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Friday Roundup

Roundup

Is ISO 37001 a flop?, scrutiny alerts and updates, and for the reading stack. It’s all here in the Friday roundup.

Is ISO 37001 a Flop?

Microsoft has been under FCPA scrutiny since March 2013.

This recent blog post by David Howard (Microsoft’s Corporate Vice President & Deputy General Counsel) titled “An Update on Microsoft’s Approach to Compliance” caught my eye. It begins:

“Later this month, I’ll be moderating a panel of Microsoft’s compliance team at The Global Ethics Summit, an annual event where company leaders exchange ideas and share best practices about compliance issues. At the Global Ethics Summit, I plan to talk about some of the innovations we’ve been bringing to compliance at Microsoft over the past year or so. We’re proud of Microsoft’s strong commitment to doing business in a way that builds and maintains trust with our customers and other key stakeholders, and look forward to sharing some of our thoughts.

We always have to recognize, however, that compliance is an area that we have to approach with more than a small dose of humility. We’re a global company with more than 120,000 employees in more than 190 countries. With our size and scope, we can’t achieve a perfect score on compliance; we’re going to have our share of issues, small and sometimes unfortunately not so small. For instance, we’ve previously disclosed publicly that we have been responding to U.S. inquiries in connection with the Foreign Corrupt Practices Act. That’s why we always want to approach compliance with a growth mindset, learning from our successes and our failures, and thinking hard and creatively about how we can get better.

One way to learn is to hear about what other companies are doing, which is why we are participating in the Global Ethics Summit. We hope to hear about what other companies are thinking, and we are happy to share some information about our new initiatives. In particular, we’ll be talking about these new approaches we’ve been taking:”

Among the topics mentioned was the following:

“We’re the first U.S.-based company committing to the ISO Anti-Bribery Management Standard.

Over the last several years, representatives from more than 60 countries worked together to develop an anti-bribery standard for organizations of any size or structure, and in October 2016, the International Standards Organization published ISO 37001 Anti-Bribery Management Systems. After being closely involved in the development of ISO 37001, Microsoft will seek certification from an independent and accredited third party to demonstrate that our anti-bribery program satisfies the requirements of the standard. We hope other companies will do the same. A common consistent and rigorous standard for anti-bribery will cut across countries, industries and all segments of the value chain.”

A couple of questions regarding the above paragraph.

Does anyone know if there is a central repository of companies that have become or are seeking ISO 37001 certification? If so, please contact me at fcpaprofessor@gmail.com.

If there is such a central repository, and indeed Microsoft is the “first U.S.-based company committing to the ISO Anti-Bribery Management Standard,” then ISO 37001 (released on Oct. 14, 2016) would appear to be a complete flop and the corporate community has, with good reason, viewed it as a complete a yawner.

If there is no such central repository, what is the actual foundation for making the statement “We’re the first U.S.-based company committing to the ISO Anti-Bribery Management Standard”?

If there is none, is this a form of puffery or a qualitatively material statement to the marketplace?

Scrutiny Alerts and Updates

Royal Dutch Shell / Eni

As highlighted here by Bloomberg:

“Nigeria’s anti-graft agency filed new charges against Royal Dutch Shell and Eni SpA alleging the companies “corruptly” paid $801 million in 2011 when acquiring an offshore oil field.

The European oil majors gave that sum to former Nigerian oil minister Dan Etete, his Malabu Oil & Gas Ltd. and others in relation to the purchase of Oil Prospecting License 245 and “thereby committed an offence,” according to documents from the Federal High Court in Abuja.”

As highlighted in this prior post, in 2010 Royal Dutch Shell and a related entity resolved a $48 million DOJ and SEC FCPA enforcement action concerning conduct in Nigeria.

As highlighted in this prior post, in 2010 Eni and a related entity resolved a $365 million DOJ and SEC FCPA enforcement action concerning conduct in Nigeria.

Samsung Electronics

As has been widely reported, Lee Jae-yong, the vice chairman of Samsung Electronics was recently charged with bribery in South Korea. As reported in the Wall Street Journal.

In a 99-page report …, special prosecutor Park Young-soo alleged that Mr. Lee and four other Samsung Group executives asked for a broader series of favors from President Park Geun-hye and her confidante than previously disclosed. Those actions, prosecutors said, were intended to smooth Mr. Lee’s transition to power atop Samsung, as well as secure the finances to pay an inheritance-tax bill that could total billions of dollars when his incapacitated father, Samsung Chairman Lee Kun-hee, dies.

To achieve those goals, prosecutors said, Samsung engaged in a sophisticated web of corporate shuffling, including publicly listing one Samsung affiliate. It also paid millions of dollars to entities allegedly controlled by Choi Soon-sil, the president’s friend, in exchange for government backing of a contentious 2015 merger between two Samsung affiliates, and other succession-planning moves.”

To say that Samsung Electronic’s stock trading is a bit complex would be an understatement (see here). It does appear however the company shares are traded “over-the-counter” in the U.S. (see here) a designation the SEC has previously used to assert FCPA jurisdiction.

Valdez Sentenced

This December 2016 post highlighted the DOJ’s criminal charges and plea agreements in an FCPA enforcement action against various individuals (Daniel Perez, Kamta Ramnarine, Victor Valdez, and Douglas Ray) associated with Hunt Pan Am Airlines.

Last month, Daniel Perez and Kamta Ramnarine were both sentenced to three years probation.

Recently Valdez was sentenced to 1 year and a day in federal prison, 2 years of supervised release, and ordered to pay approximately $91,000 in restitution to the following payees: Aerolineas Maros, Aerovics, N501RS Aircraft Inc. and Aero McFly.

Sentencing documents were filed under seal.

For the Reading Stack

An informative read from Bass, Berry & Sims regarding recent FCPA enforcement.

Bass Berry is hosting the FCPA Institute – Nashville on May 4-5.

FCPA Institute - Zoom (Oct. 10-12, 2023)

Elevate your FCPA knowledge and practical skills. Nine hours of integrated and cohesive instruction led by Professor Koehler (an FCPA expert with teaching experience). Learn more, spend less. Professional credential available.

Learn More and Register

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