Previous posts here and here took a look at Foreign Corrupt Practices Act enforcement actions concerning conduct (in whole or in part) in Vietnam and Thailand.
This post takes a look at FCPA enforcement actions involving conduct (in whole or in part) in the following Southeast Asian countries: Malaysia, the Philippines, Laos, and Myanmar.
Malaysia
The enforcement action concerned alleged bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.
The enforcement action concerned conduct in China, India, Thailand, Laos, Indonesia, Bosnia, Vietnam, Malaysia, Croatia, Serbia, Slovenia, Slovakia, Iran, Saudi Arabia, Libya, Syria, the United Arab Emirates, Mauritania, Congo, Niger, Madagascar, and Turkey.
As to Malaysia, the allegations stated: ““[Between 2000 to 2007] TFS Malaysia [an indirect wholly owned subsidiary of Tyco] used intermediaries to pay the employees of its customers when bidding on contracts. Payments were made to approximately twenty-six employees of customers, and one of those payees was an employee of a government-controlled entity. TFS Malaysia inaccurately described these expenses as ‘commissions’ and failed to maintain policies sufficient to prohibit such payments. As a result, Tyco’s books and records were misstated. Tyco’s benefit as a result of these illicit payments was $45,972.”
The enforcement action concerned conduct in Costa Rica, Honduras, Malaysia, Taiwan, Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali.
As to Malaysia, the allegations stated that “in at least 17 instances in or around 2004 to in or around 2006, Alcatel Malaysia [a joint venture in which Alcatel owned a majority share of and exercised control of] employees, with the consent and approval of Alcatel Malaysia’s management, such as Executive 2 [Alcatel Malaysia’s Country Senior Officer] and Executive 3 [Alcatel Malaysia’s Chief Financial Officer], made improper payments to Telekcom Malaysia [an alleged state-owned and controlled telecommunications provider in Malaysia responsible for awarding telecommunications contracts 43% owned by the Malaysian Ministry of Finance] employees in exchange for nonpublic information relating to ongoing public tenders.” The allegations further stated that Alcatel Standard entered into a consulting agreement for more than $500,000 with a Malaysian consultant even though “Alcatel typically paid its agents and consultants commission rates based on the total value of a contract rather than pay a fixed fee for services.” “At the time the payments were made to Malaysian Consultant 1, Alcatel Malaysia and Alcatel Standard were aware of a significant risk that Malaysian Consultant 1 would pass on all or a part of these payments to foreign officials.”
The enforcement action concerned conduct in China, Korea, Malaysia and the United Arab Emirates.
As to Malaysia, the allegations concerned conduct with individuals associated with Petronas (an alleged state-owned or state-controlled enterprise in Malaysia).
Philippines
The enforcement action concerned the company’s alleged “failure to devise and maintain sufficient internal controls over a global hospitality program that the company hosted in connection with its sponsorship of the 2008 Beijing Summer Olympic Games” and involved invitations to officials in the following countries: Burundi, the Philippines, Congo and Guinea.
As to the Philippines, the allegations stated:
“In July 2007, BHPB became embroiled in a dispute with a local JV partner concerning a prospective nickel mining operation in the Philippines. The JV partner sued BHPB in local court and filed requests with the country’s Secretary of Department of Environment and Resources (“DENR”), requesting reversion of the mining rights that the JV partner had assigned to the JV.
In October 2007, a BHPB employee from the Stainless Steel Materials CSG submitted a hospitality application to invite the Secretary and his spouse to attend the Olympics, with airfare included. The completed application contained a “Yes” response to Question 10, but only described a technical services agreement that BHPB was considering submitting to the DENR for the Secretary’s approval. Question 10 of the hospitality form did not explicitly require, and the employee’s response did not provide, any information about the Secretary’s role in reviewing the JV partner’s reversion request or the fact that the President of the Philippines had designated the Secretary to mediate the dispute between BHPB and its JV partner. The form included a “No” response to Question 11.
The Secretary accepted BHPB’s invitation in December 2007. In March 2008, he issued a decision denying the JV partner’s reversion request and continued during the ensuing months to mediate the parties’ dispute. In late July, BHPB became concerned that the company’s JV partner had learned about the Olympics invitation. As a result, BHPB withdrew the invitation shortly before the Olympics began.”
The enforcement action concerned conduct in the Philippines and the allegations stated: “Emery Transnational, a Manila, Philippines-based firm engaged in shipping and freight operations in the Philippines, was controlled by a wholly-owned, U.S.-based subsidiary of Con-way. … [B]etween 2000 and 2003, Emery Transnational made approximately $244,000 in improper payments to foreign officials at the Philippines Bureau of Customs and the Philippine Economic Zone Area. […] [T]hese payments were made to induce these foreign officials to violate customs regulations, settle customs disputes, and reduce or not enforce otherwise legitimate fines for administrative violations.”
The enforcement action concerned conduct in China, Thailand, and the Philippines.
As to the Philippines, the allegations stated: “InVision, through the conduct of certain employees, was aware of a high probability that its agents or distributors in the Philippines … had paid or offered to pay money to foreign officials or political parties in connection with transactions or proposed transactions for the sale by InVision of its airport security screening machines.”
Laos
The enforcement action concerned conduct in China, India, Thailand, Laos, Indonesia, Bosnia, Vietnam, Malaysia, Croatia, Serbia, Slovenia, Slovakia, Iran, Saudi Arabia, Libya, Syria, the United Arab Emirates, Mauritania, Congo, Niger, Madagascar, and Turkey.
As to Laos, the allegations stated: “[Between 2000 to 2006] ADT Thailand [ADT Sensormatic Thailand an indirect wholly owned subsidiary of Tyco] recorded payments in the amount of approximately $78,000 to one of its subcontractors as payments for site surveys for a government traffic project in Laos, but the payments instead were channeled to other recipients in connection with ADT Thailand’s business in Laos.
Myanmar
The enforcement action concerned conduct in Costa Rica, Bangladesh, Bulgaria, Egypt, Indonesia, Myanmar, Panama, the United Arab Emirates, and Vietnam.
As to Myanmar, the allegations stated: “Aon Limited retained an introducer in Myanmar to assist Aon Limited in connection with its account with Myanmar Airways and Myanmar Insurance, two government-owned entities.” “Company records indicate that the introducer likely used a portion of his commission to improperly influence a government official on Aon Limited’s behalf in connection with the Myanmar account.”
