This Week in Compliance

Samsung Heavy Industries Pays $75 Million to Resolve FCPA Offenses:

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 Samsung Heavy Industries’ FCPA offenses in Brazil. Keep reading for this breaking story and find more news below:

Top Story

Samsung Heavy Industries Pays USD 75 Million to Resolve FCPA Offenses:

One of the world’s largest shipbuilders, Samsung Heavy Industries (SHI), settled FCPA charges this week by  paying USD 75 million in penalties. Samsung was charged for violating the FCPA’s anti-bribery provisions from its branch office located in the US and entered a three-year deferred prosecution agreement with the DOJ. SHI admitted to paying USD 20 million in commissions to an intermediary who used part of the money to bribe officials from Brazil’s state-owned energy company, Petrobras. The bribes were given to secure that Petrobras leased a SHI drilling ship that was being built for another Houston based offshore oil drilling company. Samsung also entered into a memorandum of understanding with three Brazil enforcement agencies and is facing penalties due to Brazilian authorities. While SHI has received some credit for taking remedial measures, the DOJ stated it did not receive full cooperation from the company and that Brazilian enforcement agencies were instrumental for the resolution of the case.

Business

Apple fined by OFAC over 47 sanctions violations:

Apple agreed this week to pay the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) USD 467,000 in order to settle violations of the Foreign Narcotics Kingpin Sanctions Regulations after its screening tool failed to identify a sanctioned company and its owner. The company in question is a Slovenian firm called SIS, d.o.o. with which Apple entered into an agreement for app development in 2008. OFAC In February 2015, OFAC designated SIS and Savo Stjepanovic, a director and majority owner of SIS, under the Foreign Narcotics Kingpin Designation Act and added them to the List of Specially Designated Nationals (SDN) and Blocked Persons. Apple’s screening software failed to identify the firm as a blocked company due to an issue with matching different upper case and lower case letters. Apple identified the issues when it updated its screening tool in February 2017.

Alstom fined GBP 16.4 million for overseas bribery:

The UK’s Serious Fraud Office (SFO) ended its decade-long investigation into Alstom by sentencing a UK subsidiary of the firm for bribery in Tunisia. Alstom Network UK Ltd was ordered to pay GBP 16.4 million for conspiracy to corrupt a contract to supply trams. The SFO said the company paid an intermediary called Construction et Gestion Nevco Inc. (Nevco) EUR 2.4 million for a contract with Tunisia Metro worth EUR 79.9 million. The SFO said Nevco was “simply a conduit for bribes”, but Alstom faked internal compliance checks by creating paperwork to show services rendered. Another Alstom unit in the UK already plead guilty in 2016 to charges in the UK that it paid nearly USD 23 million in penalties for bribing Lithuanian officials to win power projects. Lawrence Hoskins, a UK citizen and former Alstom vice president was convicted of violating the FCPA and money laundering earlier this month in Connecticut.

Petrofac accused of keeping fake accounts to disguise bribes:

The Guardian has confirmed UK-based Petrofac’s involvement in Unaoil’s 17-year bribery scheme. Unaoil executives recently pleaded guilty to bribery and to conspiring to facilitate bribes on behalf of other MNCs to secure contracts in nine countries. Petrofac has been identified as one of the conspiring firms and has previously disclosed that they hired Unaoil for the provision of consultancy services in Kazakhstan from 2002 and 2009. According to the U.S DOJ’s Unaoil indictment, Unaoil executive, Cyrus Ahsani, conspired with employees of a firm to pay bribes and obtain public contracts in Kazakhstan from 2003 to 2010. The Guardian has identified the company to be Petrofac and has also identified a Petrofac executive that was allegedly involved in the concealment of the bribe payments in the company’s bookkeeping records. While Petrofac is already under investigation by the UK’s SFO for suspected corruption accusations in relation to the US’s investigation into Unaoil; it has newly denied all allegations and stated they will continue to collaborate with the SFO investigation. 

Swedbank to investigate reports of possible U.S. sanctions breach:

Swedbank has been accused by Swedish public service broadcaster, SVT, to have violated U.S sanctions by allowing the transfer of money from a sanctioned Russian arms company. Swedbank, which is already conducting an internal probe into potential money laundering breaches, stated that they were not aware of this violation. According to STV’s accusation, the bank used the business network of a Russian oligarch who owns shares in the Russian arms firm to transfer more than USD 1.1 million from Kalashnikov Group to the group’s U.S. subsidiary. Kalanishnikov’s Russia-based parent company was put on a U.S. sanctions lists in 2014. While Swedbank is also being investigated by U.S authorities for its role in the Baltic money laundering scandal, Swedbank has stated it will finish its internal investigation in early 2020 and will communicate its findings to STV. 

Government

Spain to trial uncle of Syria’s Bashar al-Assad:

 Spain’s High Court said last Friday that it will trial Syrian president’s Bashar al-Assad’s uncle for money laundering after an investigation judge concluded a probe. The prosecutor’s office now has ten days to comment on the judge’s recommendation that the case goes ahead, which is considered a formality, after which a trial date will be said. Two years ago, the High Court confiscated in excess of EUR 600 million thought to be linked to Rifaat al-Assad.

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