Here’s what’s been going on in the compliance world this week:
- ING pays EUR 775 million to resolve ‘corrupt practices’ case in the Netherlands: ING Group NV, said this week that it has agreed with prosecutors to pay a fine of EUR 675 million and in addition disgorge EUR 100 million to resolve an investigation into ‘lax business practices’. Prosecutors said that the bank had violated laws on preventing money laundering structurally for many years by failing to properly vet beneficial owners and not noticing unusual transactions. ING said it was impossible to estimate how much money was laundered through these accounts, but prosecutors estimate “hundreds of millions of euros” were involved. Vimpelcom, which paid USD 835 million to settle bribery charges with Dutch and U.S. prosecutors in 2016, was among those who used ING’s services. The SEC issued a declination letter to ING a day after the Dutch penalty was announced. This action is consistent with the new policy against ‘piling on’ to avoid multiple-agency prosecutions.
- FCPA investigation into Ensco results in two declinations: Ensco, a drill-rig operator based in the UK, announced this week that it had received two declination letters from the U.S. DOJ and SEC. The investigation stemmed from the acquisition of its drillship DS-5 that the company acquired when it bought Pride International Inc. in 2011. Petrobras, which was supposed to use the drillship under contract, cancelled the contract in 2016 because of allegations of improper payments made to its employees. The “irregularities” involved a third-party marketing consultant of Pride. Ensco’s internal investigation found no evidence that any current or former Pride or Ensco employees were involved in or knew about the irregularities.
- Sanofi pays USD 25 million to resolve FCPA offenses: Pharmaceutical company Sanofi announced on Tuesday that it will pay USD 25.2 million to resolve charges relating to allegations that it paid bribes across the Middle East and in Kazakhstan. The U.S. SEC found that the company had violated the FCPA’s books and records and internal accounting controls provisions. Sanofi neither admitted or denied the SEC’s findings but agreed to pay USD 5 million in civil penalties in addition to disgorging USD 17.5 million and paying USD 2.7 million in prejudgment interest. The U.S. DOJ had announced earlier in March that it had closed its investigation into the allegations without bringing an enforcement action. The SEC’s order says that Sanofi bribed officials at public hospitals and clinics throughout the Middle East, including in Jordan, Qatar, the UAE among others. The investigation was first disclosed in 2014.
- BMW to pay USD 11.6 million to resolve dieselgate charges: Reports in German newspaper Süddeutsche Zeitung indicate that German prosecutors are about to wrap up their investigations into the carmaker’s conduct with the fine. About 7,600 BMW vehicles were accidentally outfitted with diesel emission manipulation devises. Prosecutors have determined that this was ‘sloppy work’ rather than intentional. Compared to other carmakers involved in ‘dieselgate’, the fine is tiny. Volkswagen paid around USD 25 billion in fines in the U.S. and Audi CEO Rupert Stadler is currently in jail.
- Russia amends procedure for prosecuting companies for bribery: On August 14th, Russia’s bribery laws were amended significantly. The amendments provide that companies may avoid liability when they self-disclose the offence, assist in the investigation, or in cases where a bribe was extorted. Courts have also gained the power to freeze the property of companies under investigation valued up to the maximum amount of a potential fine. Similarly, a suspect company’s bank accounts may be frozen if they believe it does not have enough funds to pay the potential fine. The accounts will then remain frozen until the company is found not guilty or pays the fine.
- Lula’s likely heir charged with corruption ahead of Brazilian election: Fernando Haddad, the likely heir to former President Lula for the presidential candidacy for Brazil’s Worker’s Party (PT), was charged over allegations the PT had accepted a payment of approximately USD 481,095 on Haddad’s behalf to cover debts accrued when he was campaigning to become mayor of Sao Paulo in 2012. The charges come as a blow to the PT, as former President Lula who has been convicted on corruption charges was barred from running in the election last week by the country’s top electoral court. Haddad is likely to be picked as the PT’s candidate in the coming days. The charges put a cloud over his candidacy, but it is unlikely that a trial would play out in time to ban Haddad from the election.
- Guatemala revokes mandate of U.N. anti-corruption body and bars head of agency: In an escalation of the dispute between the Guatemalan government,President Jimmy Morales ordered Ivan Velasquez, head of the International commission Against Impunity in Guatemala (CICIG), to be denied entry and asked the U.N. to send a replacement. CICIG has brought down Morales’ predecessor with a corruption probe. In addition, CICIG and Guatemala’s attorney general attempted last year to prosecute Morales over suspicions he had illegally financed his 2015 presidential election campaign. Morales has denied any wrongdoing. The U.N. High Commissioner for Human Rights has expressed concerns that Guatemala’s decision not to renew CICIG’s mandate could be a significant setback to efforts to root out criminal networks in the country.
- New head of UK’s SFO pledges to keep agency independent: Lisa Osofsky, the new head of the UK’s Serious Fraud Office (SFO) said on Monday in her maiden speech that the agency will remain independent and work closely with other law enforcement, regulators, and private sector actors to tackle economic crime. Osofsky said she will continue to strengthen cooperation across government bodies and with the private sector, in a manner that is similar to how corporate crime is dealt with in the U.S. Osofsky’s appointment comes after two years of uncertainty over the future of the SFO, which Prime Minister May considered folding into the National Crime Agency, before abandoning the plan. Before her appointment as head of the SFO, Osofsky worked in a number of positions, including as a former assistant U.S. attorney with the DOJ and more recently as head of investigations for Europe, the Middle East, and Africa at consulting firm Exiger.