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Friday Roundup

Sentenced, convicted, and ridiculous. It’s all here in the Friday roundup.

Sentenced

As highlighted in this prior post [1], in 2019 the DOJ criminally charged Armengol Alfonso Cevallas Diaz (an Ecuadorian citizen) in connection with a bribery scheme involving PetroEcuador officials.

Earlier this week, the DOJ announced [2] that Cevallas was sentenced to 35 months in prison for FCPA and money laundering charges. As stated in the DOJ release:

“Cevallos is the latest individual to be sentenced in the Justice Department’s ongoing investigation into bribery and money laundering involving PetroEcuador. The individuals prosecuted include former PetroEcuador officials who received and concealed the bribe payments, businessmen and contractors who paid the bribes to obtain contracts from PetroEcuador, and intermediaries who enabled and facilitated the bribery through the use of U.S. and offshore companies and bank accounts.”

Convicted

As highlighted here [3], Beny Steinmetz was recently convicted in a Swiss court of bribing public officials in Guinea in order to gain control of the country’s iron ore deposits. In addition to a five-year jai sentence, the court also ordered him to pay compensation of 50m Swiss francs (£41m; $56m) to the state of Geneva.

As stated in the article:

“Steinmetz, who has always denied bribery, condemned the verdict as a “big injustice”. He plans to challenge the verdict and will not go to jail pending the appeal, his lawyer said. The Simandou mines, in south-eastern Guinea, are estimated to be the most valuable untapped iron ore deposits in the world. The case dates back to 2006 when, according to the prosecution, the businessman, working for a company called Beny Steinmetz Resources Group (BSGR), paid bribes so that BSGR could acquire mining rights in Simandou. These had originally been held by mining giant Rio Tinto.

The trial took place in Switzerland because Mr Steinmetz lived in Geneva until 2016, and ran businesses there. Some of the bribes, the prosecution said, were paid through Swiss banks.

Steinmetz now lives in Israel, but travelled to Geneva to appear in court in person, hiring one of Geneva’s most high-profile lawyers, Marc Bonnant, to defend him.

The court found that Steinmetz, 64, and his two co-defendants had paid $8,5m (£6,2m) in bribes to a wife of Guinea’s late president Lansana Conté, who died in 2008. They were found guilty of setting up elaborate schemes to hide the link between BSGR and Conté’s fourth wife, Mamadie Touré. She had been scheduled to appear in court herself but did not turn up. She now lives in the United States.

Defence lawyer Mr Bonnant told the trial that Steinmetz had never “paid a cent” to Ms Touré, and that anyway she was never actually legally married to President Conté, and therefore under Swiss law did not qualify as a bribable public official. What’s more, Mr Bonnant said, some of the alleged bribes were paid after President Conté’s death, which made no sense at all: “How do you bribe a ghost?” he asked the court.”

Ridiculous

In this article [4]about Transparency International’s recent Corruption Perception Index ratings (see here [5] for the post for how TI truly embarrassed itself and lost credibility with this year’s report), a compliance professional states:

“Almost every regulator now requires a risk-based compliance assessment. For any organization that is multinational, the starting point for this exercise is looking at the latest CPI index for the countries it is doing business in.”

This is a ridiculous statement.

Yes, conducting a risk assessment is a good idea, but it is not a requirement. More broadly though, the CPI Index should NOT be a starting point for a risk assessment. The starting point should be – given the specific company at issue and its products and services and ways of doing business – what points of contact does the company have with alleged “foreign officials.”

[6]