This Week in Compliance

This Week in Compliance: Huawei Charged with Fraud in the U.S.

Business

  • Huawei hit with U.S. fraud charges: Chinese telecommunications giant Huawei was slapped with thirteen fraud-related charges by the DOJ on Monday. The charges are leveled against the company and three defendants, including CFO Wanzhou Meng. The charges pertain to a long-running scheme. Allegedly, executives at Huawei aimed to deceive global financial institutions and the U.S. government regarding the company’s activities in Iran. The authorities allege that the misrepresentation began in 2007, when Huawei employees misrepresented the company’s links to Skycom, an unofficial subsidiary of the firm in Iran. Huawei relied on the U.S. banking system to process dollar transactions for Skycom. CFO Meng was arrested in Vancouver, Canada in December and has been out on bail since. The DOJ said on Monday that it is now formally seeking her extradition.
  • SEC investigates Nissan in relation to Ghosn misconduct: Nissan confirmed this week that is under investigation by the U.S. Securities and Exchange Commission (SEC) in relation to the charges leveled against Carlos Ghosn, its former CEO who is currently being detained in Japan for allegedly under-declaring his income in excess of USD 60 million. It is understood that the SEC’s investigation is in the early stages; documents have been requested from Nissan and Ghosn. Nissan said in a statement that it is fully cooperating with the SEC’s inquiry.
  • U.S. imposes sanctions on “corrupt” Venezuelan oil firm PDVSA: The U.S. imposed sanctions on Venezuela’s state-owned oil company PDVSA this week, as it urged the country’s military to accept a peaceful transfer of power. U.S. Treasury Secretary Steven Muchin said the proceeds of the purchase of Venezuelan oil will be withheld from Maduro’s government unless opposition leader Guaido is recognized as the country’s leader. 41 percent of the country’s oil exports are sent to the United States.
  • Odebrecht debarred by the World Bank: Odebrecht, the Brazilian construction firm at the center of the Operation Car Wash corruption investigation, was debarred by the World Bank on Tuesday for a period of three years. The World Bank found that the firm had engaged in “fraudulent and collusive practices” during a project in Colombia. Subsidiaries in an additional nine countries, including the United States and Peru, were also debarred. The project in question is the World Bank-financed Rio Bogota Environmental Recuperation and Flood Control Project. Odebrecht has previously been fined by authorities in Brazil and the U.S. over related conduct.

Government

  • Saudi Arabia winds down anti-corruption campaignThe anti-corruption crackdown ordered by Crown Prince Mohammed bin Salman in November 2017 has ended. A royal court said this week that authorities had summoned 381 people under the campaign. Over USD 106 billion was recovered through settlements with senior princes, ministers, and businessmen. 87 people confessed to charges and reached settlements that included forfeiture of real estate, companies, and cash among other assets. The public prosecutor refused to settle the cases of 56 people with existing criminal charges, and an additional eight declined settlements.
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