This Week in Compliance

This Week in Compliance: Global Anti-Bribery Enforcement Increased Significantly in 2018

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  • Global Anti-Bribery Enforcement Increased Significantly in 2018: A new report by Trace International found that enforcement agencies outside the U.S. are increasingly prosecuting foreign bribery. The group found that there were 196 ongoing bribery investigations by non-U.S. enforcement agencies at the end of the 2018, representing a 29 percent increase from 2017. However, the U.S. still accounts for 35 percent of the world’s bribery investigations as of late 2018. The rise in the number of investigations is likely the result of increased cooperation by enforcement authorities around the world, in addition to the adoption of anti-corruption standards

Business

  • MTS to pay USD 850 million to resolve FCPA violations: Russia’s largest telecommunications company, MTS, will pay a total of USD 850 million to the DOJ and SEC to resolve FCPA violations. The SEC said MTA paid USD 420 million in bribes to an Uzbek official related to former President Karimov in order to secure business in Uzbekistan. MTS agreed to pay a USD 100 million penalty to the SEC and the company and a subsidiary entered into a deferred prosecution agreement with the DOJ. The company will also pay USD 850 million in criminal fines and forfeiture; the USD 100 million penalty paid to the SEC will be credited against the fine. Sweden’s Telia and Amsterdam-based VimpelCom previously paid USD 965 million and USD 795 million respectively over related conduct.
  • Shell facing bribery charges in the Netherlands: Shell said late last week that the Dutch Public Prosecutor’s office is preparing to prosecute the oil company for “criminal charges directly or indirectly related” to alleged corruption in a USD 1.3 billion oil deal Nigeria. The company is already standing trial over the conduct in Italy. Shell and its Italian partner Eni have denied wrongdoing in the case. However, two middlemen in the case were convicted by a judge in Milan in September of last year. The Dutch prosecutor’s office has not yet filed formal charges, but the office did say in a statement that it concluded there are prosecutable offenses. Shell and Eni are also fighting a lawsuit in London from the Nigerian government which is suing for USD 1 billion in an attempt to reclaim the money it says belongs to the Nigerian people.
  • Hempel pays USD 33.4 million to resolve foreign bribery charges: Danish coatings maker Hempel A/S said Monday that it agreed to pay USD 33.4 million in fines to enforcement agencies in Denmark and Germany. The company said that it self-reported the violation after discovering “illegal sales practices” in April 2017 in Germany and other countries in Europe and Asia. Hempel said it has since completed international remediation, invested heavily, and established a robust compliance framework.
  • Whistleblower awarded over USD 2 million by CTFC: The U.S. Commodity Futures Trading Commission announced this week that it has awarded over USD 2 million to a whistleblower who supplied original information that led to a successful recovery. The individual provided critical information through independent analysis of market data. The Commission denied applications for awards by four other claimants. However, the director of the CFTC’s Whistleblower Office Christopher Ehrman indicated that he expects more awards to be issued to whistleblowers who provide information based on their expert analysis of market data.

Government

  • Irish whistleblower hotline receives just 33 calls in three months: It was revealed this week that a new hotline set up by the Garda Anti-Corruption Unit launched in September 2018 in Ireland had only received 33 calls in the first three months. Most of the calls were received in the first month of operation. The hotline was established following the passage of the Criminal Justice (Corruption Offence) Act in 2017, which overhauled the penalties for corruption and bribery in both the public and private sectors. The low number of calls is surprising, as Irish people indicated in the 2013 Eurobarometer report that 81 percent believed corruption is widespread in the country.
  • Israeli authorities announce intent to indict Netanyahu: It was announced late last week that Israel’s Attorney General intends to indict Prime Minister Benjamin Netanyahu on bribery, fraud, and breach of trust charges in a long-running investigation. Israeli police have spent two years investigations three separate cases (knows as Cases 1000, 2000, and 4000) involving numerous allegations of accepting unreported gifts, giving tax breaks to donors, and bribery. Netanyahu has labeled the move an opposition scheme intended to force him out of the coming elections scheduled for April 9th. However, since a hearing will need to be held first, it is unlikely that the charges will formally be filed before the election.
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