According to a recent study released by Kroll Advisory Solutions, only 47% of Asia Pacific companies surveyed had conducted an assessment of the risks stemming from enforcement of the U.K. Bribery Act and the U.S. Foreign Corrupt Practices Act (FCPA). Of those who did not conduct assessments, 51.3% either do not know how strong their compliance programs are or believe their compliance programs are not strong enough. Asian companies have been the target of U.S. enforcement action in the past.
The U.S. Department of Justice (DOJ) agreed to end the deferred prosecution agreement of Pride International (Pride), an oil services company, one year early due to its strong anti-bribery compliance program. This is believed to be the first time the DOJ has ended a deferred-prosecution agreement related to the U.S. Foreign Corrupt Practices Act (FCPA) early. Pride faced FCPA charges for paying US$2 million in bribes to foreign officials in several countries including Saudi Arabia, Venezuela, Nigeria and Kazakhstan, in the early 2000’s. The case was part of a larger investigation into Panalpina, a Swiss logistics company.
The Republic of Korea Fair Trade Commission (FTC) has announced that it will prosecute Samil Pharmaceutical Co Ltd (Samil) for providing 302 South Korean hospitals and clinics with a total KRW2,100,830,009 (approximately US$1.94 million) in return for prescribing various Samil products to patients. The FTC stated that it will also issue Samil a corrective order and a penalty of KRW176 million (US$162,500), and noted that Samil had a system of "rebates" ranging mostly from 10-30% of the value of orders placed by medical service providers, with higher sums being paid for larger orders.
The U.S. Department of Justice and the U.S. Securities and Exchange Commission released the most comprehensive guidance on the U.S. Foreign Corrupt Practices Act (FCPA) to date this week. The guidance is intended to lessen confusion surrounding the law. The guidance restates many positions the government has taken on the law in the past and avoids making policy proclamations the U.S. Chamber of Commerce and other critics of the law had been seeking.
Oil company Total SA (Total) reported in its regulatory filing this week that it had set aside €308 million to settle the long-running investigation by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) into bribery allegations involving Total’s operations in Iran. The company also referred to proposed settlement agreements proposed by the U.S. authorities “that could be accepted by Total.” The U.S. authorities have been investigating Total’s attempts to obtain contracts to develop parts for Iran’s South Pars gas field since the early 2000’s.
Earlier this week, Wal-Mart Stores Inc. (Wal-Mart) hired Daniel Trujillo as the head of its international legal compliance program. Trujillo’s title will be senior vice president and chief compliance officer – Wal-Mart International. This is a new position at Wal-Mart as its international compliance program was previously organized at a regional level. The company is now centralizing the compliance function for its international offices in the wake of the announcement of a federal investigation into bribery at the company’s Mexico unit. Wal-Mart disclosed in September that the company had spent $51 million on an internal investigation related to the allegations. The U.S. Department of Justice and the Securities and Exchange Commission are also investigating the company. Trujillo is currently the deputy general counsel and director of compliance at oil field services company Schlumberger Ltd., which had previously disclosed that U.S. federal prosecutors are investigating it for possible violations of the U.S. Foreign Corrupt Practices Act (FCPA). Trujillo has advocated for the use of technology and risk-based data metrics in compliance. A lawyer briefed on the matter said that Trujillo has been given a “blank slate” at Wal-Mart to build the new compliance office.
Wall Street Journal: Wal-Mart Hires International Compliance Chief Amid Bribery Probe (16 October 2012)
(Source: Wall Street Journal)
Aluminium manufacturer Alcoa has agreed to pay US$85 million to settle a racketeering and fraud lawsuit brought against it by industrial company Aluminum Bahrain (Alba). The agreement reportedly includes a cash settlement as well as a long-term raw material supply contracts with Alba. Reportedly, Alba had alleged that Alcoa conspired with a businessman "to orchestrate bribes in Bahrain and to overcharge [Alba] for alumina", and sought over US$1 billion in damages.
Reuters: Alcoa paying $85 million cash to settle with Bahrain's Alba (9 October 2012)
Tyco International Ltd. (Tyco) has agreed to settle with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) over allegations it violated the Foreign Corrupt Practices Act (FCPA). According to the SEC, twelve separate bribery schemes were in place at Tyco subsidiaries located in China, France, Germany, Thailand and Turkey. The company agreed to pay back more than $13 million in illegal profits and prejudgment interest and to be “permanently enjoined” from future violations. Tyco also entered into a non-prosecution agreement with the DOJ and will pay $13.68 million dollars in fines to settle the allegations. The company did not have to admit guilt in either of the settlements. Both the SEC and DOJ referred to Tyco’s cooperation, voluntary disclosure of the issues and extensive internal investigation as reasons for the settlements. The company has also agreed to improve its internal controls and end its contracts with the third parties involved in the alleged bribes. In a related matter, a Tyco subsidiary in the Middle East pleaded guilty in federal court to conspiring to violate the FCPA.
Wall Street Journal: Tyco to Pay $26 Million to Resolve FCPA Allegations (24 September 2012)
(Source: Wall Street Journal)
Deloitte has released a report entitled Bribery and Corruption Survey 2012: Australia & New Zealand - A storm on the horizon? (undated). The survey was completed by 390 respondents responsible for risk management, who were asked about:
The United States (US) Securities and Exchange Commission (SEC) has announced that Tyco International Ltd (Tyco) has agreed to pay over US$26 million to settle SEC charges that it violated the Foreign Corrupt Practices Act (FCPA) when subsidiaries arranged illegal payments to foreign officials in more than 12 countries in the period 2006-09. The SEC alleged that Tyco subsidiaries engaged in schemes that involved the payment of "fake commissions", amounting to US$10.5 million, to obtain contracts. The SEC further alleged that Tyco's records were misstated as a result of the misconduct, and that it failed to maintain internal controls sufficient to detect the breaches.
SEC's media release (24 September 2012)
Related media and news item:
Department of Justice's (DoJ) media release (24 September 2012)
Reuters: Bribery costs Tyco over $26 million in U.S. penalties, lost profits (24 September 2012)
(Source: SEC; DoJ; Reuters)
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