Compliance Insider

Issue 13 > Compliance Alerts

Reputational damage can cost sponsors

Coca-Cola has become the first major sponsor of FIFA to question the governing body’s conduct surrounding the release of the report into the 2018 and 2022 World Cup bidding processes. The company’s sponsorship deal is worth over US$470 million, and the soft drinks manufacturer is concerned about recent events moving the spotlight away from the World Cup’s mission.

Issue 13 > Compliance Alerts

E-cigarettes could damage your data security health

E-cigarettes may be carrying malware, and could infect computers when they are plugged in to charge. Many e-cigarettes attach to computers for power via USB ports or special cables, but this can leave the computers vulnerable to viruses if the e-cigarette is from an untrustworthy supplier.

Issue 13 > Compliance Alerts

New code of conduct for highway police

The United States federal High Intensity Drug Trafficking Areas (HIDTA) programme has issued a new voluntary code of conduct for local and state police in an attempt to address a rise in dubious seizures of motorists’ cash and property. Senior officials at the federal drug enforcement body say they want to remind police officers of the need to honour Constitutional values and the civil rights of motorists.

Issue 13 > Compliance Alerts

Goldman to reveal LIA profits

Goldman Sachs will reveal the profit it made on nine financial trades it entered into with the Libyan Investment Authority (LIA) in early 2008, as part of the LIA’s US$1 billion lawsuit against it. The United States investment bank will also search the documents of current and former staff in a pre-trial disclosure exercise.

Issue 13 > Compliance Alerts

Mexican First Lady to sell mansion in name of honour

Mexico’s First Lady Angelica Rivera has decided to sell her mansion following accusations that called her ‘honour’ into question and sparked allegations of corruption. The private residence was built by a construction firm that won lucrative public contracts when Rivera’s husband, President Enrique Pena Nieto, was governor of the State of Mexico.

Issue 13 > Compliance Alerts

Compliance officer fired for misleading regulators

New York State regulators have ordered Bank of Tokyo-Mitsubishi (BTMU) to pay US$315 million, sack a compliance officer, and ban two other employees from working with any New York banks. The New York State Department of Financial Services (DFS) fined BTMU US$250 million last year for violating sanctions with Iran, Sudan and Myanmar, but BTMU was handed the additional penalty this week for misleading regulators.

Issue 13 > Compliance Alerts

Defence contractors sanctioned for FCPA violations and GTE failings

The United States Securities and Exchange Commission (SEC) has sanctioned two United States defence contractors for violating the Foreign Corrupt Practices Act (FCPA) by taking Saudi Arabian government officials on a ‘world tour’ to curry business from them. The two employees also falsified records in an attempt to hide their misconduct.

Issue 13 > Compliance Alerts

PetroChina supplier charged with bribery

PetroChina supplier Wison Engineering Services and its chairman Hua Bangsong have been charged with bribery following an investigation by the Chinese government. The engineering company said that the Chinese authorities seized records and temporarily froze accounts in September, following which it could no longer contact Hua. It has since been in touch with him through his lawyer however.

Issue 13 > Compliance Alerts

Rogue government officials show corruption still rife in China

Investigators in China were left puzzled as to how a low-level government official amassed so much wealth when they found US$19.6 million in cash in his home, 37 kilogrammes of gold, and ownership documents for 68 homes. Ma Chaoqun was former manager of a government company that supplied water for seaside resort Beidaihe in Hebei province, where party officials take secretive summer breaks, according to Sinosphere.

Issue 13 > Compliance Alerts

China introduces new regulations for drug trials

China has introduced a series of regulations to increase monitoring on drug trials, and reduce attempts to use expenses as an excuse to pay kickbacks for doctors peddling specific drugs. Hospitals in China will now be required to establish a set of standardised rules for the procedures involved in clinical studies, and to centralise the financing of the studies.

Issue 13 > Compliance Alerts

Apple’s iPod antitrust trial reflects enforcement zeal

An antitrust case filed against Apple almost a decade ago for downloading restrictions on iTunes has finally gone to trial. The class action’s journey to court is indicative of a worldwide trend of law enforcers cracking down on monopolies and cartels. Until a year ago, iTunes was the only online store from which an iPod owner could download music. Despite Apple changing its policy, damages against the technology company could exceed US$1 billion if antitrust violations are proven.

Issue 13 > Spotlights

Investigations: getting on the front foot

Traditionally, managing complex investigations in a public setting required the issuance of defensive holding statements in order to buy time to launch enquiries. Liability was not discussed. However, in the age of the short news cycle, and with the use of social media, companies are now facing increased expectations on responsiveness across a number of different areas.

Issue 13 > Research

Statistics on compliance: gifts and entertainment

Companies face an array of challenges when it comes to giving and receiving gifts and entertainment, including, among other things, employees accepting or giving inappropriate gifts and entertainment, inconsistency of policies across multiple regions, policies not being followed or enforced, and working in high-risk countries where expectations and laws are loose. Our recent Gifts and Entertainment Survey provides a useful snapshot of the extent to which compliance departments have installed and use gifts and entertainment approval processes and tracking tools, and how much they actively train on gifts and entertainment. It also reveals the difference between the amount of gifts and entertainment given versus received.

Issue 13 > Handbooks

How a good compliance programme saves money

Over the past decade, United States Foreign Corrupt Practices Act (FCPA) enforcement actions have been more aggressive and corporate fines have been getting progressively steeper. In 2013, the total criminal and civil fines imposed on corporations under the FCPA totalled over US$720 million – enough to ring alarms in compliance divisions for companies all over the world. With the introduction of the United Kingdom Bribery Act in 2011, anti-corruption enforcements globally are expected to significantly increase over the next decade.

Issue 13 > Country Focus

Germany’s anti-corruption and bribery regulation

It is difficult to overestimate the impact of the Siemens case on the implementation of compliance standards in Germany. But while a steady increase in enforcement in recent years has led to a significant number of prosecutions and sanctions, companies in Germany are still not obligated to meet any specific requirements. Continued scandals suggest further reforms are needed.

Issue 13 > World Watch

The United Kingdom Bribery Act, three years on

The first of July marked three years since the commencement of the United Kingdom Bribery Act. The Bribery Act 2010 was pushed through parliament to replace the former corruption legislation, the Prevention of Corruption Act 1998, and is said to be the ‘toughest anti-corruption legislation in the world’, covering both domestic and international issues.

Issue 12 > Compliance Alerts

South African President investigated for home renovations

South African President Jacob Zuma is being investigated by his nation’s authorities over allegations of corruption. The accusations stem from taxpayer-funded upgrades to the President’s home, including a swimming pool and amphitheatre that Zuma claimed were for security purposes. The publically-funded renovations to Zuma’s home in the eastern province of KwaZulu-Natal in the town of Nkandla cost US$23 million. The corruption charges were filed by Democratic Alliance opposition leader Mmusi Maimane in March.

Issue 12 > Compliance Alerts

China to host anti-corruption info sharing network

Leaders of the 21 members of the Asia Pacific Economic Cooperation (Apec) gathering in Beijing this week are expected to back a deal to establish a network to share information on corruption. The proposal, which was initiated by China and supported by the United States, aims to deny safe haven to anyone engaged in corruption. It will also establish measures and systems to protect whistleblowers.