This Week in Compliance

This Week in Compliance: SFO recovers bribe money from Chad diplomats

Here’s what’s been going on in the compliance world this week:

Business

  • Canadian miner Kinross Gold Corporation settles FCPA charges: The Canadian mining group has settled FCPA charges brought by the SEC for repeatedly failing to install adequate accounting controls and anti-corruption compliance programs in two of its African subsidiaries. The SEC alleges that it took Kinross three years to implement adequate controls, despite multiple internal audits flagging widespread deficiencies. As part of the settlement, Kinross paid a USD 950,000 civil penalty without affirming or denying the SEC’s findings. The case did not go to court; it was settled using an internal administrative procedure.
  • Royal Dutch Shell files criminal complaint against former senior executive in Nigerian graft probe: Dutch Prosecutors confirmed on Wednesday that they had received the complaint against Shell’s former vice president for sub-Saharan Africa Peter Robinson, in relation to the sale of an oil field in Nigeria worth USD 390 million. Dutch prosecutors indicated that the complaint would be included in their investigation of a different oil field, known as OPL 245, in which Robinson is already a defendant. However, Shell and co-defendant Eni deny any wrongdoing in the OPL 245 case. Shell has stated that their complaint against Robinson relates to the sale of different oil field known as OML 42 to a local company called Neconde Energy Ltd. Shell discovered the irregularities in the sale after an internal investigation.
  • SFO recovers bribe money from Chad diplomats: The UK Serious Fraud Office won the recovery of GBP 4.4 million in a UK High Court from two Chad diplomats who took bribes from Griffiths Energy International Inc, now known as Caracal Energy Inc. It is the first time the SFO has succeeded in returning money from overseas through a civil court case. The win for the SFO came after four years of fighting appeals against a previous 2015 freeze order. The SFO has said that the money will be transferred to the UK’s Department for International Development, which will invest the money in projects that will help the poor in Chad. Griffiths pleaded guilty in 2013 in Canadian Court to violating the CFPOA and paid CAD 10 million in criminal penalties.
  • Belgian medical device maker and two others debarred by World Bank: Eckert & Ziegler BEBIG s.a was debarred on Wednesday for engaging in “fraudulent practices” by misrepresenting the commission paid to a local agent in Bangladesh in relation to bids for two contracts, one of which it won, according to the World Bank. RKD Construction Pvt. Ltd., an India-based road builder, was also debarred in a separate and unrelated case for doctoring numbers in financial documents to improperly obtain advance payments. Lastly, Egis International Indonesia, a subsidiary of French infrastructure group Egis International, was debarred for misrepresenting “the availability of a key specialist” in relation to a road construction project in Timor-Leste.

Government

  • Former French President Nicolas Sarkozy to stand trial: French media reported on Thursday afternoon that former President Sarkozy is to face trial for corruption and influence peddling. The case centers around wiretapped phone calls from 2014, in which Sarkozy is alleged to have illegally sought to influence judges who were looking into allegations of irregularities in the financing of his campaign. The judge involved and Sarkozy’s lawyer are also facing trial. These charges are unrelated to the charges filed against Sarkozy last week pertaining to campaign funds, which were allegedly illegally obtained from Libya.

  • Brazilian appeals court confirms da Silva corruption conviction: Former Brazilian President Luiz Inacio Lula da Silva, who is currently leading in the polls for the October presidential election, saw his conviction on corruption charges confirmed by an appeals court this week. Da Silva was convicted last year of abusing his position in dealings with construction company OAS, in exchange for the promise of a beachfront apartment. His sentence was upheld and increased to 12 years and one month of imprisonment earlier in January by federal magistrates. Da Silva has maintained that the charges against him are trumped up in an effort to keep him from winning the presidency. The former president has one more motion he can file with the same court, but it seems likely that Da Silva will be jailed in the coming weeks.
  • Former South Korean President Lee Myung-bak arrested: The former President was arrested last Friday over allegations that he took KRW 11 billion in bribes from a number of actors, including business groups and his own intelligence agency. Lee also stands accused of using a private company as an illicit slush fund amounting to KRW 35 billion. Lee may be detained for up to twenty days before prosecutors officially bring charges against him. His arrest comes approximately one year after his successor Park Geun-hye was ousted from office over a separate complex corruption case that sparked months of protests.

Noteworthy

  • OECD implores Switzerland to strengthen anti-corruption laws: The Paris-based intergovernmental body published a report this week urging Switzerland to do more to prosecute companies, apply tougher sanctions, and increase its protection of whistleblowers. Switzerland has only made 11 convictions in corruption-related cases over the past decade, despite its vulnerability to corruption due to the nature of its export-driven economy. However, the organization did applaud Swiss authorities for its increased enforcement of foreign bribery provisions. There were 137 investigations into money-laundering and bribery in 2016, compared to only 24 in 2011.
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