Scrutiny alerts and updates, survey says, and for the reading stack. It’s all here in the Friday roundup.
Scrutiny Alerts and Updates
As highlighted in this prior post, Credit Suisse has been under FCPA scrutiny for approximately four years for its hiring practices.
Recently the company disclosed:
“Credit Suisse has been responding to requests from certain governmental and regulatory authorities, including the DOJ and the US Securities and Exchange Commission (SEC), regarding Credit Suisse’s hiring practices in the Asia Pacific region and, in particular, whether Credit Suisse hired referrals from government agencies and other state-owned entities in exchange for investment banking business and/or regulatory approvals, in potential violation of the US Foreign Corrupt Practices Act and related civil statutes. Credit Suisse is cooperating with the authorities on this matter.”
As reported here:
“Airbus agreed to settle a corruption investigation in Germany by paying an €81.25 million ($99 million) fine to authorities, prosecutors in Munich announced … The settlement sum breaks down into a €250,000 administrative fine as well as an €81 million “disgorgement,” which is broadly defined as the recovery of ill-gotten gains. The German investigation, which first opened in 2012, was looking into whether Airbus issued bribes in order to secure a €2 billion contract to sell Eurofighter combat jets to Austria in 2003. Airbus said in its own statement that it had accepted the fine and that the German investigation “has been terminated.” Prosecutors in Munich noted in their statement that the investigation did not find evidence of bribery. However, Airbus was unable to account for over €100 million in payments made to two shell companies in Great Britain. “The funds, which bypassed internal controls and were largely without provable return, were used for unclear purposes,” the statement said. “It cannot be determined based on the cash flows, which purposes the payments ultimately served.” German authorities, therefore, concluded that Airbus failed in its supervisory duty by allowing its former management to make the payments.”
As highlighted in this prior post, in May 2016 the Netherlands-based company with shares listed on the NYSE disclosed:
“[I]t has been reported that the United States Department of Justice (the “DOJ”) is conducting an investigation of Unaoil, a Monaco based company, related to activities Unaoil may have engaged in related to international projects involving several global companies, including Core Lab. The DOJ has contacted us in connection with that investigation, and we are cooperating with its requests for information.”
The company recently disclosed
“In a letter dated October 4, 2017, the Company was informed by the U.S. Department of Justice, that in regard to the investigation by the Department of Justice, Criminal Division, Fraud Section (the “Department”) into the Company concerning possible violations of the Foreign Corrupt Practices Act related to the Company’s interactions with Unaoil (which we first disclosed in our Q2 2016 quarterly report on Form 10-Q), the Department has closed its inquiry without taking any action against the Company. Specifically, the Department stated that “based upon the information known to the Department at this time, it has closed its inquiry into the Company in connection with this matter. The Department appreciates the Company’s cooperation during the investigation”.
In a letter dated February 5, 2018, the Company was informed by the SEC, that they have concluded their investigation as to the Company’s connection with Unaoil and they do not intend to recommend an enforcement action by the Commission against the Company.”
I am always a bit skeptical of survey data where the results seem to dovetail nicely with the product offering of the company publishing the survey. Nevertheless Kroll’s Global Fraud & Risk Report finds:
“[I]ncidence of bribery and corruption had increased from 15 percent in 2016 to 21 percent this year, moving from 10th place to 5th place on the list of types of fraud experienced. Looking back further to the 2015 survey results, we can see that reports of bribery and corruption have almost doubled over the last two years, increasing from 11 percent.”
For the Reading Stack
The Wall Street Journal goes in-depth here regarding the upcoming trial in Italy of former executives of Eni and Royal Dutch Shell for alleged bribery in Nigeria. As highlighted in the article, the issue is whether the $1.3 billion the companies paid for a license to an oil field was “mostly a bribe.” According to the article, “in the U.S. the FBI traced the flow of dollars from the deal, millions of which made it to the U.S.”
As highlighted in this prior post, Royal Dutch Shell resolved an FCPA enforcement action concerning conduct in Nigeria in 2010.
As highlighted in this prior post, Snamprogetti / ENI resolved an FCPA enforcement action concerning conduct in Nigeria in 2010.
A decent article (there are less than three factual errors relevant to the FCPA) here from CNN regarding the FCPA enforcement action involving Chi Ping Patrick Ho for alleged bribery in Africa (see here for the prior post).
FCPA Institute - Zoom (Oct. 27-29)
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.