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 Italian oil giant Eni's FCPA violations in Algeria. Read the full story and more news below:
Italian Oil Giant Eni Settles Bribery Probe for USD 24.5 Million:
Italy's largest company Eni SpA settled a bribery probe involving allegations of FCPA violations in the company's dealings with an Algerian-state owned oil company. The U.S. Securities and Exchange Commission (SEC) found that Eni's U.S. subsidiary, Saipem SpA, used an intermediary that had close ties to Algeria's Energy Minister to direct funds through shell companies to high-ranking public officials from 2007 to 2010. The payments, which were worth around USD 215 million, were allegedly done with the knowledge of Saipme's former CFO, Alessandro Bernini, who was cleared of wrongdoing by a Milan court in 2018. According to the SEC, Saipem violated FCPA provisions by failing to implement the headquarter's anti-corruption compliance controls and falsifying and backdating contracts for procurement controls. While Eni neither denied nor admitted the alleged wrongdoing, Saipem denied all allegations, and the SEC has closed its investigation.
UK Court Grants GBP 8.6 Million to Ex-EY Whistleblower:
The High Court of England and Wales ordered global accounting giant EY to pay GBP 8.6 million (USD 10.8 million) in remediation damages to former whistleblower Amjad Rihan. Rihan, who led an audit that uncovered potential money laundering violations at Dubai's biggest gold refiner in 2014, refused to cover-up graft and reported his concerns internally. The whistleblower was later forced to step out of his position and leave the country after his audit's findings were covered up by the company as 'documentary irregularities'. The High Court ruling also determined that Rihan's audit uncovered USD 937 million worth of transactions classified as 'high risk' in Sudan, Ghana, Iran, and the Democratic Republic of Congo. EY stated that they intend to appeal to the judge's ruling.
Baidu Accuses Former Executive of Corruption:
Chinese tech giant Baidu has reported its former VP of finance to the police for corruption allegations. The report comes after Baidu's professional ethics committee ran an investigation into the former VP, Wei Fang. Wei held the position of VP of finance in 2018 and other supervisory roles in different subsidiaries in previous years. The exact nature of the allegations was not made public. Baidu established its ethics committee in 2011 and has so far investigated more than 100 of its employees and dismissed over 14 of them over corruption-related accusations.
SEC Issues USD 5 Million Whistleblower Award:
The SEC issued a whistleblower award worth USD 5 million to an individual who provided essential information to an ongoing investigation that led to successful enforcement action. The individual, who faced retaliatory action internally as a consequence of raising internal concerns, was described to have provided critical evidence on wrongdoing which saved a significant amount of time and resources to the SEC. This award counts as the seventh award issued to an individual whistleblower in the month of April.
Policy & Guidance Updates
GRECO Issues COVID-19 Anti-Corruption Guidance:
The Council of Europe’s Group of States against Corruption (GRECO) issued new guidelines to EU member states targeted at preventing corruption risks associated with the COVID-19 pandemic. The new guidelines address the increased corruption risks the health sector is being subjected to as authorities relax procurement rules in the scramble to meet the immediate need for medical supplies. The guidance also highlights how central authorities must maintain transparency, oversight, and accountability amid the increased level of power centralization during the pandemic. GRECO also stressed the importance of IT platforms dedicated to transparency as a crucial element in corruption prevention as the economy goes digital.
Denmark Will Not Give COVID-19 Aid To Companies Registered in Tax Havens:
Denmark has just announced it will be joining Poland's position as one of the two countries in the world refusing to provide COVID-19 aid to companies registered in tax havens - denoted by the EU's list of non-cooperative tax jurisdictions. After extending its emergency relief aid package to July, the Danish government stated that companies making use of tax havens listed under EU guidelines will no longer be eligible for compensation. While Poland's prime minister took a similar decision on April 8th when announcing the Polish emergency relief bailout, experts still raise concerns about the EU's tax haven blacklist not maintaining an account of the tax havens that operate within Europe.
Guatemala Health Officials Fired in Relation to Corruption Investigation:
Two deputy health ministers have been fired for corruption accusations in Guatemala. Hector Marroquin, the administrative deputy minister of health, and Rodolfo Gamez, the technical deputy minister of health, were found to be part of an alleged corruption ring inside the health ministry. Guatemala's presidential commission against corruption alleged that eight officials including the latter two conspired to defraud state funds during the pandemic. A spokesperson for The Ministry of Health did not confirm any further details on the investigation.