This Week in Compliance

This Week in Compliance: U.S. Federal Investigators Probe Boeing 737 MAX Certification Process

Top Story

  • U.S. Federal Investigators Probe Boeing 737 MAX Certification Process: Officials for the U.S. Department of Justice (DOJ), the Transporation Department (DOT), and the Federal Bureau of Investigation (FBI) announced this week that they are investigating whether the Federal Aviation Administration (FAA) rigorously followed existing engineering and designing standards when they approved the plane’s suspected stall-prevention measure. The authorities are also examining whether the FAA took shortcuts that compromised safety as Boeing was eager to complete the certification process as quickly as possible. The stall-prevention system was created specifically for the 737 MAX, but was not highlighted in pilot manuals or training materials. Questions center on why the FAA allowed the system to operate with the input of a single sensor rather than requiring input from multiple sensors. The scope of the investigation is unclear, but the focus of the investigation is said to be possible ‘cozy relationships’ between Boeing and FAA inspectors.

Business

  • Two foreign bribery convictions in Canada under CFPOA: Two more individuals were convicted in the Crypotmetric Inc. scandal in Canada under the Corruption of Foreign Public Officials Act (CFPOA). Robert Barra, an American citizen, and Shailesh Govinda of the UK were convicted for CFPOA offenses. The convictions stem from the second ever trial under the CFPOA. The case is remarkable as there was no evidence that a bribe was ever paid, nor that the contract was ever awarded. The case revolves around a failed scheme to bribe Air India officials and has been under investigations for many years.
  • Google fined EUR 1.5 billion for advertising violations by EU: Search giant Google was hit with a EUR 1.49 billion fines from the EU this week for blocking rival online search advertisers. European Commissioner Vestager said the firm broke the trading bloc’s anti-trust rules by using its dominance to shield itself from competitive pressures through imposing anti-competitive contractual restrictions on third-party websites. The fine follows last year’s record-breaking EUR 4.43 billion fine imposed on Google for using its Android operating system to block rivals.
  • Investors in 19 countries sue Danske Bank over money-laundering scandal: A group of pension funds, government entities, and other assets managers filed a lawsuit against Danske Bank in relation to its money-laundering scheme in the Baltics and Russia. The investors are seeking to recoup USD 475 million in damages following losses stemming from the money-laundering scandal. The investors allege that the bank knew of the problems since 2013 but failed to take action. The lawsuit is the latest development in the fallout from the scandal; shareholders called for bank management to be held personally responsible for the scandal at its latest annual shareholder meeting. The bank also continues to face probes by authorities in numerous jurisdictions, including the U.S. Securities and Exchange Commission.
  • EU anti-trust regulator set to offer online whistleblowing: Whistleblowers will be able to report suspected price-fixing or other cartel-forming to the European Commission’s anti-trust regulator online instead of showing up at the offices in Brussels. The effort is designed to make it easier to come forward with allegations. The regulator runs a leniency program rewarding companies with reduced fines for reporting a cartel or providing evidence. Whistleblowers will continue to enjoy the same protections and documents uploaded to the Commission’s servers will remain confidential and will not be made available to litigants in civil lawsuits.

Government

  • President of Japanese Olympic Committee to resign amid corruption allegations: Tsunekazu Takeda, the head of the Japanese Olympic Committee (JOC) is set to assign following allegation in Tokyo’s successful bid to host the 2020 Olympic Games.Takeda has denied the allegations ever since The Guardian reported in May 2016 that the Tokyo Olympic bid team had made payments to a consultancy linked to the son a disgraced IOC official. French authorities have launched a probe into the allegations; Takeda was placed under formal investigation in December. Takeda has insisted that the payments were legitimate, but the allegations have cast a shadow over his leadership of the games.
  • Top Canadian government official retires early over SNC-Lavalin scandal: Clerk of the Privy Council, Michael Wernick, one of Canada’s top government officials, has announced he will retire ahead of schedule as he believes he can no longer serve in his role in the upcoming election season. The Clerk of the Privy Council is the top civil servant tasked with supporting the implementation of whichever government is in power. Former attorney general Jody Wilson-Raybould has accused Wernick of being one of the individuals pressuring her to intervene in the SNC-Lavalin court case. Critics had accused Wernick of partisanship in his defense of his own behavior and the behavior of Prime Minister Justin Trudeau.
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