.
One more time, did he really win?
Almost a year into office, the Trump administration recorded two losses in the fight against corruption. One was by repealing disclosure requirements on oil and gas and mining companies operating abroad relieving them from disclosing payments to foreign governments. The other, by withdrawing the US government’s support for Extractive Industries Transparency Initiative (EITI).
Any good news?
A win for companies includes the DOJ’s publication earlier in the year, Evaluation of Corporate Compliance programs’, covering 11 sections against which companies can benchmark their compliance program. Another such guidance document, the ISO 37001, was published by the International Organization for Standardization in 2016 and encouraged companies to seek certification in 2017, including Altsom, Wall-Mart, Microsoft, Robert Bosch Middle East, and even the governments of Singapore and Peru.
Give me more good news!
In effect, solid compliance programs and cooperation has earned several companies declination letters during the year, among which we count CDM Smith, Linde Group’s two American units. While Vantage Drilling International, Cobalt International Energy, Core Laboratories, MTS Systems, and Newmont Mining Corporation received equally positive news from the authorities who have closed investigations into potential violations by the companies. Companies can look forward to more settlement opportunities as the DOJ announced that it would convert the Pilot Program to a permanent guideline. Canada on the other hand, joined the camp of the UK, among others, and made facilitation payments illegal.
Not another Brazil corruption story!
The Car Wash investigations have swept several countries and embroiled hundreds of officials and people in business. During the year, Brazil’s President Temer survived no less than two prosecution vote in Congress sparing him a trial on corruption charges. A little less lucky were former Presidents Lula da Silva and Dilma Rousseff who have been charged with corruption cartel-formation and money laundering. Lula received almost 10-year’s prison on separate corruption charges also related to the Car Wash case. The investigations have spilled over the borders of Brazil leading to the arrest of Ecuador’s vice president and the former president of Peru.
Several companies involved in the Car Wash investigations, including JBS which will pay around USD 3.2 billion to settle charges of bribing almost two thousand local politicians. Odebrecht also reached a plea bargain and will pay USD 2.6 billion in fines despite having spent an aggregate USD 3.3 billion in bribes on government officials. Petrobras – the state-owned oil company with a central role in the scheme – saw its former CEO arrested. Despite huge losses, judge Moro, who’s overseeing the case, noted a big win for the year, namely, an approaching end to it all. Another personal win for Moro was the reception of an award from Notre Dame University for his work on the case.
Let’s move on, shall we?
Another fine award, a Pulitzer prize, was granted to the Panama Papers investigation, yet the win also came with the loss of a leading figure in the investigation, namely, Maltese Daphne Caruana Galizia, who was killed in a car bomb explosion near her home mid-October. Galizia investigated corruption within the inner circles of government and powerful underworld figures in Malta.
What’s Chinese and Arabic for corruption?
China continued cracking down on corruption and arresting several high-ranking officials throughout 2017. Following suit, is Saudi Arabia who took the world by surprise, when it embarked on an anti-corruption campaign arresting princes, business people, and former and current government officials. Whether these anti-corruption crusades are wins or losses for China and Saudi Arabia are nonetheless very much up for debate.
Carefully pick your friends and fonts Mr President!
Earlier in the year South Korea’s President, Park Geun-hye, faced impeachment and put on trial for colluding with her close friend to pressure South Korean companies into paying USD millions in return for political favours. One such company was no less than Samsung, whose acting head, appealed a five-year prison sentence on charges related to the same case. Another leader to be disqualified this year is Pakistan’s Prime Minister Nawaz Sharif. When the Panama Papers linked his children to offshore companies, his daughter provided certified Trust Declarations dating back from 2006 showing her as a trustee and not an owner of the companies. Yet, a forensic discovered that the Calibri font used in the documents was not commercially available until 2017.