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 a probe into Siemens, GE, and in China. Philips Read the full story and more news below:
SEC Probing Siemens, GE, Philips in Alleged China Medical Equipment Graft Scheme:
Reuters reported this week that according to two of its U.S. sources, the U.S. Securities and Exchange commission is investigating Philips NV, General Electric Co, and Siemens AG in an alleged scheme where they used middlemen to negotiate bribes with Chinese government and healthcare officials in order to sell medical equipment. The probe represents a new effort by U.S. authorities to crack down on corruption in the sale of expensive medical equipment worldwide. Reuters reported on a parallel probe into the sale of medical equipment in Brazil last month. All three firms have denied wrongdoing and told Reuters they were unaware of any SEC investigation concerning their operations in China.
SFO fines FH Bertling USD 1 million for freight contract bribes:
The UK Serious Fraud Office fined FH Bertling Ltd GBP 850,000 (USD 1 million) Monday for bribes paid to secure contracts in Angola. After a five year long investigation which uncovered the first bribery scandals in July 2016, FH Bertling Ltd was reported to be involved in the bribing of a local state oil company in Angola to secure USD 20 million in shipping contracts. In total, thirteen individuals have been charged as part of the SFO’s investigation into the company, including the former CFO, Bertling’s managing director for London, and the former CCO. During the investigation, Bertling’s UK unit stopped doing business and went into liquidation after pleading guilty to corruption charges in 2016.
SEC awards to whistleblowers USD 3 million:
The U.S. Securities and Exchange Commission announced it has awarded USD 3 million to two whistleblowers for a tip that led to a successful enforcement action into securities law violation impacting retail investors. As the two brought their tip jointly, they will share the award. The SEC also noted that the whistleblowers “undertook significant and timely steps to have their employer remediate the harm caused by the alleged violations”. The whistleblowers did not offer the information “voluntarily”, as another agency had already requested information from their employer. However, the SEC decided to use its discretion to waive the requirement that the information has to be offered “voluntarily” in light of the unique circumstances of the case.
Automakers accuse Russian courts of corruption:
Hyundai, Kia, Mercedes, and Jaguar Land Rover have filed a complaint with Russian authorities alleging that Krasnodar judges abuse Russia’s consumer protection system by seeking inordinate levels of compensation for car owners, according to a Moscow-based law firm representing the automakers. The automakers are accusing the courts in southern Russia of using consumer protection claims to scam them out of USD 3 million between 2016 and 2018. It is alleged that some courts order compensations averaging three times the vehicles’ original sales price. The complaint was sent to President Vladimir Putin’s anti-corruption council, the Federal Security Service (FSB), the General Prosecutor’s Office and a panel of Russian judges, RBC reported.
Peru leader forcing showdown with congress on corruption:
Peruvian President Martin Vizcarra called on legislators last Wednesday to usher through five reforms aimed at eradicating Peru’s endemic corruption. Vizcarra, who has consistently clashed with Peru’s opposition-led congress, threatened congress by saying that if the proposal was rejected, he would invoke a constitutional provision that would entitle him to dissolve congress entirely. The reforms Vizcarra is looking to implement seek to prevent future corruption in government and include measures to curtail special privileges as well as well as withdraw on Peru’s parliamentary immunity. In a country where nearly every former living president is being investigated in connection to corruption, Vizcarra’s stark actions to punish corruption have set him apart from previous Peruvian leaders.
Pollution cover-ups exposed in Chinese provinces:
The Chinese central environmental ministry has uncovered thousands of violations to environmental regulations over the past year. The ministry’s most recent release in mid-May which looked at ten Chinese provinces, evaluated how these provinces had addressed such problems since the first investigations in 2017. It was found that some local governments continued to engage in the fabrication of false environmental reports and in helping companies conceal illegal dumping activities from the central government. In contrast, the report also showcased that some local governments such as the Shanxi and Hunan province authorities had effectively fined polluters for millions of dollars and set out to resolve thousands of environmental violations. The ministry called these “positive results” as China has been trying to reduce its environmental damage and boost initiatives to preserve its biodiversity.