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 the new protections under the EU whistleblower directive. Read the full story and more news below:
Whistleblowers to Receive Extensive EU-wide Protections Under New Directive:
EU negotiators reached agreement this week on a new Directive that will standardize legal guarantees among the trading bloc’s members countries for those exposing corruption, tax evasion, and other crimes. Whistleblower protection is currently handled by 28 national authorities across the bloc, which has led to a wide variety of approaches, including many member states who lack any laws protecting whistleblowers. The directive guarantees protection for whistleblowers in both companies and public bodies whether they first report misconduct through internal channels or directly approach public authorities. Whistleblowers will also obtain legal protections if they disclose the misconduct directly to the media in case there was no response to the first report of breaches or in cases where whistleblowers are at risk of retaliation. Moreover, all businesses with more than 50 employees will face an obligation to create effective and efficient reporting channels. The rules will need final approval from the European Parliament and Council before entering into force.
DOJ updates FCPA Corporate Enforcement Policy:
The U.S. Department of Justice (DOJ) updated its FCPA Corporate Enforcement Policy this week to allow the use of “ephemeral messaging platforms” such as WhatsApp for business communications, provided that controls are put in place to ensure the appropriate retention of business records. In addition, the updated policy now reflects the DOJ’s view that there will be a presumption of a declination in a situation where a company with a robust compliance program undertakes an M&A transaction where through timely due diligence, or where appropriate through post-acquisition audits, misconduct is uncovered that is subsequently self-disclosed and handled in accordance with the policy. The policy allows the DOJ to credit or even decline prosecution of companies that voluntarily self-disclose, fully cooperate, and remediate the misconduct in a timely manner.
U.K. Parliament Committee releases report on Bribery Act hearings; increases pressure on the government to extend ‘failure to prevent’ offense’:
Following several months of testimony from many senior figures at the SFO, in-house as well as external counsel representing both small and large businesses, the UK Parliament’s Bribery Act 2010 Committee released its findings on Thursday. The committee praises the Act as “an excellent piece of legislation which creates offenses which are clear and all-embracing”. The committee did criticize the lack of clear guidance on creating a formal anti-bribery policy available for small and medium enterprises. There was also criticism of the slow pace of investigations and the lack of updates available to businesses and individuals under investigation. The committee found that Deferred Prosecution Agreements (DPAs), an instrument used in a number of major Bribery Act cases recently, are being used successfully and according to the committee do not constitute “an easy way out” for companies.While the report does not formally recommend extending the ‘failure to prevent’ offense, the committee does call upon the UK government to stop delaying reaching a conclusion on evidence received on the issue two years ago. Mark Saville, the former Supreme Court judge and chair of the committee said he would “encourage government to extending it” to areas where it currently does not apply.
U.S. CFTC says it will join DOJ and SEC in prosecuting foreign bribery:
The U.S. Commodity Futures Trading Commission (CFTC) announced last week that it will work alongside the DOJ and SEC to investigate foreign bribery and other forms of corruption. The CFTC said that companies that self-report violations may be eligible for declinations. The agency’s enforcement chief said that the CFTC already has open investigations into allegations of foreign bribery. While the CFTC does not have the authority to prosecute FCPA cases, it believes it can prosecute foreign conduct that somehow touches the U.S commodities and futures markets under an expansive theory of enforcement. Assistant Attorney General Brian Benczkowski said the DOJ looks forward to working in parallel with the CFTC in cases involving foreign corrupt practices.
Denmark plans to give financial watchdog authority to impose fines directly:
Denmark is planning to allow its financial watchdog to impose fines without first going to the courts, in an effort to speed up efforts to punish banks involved in money laundering. The step is the latest in response to the country’s money-laundering scandal involving Danske Bank; it is estimated that as much as EUR 200 billion in dirty funds were moved through the bank’s Estonian unit. The scandal has widened in recent months to also engulf Sweden’s Swedbank AB. Denmark already raised the maximum penalty for money laundering by 700 percent to USD 4.5 billion, but the new maximum will not apply retroactively. The proposal to bypass the courts will still need to be debated in Denmark’s parliament before it can enter into force.
U.S. DOJ indicts Karimova for receiving USD 850 million in bribes:
Following the USD 850 million fine levied on Russian telecommunications company MTS, the DOJ has now unsealed charges against the daughter of former Uzbek President Islam Karimov. Gulnara Karimova was charged with conspiracy to commit money laundering. The DOJ said that Karimova demanded hundreds of millions in bribes from MTS, Telia, and Vimpelcom to acquire licenses in Uzbekistan. All three companies have been hit with fines in the hundreds of millions related to the misconduct. Karimova conspired to launder the bribes through the U.S. financial system. Karimova has been under house arrest in Uzbekistan since 2014.
Ukraine’s bribery investigators under investigation for bribery:
Ukraine’s new State Bureau of Investigation has announced that it will look into allegations that bribes were accepted by officials at Ukrainian law enforcement agencies that were looking into a scheme that involved cronies of the president illegally extract millions from the country’s defense industry. The scheme involved top defense officials selling smuggled Russian military equipment for inflated prices using fraudulent contracts while the war raged in Eastern Ukraine. A report released Monday implicated Ukraine’s president Petro Poroshenko and several other top officials. Moreover, nearly all of Ukraine’s law enforcement agencies were aware of the scheme for three years and accepted bribes to not do anything about it.
OECD expresses concern over SNC-Lavalin affair:
Officials with the Organisation for Economic Co-operation and Development said this week that they are “concerned” by allegations of attempted political interference by Prime Minister Justin Trudeau and his senior officials. Officials sent a letter to Canadian authorities indicating they are following the case closely. Trudeau has been under fire for weeks now over the scandal as multiple senior figures in his government have resigned from their positions. The Prime Minister has maintained that none of the discussions he and top officials had with his then-acting Attorney General in September and December 2018 were “inappropriate”.