Compliance Insider

Issue 11 > Compliance Alerts

Singapore antitrust chief warns GLCs against complacency

In a proactive attempt to ensure that Singapore enjoys a level playing field for all competitors, regardless of ownership, the city-state’s antitrust head has said he will take action against any government-linked corporation (GLC) that wishes to preserve its dominant position in an anti-competitive way.

Issue 11 > Compliance Alerts

China Southern rebrands tickets to lure back government officials

Chinese state-owned airline China Southern Airlines is rebranding its first class cabin to business class in an attempt to attract government officials who have been banned from flying first class. The initiative follows a recent profit warning by the airline, and comes amid similar moves in other industries as companies seek to avoid criticism of excess in an age of austerity.

Issue 11 > Compliance Alerts

Guilty pleas for importing dangerous and counterfeit toys

Two residents of New York have pleaded guilty to importing and selling counterfeit toys from China in the United States. Chenglan Hu and Hua Fie Zhang imported toys that infringe on United States copyright laws and trademarks as their products depicted popular children’s characters including Power Rangers, Mickey Mouse and those in High School Musical and Toy Story.

Issue 11 > Compliance Alerts

India follows China in fining carmakers for antitrust violations

India’s antitrust regulator has fined 14 carmakers for preventing competition in the spare parts market. Fines that accumulated to US$422 million have been inflicted on a number of companies, including Honda and Ford, because they failed to comply with market norms in the spare parts and after-sale service markets.

Issue 11 > Compliance Alerts

INTERVIEW: Bartosz Makowicz, European University Viadrina

Bartosz Makowicz is a professor and doctor at the Center of Interdisciplinary Compliance Research at the European University Viadrina in Frankfurt (Oder) and academic director of the Compliance Academy Münster. As head of the German delegation of the project committee that drafted the new international standard for compliance programmes (ISO 19600), he tells Compliance Insider® why they opted for a guidance standard rather than a requirements standard.

Issue 11 > Compliance Alerts

Telenor finds child labour in Myanmar suppliers

Norwegian company Telenor has found child labour at suppliers helping to build Myanmar’s first national mobile phone network. Telenor said it found five cases of child labourers between the ages of 12 and 14, and an additional 19 confirmed or suspected cases of children between the ages of 15 and 18.

Issue 11 > Compliance Alerts

Myanmar firms encouraged off sanctions blacklist

Myanmar companies that are taking steps to sever historical ties with the country’s former military junta are being encouraged by the United States to apply to be delisted from its sanctions blacklist. The effort, which is part of a broader initiative with the business community in Myanmar, follows a recent visit to the country by Secretary of State John Kerry, during which he and his delegation stayed in a hotel owned by a businessman on the blacklist.

Issue 11 > Compliance Alerts

WhatsApp helping Delhi police fight corruption

The vigilance department of the New Delhi police force is investigating five policemen for alleged corruption after receiving many complaints via the instant messaging (IM) service WhatsApp. The complaints were made via a new helpline number, launched on 6 August, and included 3,700 WhatsApp messages and 622 calls.

Issue 11 > Compliance Alerts

China to issue Audi with largest ever AML fine

Media sources in China claim that German luxury carmaker Audi will receive a CNY1.8 billion (US$293 million) penalty for engaging in monopolistic practices. If confirmed this would represent the largest such penalty by some considerable distance. The fine amount equates to just under one percent of Audi’s total sales in China over the last year.

Issue 11 > Compliance Alerts

Guilty plea from Navy's Military Sealift Command contractor

Former contractor for the United States' Navy Military Sealift Command has pleaded guilty to accepting bribes and conspiring to commit bribery. Scott B Miserendino was a contractor at the leading provider of transportation for the United States Navy, Military Sealift Command. In this role, he worked with afloat programs manager Kenny E toy.

Issue 11 > Compliance Alerts

Former Calpers board member charged with bribery

A former board member of the United States largest public pension fund Calpers, has been charged with bribing an official from the California public pension fund and faking documents to obtain millions in investment fees. It was announced by United States Attorney Melinda Haag that Alfred J Villalobos engaged in conspiracy to commit corruption including mail and wire fraud, conceal materials and defraud the United States.

Issue 11 > Compliance Alerts

Co-op board's grasp of risk could lead to governance restructure

A report stating the Co-operative Bank's executives have little grasp of risk and a tendency to ignore problems could lead to governance reforms at the institution. Sir Christopher Kelly wrote the report following the near collapse of the bank in April, saying it was run by unqualified executives. As a result, the Co-operative Group has outlined reforms that will see it eject the majority of lay members from its board and replace them with experienced and independent directors.

Issue 11 > Compliance Alerts

LinkedIn praised for compliance cooperation following settlement

LinkedIn has paid nearly US$6 million in wages and damages to 359 former and current employees. The payment follows a United States Labor Department investigation into unpaid overtime hours worked between February 2012 and February 2014 at the professional social networking site.

Issue 11 > Compliance Alerts

Indian bank chief arrested for bribery

The head of a state owned bank in India has been arrested following the first major anti-corruption raids of Prime Ministers Narendra Modi's new government. The chairman and managing director of Syndicate Bank, SK Jain, was arrested and accused of taking US$82,000 in bribes. The bribes were in exchange for increasing the credit limits of two companies, both of which are being probed in a scandal involving the allocation of coal mining blocks under the previous government.

Issue 11 > Compliance Alerts

GM faces lawsuit following corporate failure

General Motors has been hit with a lawsuit that has been brought on behalf of 658 people allegedly injured or killed in cars with faulty ignition switches. Dozens of cases against the company have been consolidated in the suit, which has been filed in a Manhattan federal court.

Issue 11 > Compliance Alerts

Symantec whistleblower joined by DOJ

The United States Department of Justice (DOJ) has joined a whistleblower lawsuit that accuses Symantec of overcharging the federal government along with some states by tens of millions of US dollars.

Issue 11 > Compliance Alerts

Public servant accepted bribes for contracts

Two Australian public servants based in Victoria are being investigated for accepting bribes in exchange for awarding US$25 million in contracts. Barry Wells and Albert Ooi allegedly granted contracts in exchange for cash as well as giving Public Transport Contracts to companies they owned.

Issue 11 > Compliance Alerts

EU presses ahead with Russian sanctions in wake of MH17

European Union ambassadors in Brussels are pressing ahead with plans to place sanctions on a range of Russian economic sectors following the shooting down of Malaysia Airlines Flight MH17. The disaster, which saw more than 200 EU citizens lose their lives, appears to have hardened the position of EU nations in isolating Moscow for its alleged support of rebel groups in eastern Ukraine.

Issue 11 > Compliance Alerts

A third guilty plea from BizJet

A former president and chief executive of a United States unit of Lufthansa Group called BizJet, pleaded guilty to United States foreign bribery charges.

Issue 11 > Compliance Alerts

Indian healthcare exposed by TV

A television programme in India has prompted investigations into the healthcare system after it revealed doctors might be taking kickbacks for referring patients for medical tests. Hindi news channel New Nation TV showed laboratories offering commissions as high as 50% to doctors who referred patients to their diagnostic centres.

Issue 11 > Compliance Alerts

Wall Street systematically silences whistleblowers

Companies on Wall Street are systematically undermining the Securities and Exchange Commission (SEC) by silencing whistleblowers. As the SEC seeks to strengthen the Dodd Frank whistleblowing provisions, companies are intentionally doing the opposite.

Issue 11 > Compliance Alerts

British companies ignorant of supply chain sources

British companies have poor knowledge of their supply chains and are not set to change their ways despite previous scandals and slavery risks. The Chartered Institute of Purchasing and Supply (CIPS) conducted a survey to which almost three quarters of supply chain professionals admitted to having zero visibility of their supply chain.

Issue 11 > Compliance Alerts

Guilty pleas from executives of Seafood company

Two executives of a New York-based fish company have pleaded guilty to fraud, falsifying records and violation of the Lacey Act. The company has also pleaded guilty to the same charges.

Issue 11 > Compliance Alerts

Swiss bank probed for wooing Gadhafi

United States and United Kingdom authorities have opened a probe into a Swiss bank amid suspicions that it bribed Gadhafi's government in a variety of ways. Tradition Finance Services of Switzerland is accused of employing relatives of Gadhafi's government, paying for luxury travel expenses and funding days by the poolside and nights partying, all in an attempt to obtain business from the Libyan government.

Issue 11 > Compliance Alerts

TV anchor arrests as China's crackdown continues

A television anchor for China's state run China Central Television (CCTV) has been detained as the Government's anti-corruption campaign widens. The host of financial programmes on CCTV Rui Chenggang was arrested prosecutors on Friday evening. CCTV's vice-director for financial news Li Yong was also detained.

Issue 11 > Compliance Alerts

DNA probes German company for bribing Romanian officials

The National Anti-corruption Directorate has opened a probe against German company EADS Deutschland GmbH as large amounts of money allegedly were given as bribes in exchange for a contract worth 534 million Euros.

Issue 11 > Spotlights

Moving compliance to an international standard: The move to ISO 19600

All companies have obligations placed upon them with which they should comply. These obligations can come from a number of directions – whether imposed by governments in the locations in which they operate, regulators for their industry, or obligations that they choose to measure themselves against. When dealing with this multitude of obligations, it is very easy to get lost in the detail of the specific requirements or to shift your focus to whatever the hottest topic is with management or generally in the industry.

Issue 11 > Due Diligence Handbook

Resources required for a third party compliance programme

When The Red Flag Group is assisting companies to roll out third party compliance programmes, the firm is often asked which resources will be required to oversee and maintain those programmes. The answer to this question is quite complex and depends on the type of company and the way it is structured. It also depends on the type of due diligence each company is conducting and the volume of the installed due diligence base. There are, however, some key commonalities between all companies that build and roll out their programmes, which can provide a rough guide on the number of resources required.

Issue 11 > Compliance Alerts

Ten recent cases and developments that compliance officers should be aware of

This section analyses the latest high-profile cases and enforcement of new laws and regulations, and guides readers on the steps they should take to protect their organisations from any risks.

Issue 11 > Country Focus

Hong Kong prepares for competition

Momentum is gathering for Hong Kong’s newly-established Competition Commission with the appointments of new executive staff. One of these new staff, Senior Executive Director Rose Webb, spoke with The Red Flag Group’s senior consultant Mary Shirley about the Competition Commission’s initiatives.

Issue 10 > Compliance Alerts

EU adds names to Russian sanctions list as US senators threaten further sanctions

The European Union has imposed asset freezes and travel bans on an additional 11 individuals for participating in the pro-Russian insurgency in eastern Ukraine. This follows similar EU sanctions imposed on 61 people and two companies for participating in the armed rebellion against the Ukrainian Government or Russia’s occupation and annexation of the Crimean Peninsula.

Issue 10 > Compliance Alerts

US Navy bribery case secures another guilty plea

A retired United States navy official has pleaded guilty to conspiracy charges connected to a wider corruption investigation of a Singapore-based defence contractor. Glenn Defense Marine Asia's (GDMA) former manager of operations in Japan, Edmond Aruffo, pleaded guilty to conspiring with others in 2009 and 2010 to submit false invoices that cost the United States Navy US$20 million.

Issue 10 > Compliance Alerts

China corruption purge nets most powerful tiger to date

China’s ruling Communist Party has expelled former military leader General Xu Caihou, and accused him of handing out promotions in exchange for bribes. The Party’s Central Committee made the announcement earlier this week following a meeting of the politburo, with the case now referred to prosecutors.

Issue 10 > Compliance Alerts

Myanmar targets all forms of corruption with law amendment

Myanmar’s Pyithu Hluttaw, or House of Representatives, has amended the country’s anti-corruption legislation in an attempt to tackle the escalating problem of corruption. Sponsored by Khin Maung Shwe, the lower house Member of Parliament for Tamu constituency, the amendment saw a change in the wording from ‘bribery’ to ‘corruption’.

Issue 10 > Compliance Alerts

SFO investigation concludes with Innospec convictions

A jury in London has found two former executives of Innospec Specialty Chemicals guilty of conspiracy to corrupt for giving or agreeing to give bribes to Indonesian public officials for government contracts to supply a chemical the company produces. The convictions bring to an end a six-year investigation by the United Kingdom’s Serious Fraud Office (SFO) into the specialty chemical company formerly known as Octel Corporation and Associated Octel Company.

Issue 10 > Compliance Alerts

Israeli port probe widens

The police investigation into bribery and corruption at Ashdod Port in Israel has widened with the arrest and detention of 15 port executives, including union chairman Alon Hassan, and affiliated private companies. The arrests follow the recent questioning of former Israel Defence Forces (IDF) chief and former chairman of oil and gas company Shemen Oil & Gas Resources Gabi Ashkenazi.

Issue 10 > Compliance Alerts

Deutsche Bank investigated for hiring policy

Deutsche Bank has confirmed it is being investigated for its China-related hiring practices in documents relating to its recent US$9.19 billion rights offering. In doing so, it becomes the latest financial institution to be subject to the probe, by unnamed regulators, into whether the children of government officials were hired in return for favours.

Issue 10 > Compliance Alerts

Compliance defeating warlords in the Congo

Warlords in the Democratic Republic of Congo (DRC) have lost their grip on most of the country’s mines and lucrative conflict minerals. That was the finding of an investigation by anti-genocide campaign group the Enough Project, which concluded that compliance with a 2010 US law – brought in under the Dodd-Frank Financial Reform Act – was partly responsible.