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Failure to prevent bribery catches up with Sweett, ICBC Standard Bank

An independent provider of construction and infrastructure management services has admitted that it failed to prevent staff from offering bribes in the Middle East.

The Sweett Group operates services in the Asia Pacific, Europe and the United States.

According to the UK Serious Fraud Office (SFO), the Sweett Group acknowledges that its employees offered to award an American architecture firm a USD$100 million construction contract for a hospital in Morocco if the architects agreed to bribe an Arab Emirates official.

The company in effect admitted to breaching Section 7 of the UK Bribery Act which recognises the failure of commercial organisations to prevent bribery as an offence.

The same offence was recently used for the first time by any UK prosecutor in a case involving allegations against ICBC Standard Bank of overseas bribery.

On Monday 1 December, ICBC Standard Bank finally settled its case in the UK by agreeing to pay USD$33 million. Earlier this year, it already agreed to pay $4.2 million to resolve similar charges in the United States by the Securities & Exchange Commission (SEC) in relation to the same case.

These cases highlight how widely the UK Bribery Act’s enforcement extends around the world, and how severe the penalties are for companies that fail to prevent bribery on their watch.

The Sweett Group case in particular sounds an alarm for the engineering and construction industry: unless you adopt the necessary due diligence measures, you remain exposed to a full range of bribery and third party risks.

Source: FCPA Blog

Talk to GRC Solutions about our Anti-Bribery and Third Party Risk courses, as well as our broader Salt Compliance training library.

Macau real estate billionaire latest charged in UN bribery case

Billionaire real estate developer Ng Lap Seng is the latest person to have been indicted in the US for involvement in a scheme to bribe former president of the United Nations General Assembly, John Ashe.

Three other people have been named in the indictment, including former chief executive of the Global Sustainability Foundation and Australia-China social queen, Shiwei Yan, and Francis Lorenzo, a suspended deputy Dominican Republic ambassador to the UN.

According to prosecutors, Lorenzo was one of several intermediaries used by Ng to pay Ashe more than USD$500,000. The bribes were intended to elicit Ashe’s help in acquiring UN support to build a UN conference centre in Macau, where Ng is based.

Ashe is alleged to have taken more than USD$800,000 in bribes from other Chinese businessmen to support business deals in Antigua. Although covered by diplomatic immunity, he faces tax charges for under-reporting his income by more than USD$1.2 million.

Ng also faces money laundering charges after making false statements to custom officials about why they brought USD$4.5 million in cash from China into the US.

US authorities deemed Ng to be a flight risk due to his financial resources, which include USD$1 billion in real estate holdings. He has since been released on a USD$50 million bail and currently lives under 24-hour house arrest in his apartment in Manhattan, pending trial.

The US Foreign Corrupt Practices Act (FCPA) has a wide extraterritorial reach. Under the FCPA, individuals may be subject to fines of up to USD$250,000 per act of corruption and/or five years’ imprisonment.

GRC Solutions is the leading provider of online compliance training on Anti-Bribery and Corruption and Anti-Money Laundering. Contact us today for more information about out off-the-shelf and bespoke options.

Sources: Sydney Morning Herald, Yahoo! News, CNN

Hitachi hit with USD$19 million fine for bribery

Tokyo conglomerate Hitachi was forced to pay USD$19 million in penalties, following a Securities and Exchange Commission (SEC) investigation which revealed the company had inaccurately recorded improper payments to South Africa’s ruling political party, the African National Congress (ANC).

Hitachi knowingly sold a 25% stake in one of its South African subsidiaries to a front company for the ANC, which allowed the pair to share profits from any contracts the subsidiary secured, the SEC alleged.

The subsidiary was ultimately awarded two contracts to build a pair of multi-billion dollar power stations in South Africa. The ANC and its front company turned an immediate profit of approximately USD $5 million in ‘dividends’, based on the profits from the contracts.

“Hitachi’s lax internal control environment enabled its subsidiary to pay millions of dollars to a politically-connected front company for the ANC to win contracts with the South African government,” SEC Enforcement Division Director Andrew Ceresney is quoted as saying in a SEC press release.

“Hitachi then unlawfully mischaracterized those payments in its books and records as consulting fees and other legitimate payments.”

A separate, confidential arrangement also saw the ANC front company receive a one-off USD$1 million ‘success fee’ that was later misleadingly marked as a “consulting fee”.

Accordingly, the SEC found Hitachi had breached provisions of Securities Exchange Act, relating to proper book-keeping and record-keeping obligations.

This case demonstrates the expansive extraterritorial reach and sizeable fines the SEC possesses, in relation to corruption and bribery offences.

GRC Solutions provides off-the-shelf and customised training in Anti-Bribery and Corruption across Australia and other jurisdictions.

Contact us today for more information.

Source: Securities and Exchange Commission.

 

Former Singapore resort director charged with corruption

The inside of a darkly lite casino, with an ominous statue in the foreground

An ex-director of one of Singapore’s major integrated resorts faces up to five years’ jail and/or a fine of SGD$100,000 for seven charges of corruption.

Soh Yew Meng was allegedly paid at least SGD$317,000 in bribes in the course of his position as director of Resorts World Sentosa (RWS). The bribes were said to have been paid as consideration for “furthering [certain contractors’] business interests” in RWS projects, including restaurants and cafes located in the resort.

The bulk of the bribes comes from two SGD$150,000 payments made by the managing director of a furniture and construction company to Soh between 2013 and 2014 to “further the business interests” of the company. Other contractors accused of making corrupt payments to Soh include a lighting designer, a building company and a security systems business.

The charges against Soh also include three accounts of attempting to obtain corrupt benefits of an unspecified amount from a contractor and an individual.

Tan Siow Hui, a freelance quantity surveyor working with Soh, has been prosecuted for conspiring with him to receive and attempt to obtain bribes from contractors.

The Corrupt Practices Investigation Bureau (CPIB) has identified a number of locations where the bribes were paid, including car parks and a local canteen. It emphasises that it will not hesitate to act against parties involved in corrupt practices: “Procurement systems and processes are put in place to ensure fair competition from all bidding vendors. But when individuals circumvent these processes and seek benefit for themselves, a level playing field becomes impossible to achieve.”

Last year, Singapore fell two places in the Corruption Perceptions Index ranking of least corrupt countries in the world. It currently sits at 7th place.

Are you on top of your international anti-bribery and corruption obligations? GRC Solutions produces off-the-shelf and custom compliance training for a number of jurisdictions, including Australia, New Zealand and Singapore. Contact us today for more information.

Sources: The Straits Times, Today Online, Channel NewsAsia

Sony investigated for Chinese bribery allegation

According to documents leaked during its recent hacking, Sony Pictures Entertainment is under investigation for allegedly bribing a Chinese official to secure distribution of its 2010 film, Resident Evil: Afterlife, in China.

The Wall Street Journal reported that the United States Securities and Exchange Commission (SEC) subpoenaed Sony in 2013 for allegedly violating a US law that outlaws bribing a foreign government official.
For many years, Sony has allegedly used the Dynamic Marketing Group, a Beijing-based firm, to get around China’s quotas and strict censorship systems, which inevitably hinder film distribution in China. The SEC is now looking into the precise methods employed by DMG to secure distribution of the blockbuster that grossed $296 million worldwide, of which $21.6 million came from China.

Once the subpoena was issued, the SEC stated that an email sent by a Sony employee showed that DMG resorted to using “special influence” to ensure the blockbuster be shown in theatres across China.
The documents revealing the bribery probe were a result of a cyberattack on Sony in November 2014, which also leaked confidential data such as personal information about Sony employees, internal emails between Sony workers and executive salary information.

Contact GRC Solutions today for more information about our Anti-Bribery and Data Protection online compliance training courses.

Source: Wall Street Journal

Department of Justice announces historic USD $772 million fine over FCPA violations

In late 2014, the United States Department of Justice (DOJ) fined Alstom, a French power and transportation titan, USD $772 million for multimillion dollar bribes the company paid to government officials worldwide.

The bribes helped Alstom secure lucrative energy contracts worth billions of dollars in countries including Indonesia, Saudi Arabia, Egypt, the Bahamas and Taiwan.

Alstom admitted to charges brought under the US Foreign Corrupt Practices Act. It confessed to falsifying its books and business records and failing to implement adequate internal controls to monitor and prevent corruption conduct.

In brokering a plea agreement, the Justice Department factored in Alstom’s reluctance to disclose its misconduct, its refusal to cooperate, the breadth of its misconduct, the company’s prior criminal misconduct and its lack of an effective compliance and ethics program. Several senior individuals within the company have also had charges brought against them.

DOJ Attorney General James Cole said the historic fine sent an “unmistakable message to other companies around the world: that this Department of Justice will be relentless in rooting out and punishing corruption to the fullest extent of the law, no matter how sweeping its scale or how daunting its prosecution.”

The substantial penalties and preceding criminal investigation brought by the DOJ demonstrate the broad scope of American anti-bribery and corruption legislation.

Does your organisation comply with corporate misconduct and white collar crime laws? Speak to GRC Solutions today about our Anti-Bribery and Corruption courses.

Source: Compliance Week

First charges under the UK Bribery Act

Britain’s Serious Fraud Office (SFO) has secured its first charges under the UK Bribery Act. The SFO’s criminal investigation revealed Gary West, 52, James Whale 38, and Stuart Stone, 28, of Sustainable AgroEnergy (‘SAE’) masterminded a 23 million pound biofuel investment scam.

The three men falsely and deliberately misled investors between 2011 and 2012 into thinking that SAE owned property in Cambodia. Investors were told Jatropha trees, once considered a promising plant in the quest for oil, were planted on the land and that an insurance policy in place protected the investors from loss in case the crops failed.

David Green, Director of the SFO, was reported as saying, “These three individuals preyed on investors, many of whom were duped into investing life savings and pension funds”.

While Whale was charged and convicted of conspiracy to commit fraud by false representation and fraudulent trading, West and Stone were convicted of bribery offences, in addition to other charges such as conspiracy to furnish false information, making it the first time the SFO secured convictions under UK’s Bribery Act. Specifically, West and Stone were both found guilty of offences of bribing another person and being bribed under the legislation.

London’s Southwark Crown Court sentenced West, Whale and Stone to prison for 13, 9 and 6 years respectively.

The UK Bribery Act is considered one of the world’s toughest laws against bribery and corruption. Individuals can face up to 10 years’ imprisonment and an unlimited fine and have their assets confiscated. The legislation also grants the SFO with extraterritorial jurisdiction that is the power to prosecute any company or individual, even if the alleged bribery took place outside of the UK, provided there is still a sufficient link to the UK.

Contact GRC Solutions today for more information about our anti-bribery and corruption training courses.

Also find out more about our UK Bribery Act training course.

Source: Yahoo News UK and the Serious Fraud Office

Is it time for a different look at mapping the Corruption Perception Index?

This article first appeared in  Richard Bistrong’s Front-Line Anti-Bribery Compliance Blog and is republished with his permission.

Introduction
The following post was written by guest, James Cohen. James is an independent international development consultant based in Ottawa, Canada. He focuses on corruption, human security, and corporate social responsibility. Recent contracts and collaborations include the African Centre for Justice and Peace Studies and the Global Organisation for Parliamentarians Against Corruption. He has experience with organizations such as Transparency International UK and the Geneva Centre for the Democratic Control of Armed Forces.

Maps are powerful visual cues used by many organisations to communicate their research. The most well known data set on corruption is Transparency International’s annual Corruption Perception Index (CPI) and its accompanying map below (Source: Transparency International’s 2014 CPI map).

The CPI map depicts levels of perceived corruption in warm colors, from shades of yellow to red. The lack of any “cool” colors like green or blue signals that no country is entirely free from corruption.

View individual country results here.

The Colors of Corruption

That said, looking at the map gives a quick visual cue that there are safer (yellow) places in the world — predominantly in North America, northern Europe, Japan, and Australia. Then there are the reds and deep reds covering just about all of Africa, most of Asia, and the majority of Latin America. This global visual perpetuates the idea that we in the West are generally good, and those places in red are deeply corrupt. However, a deeper analysis demonstrates that the CPI map both conveys, and unintentionally conceals,  the realities of corruption.

The CPI map does convey petty corruption (e.g. citizens paying bribes to government officials) and large-scale corruption (e.g. politicians stealing state assets). What the map doesn’t show is that large-scale corruption does not stay within national borders.

Most stolen money from corruption leaves the country where the theft occurred. Those funds often move to developed countries, which the CPI displays as low in corruption. For the most part, citizens in those yellow countries don’t experience corruption on a day-to-day basis; rather, corruption there mostly happens behind closed doors and as we have recently seen with respect to many of the recent enforcement actions, those are often Western bank doors.

Looking at the African continent on the CPI map, saturated mostly in shades of red, it loses more money annually through illicit financial flows than it receives in foreign aid. The issue has been raised by the High Level Panel on Illicit Financial Flows from Africa, led by former South African President Thabo Mbeki. The UN-established body estimates that the African continent loses $50 billion annually — roughly twice what’s received in financial aid. A report by a coalition of aid organisations led by Health Poverty Action published a damning report on the perception of Africa as a drain on wealthy countries — when, really, the continent is a net creditor to the world, via these illicit cash flows, to the tune of roughly $60 billion.

In recent years, the dialogue on corruption has corrected itself on this point by putting more emphasis on the burden of illicit financial flows and the issues of anonymous shell companies. The recent G20 meeting in Brisbane, Australia recognised this, after pressure from groups including Transparency International to address issues including money laundering and proceeds from crime. G20 leaders acknowledged that they need to tackle shell companies in their final communiqué. Prior to the meeting, some governments started developing better legislation and policies to deal with their country’s role in addressing global corruption such as the UK and Denmark’s announcements of creating public registries of corporate beneficial ownership information.

Despite these shifts, the annual CPI map came out on December 3, 2014 and, continues to show corruption as something contained within borders. In fairness, Transparency International does a great service in publicising the CPI (full disclosure: I worked for Transparency International’s UK chapter from 2011-2013), and other programs, like tracking foreign corruption legislation in OECD countries; however, most casual observers just see the map and take away the visual message.

A new map on illicit financial flows would be challenging to create, but it would go a long way to complement Transparency International and other advocacy groups which elevate our understanding of corruption. For example, Global Witness’s ‘Great Rip Off’ map project shows locations harboring shell companies and links them to victims of illicit financial flows. The map depicts cases that have been uncovered, calling attention to shell-company-friendly governments and giving an idea of the harm they’ve caused. The map is live and Global Witness continues to add cases as they are discovered.

The Tax Justice Network (TJN) bolsters this work with the Financial Secrecy Index (FSI). The FSI “ranks jurisdictions according to their secrecy and the scale of their activities”.

Other organisations have estimated the losses to developing economies due to illicit financial flows. Global Financial Integrity (GFI) examines macro-level economic trends and trade mis-invoicing in its annual report on illicit financial flows out of emerging economies. With this data, they even produced a ranking of top 25 outflow countries between 2002 and 2011. In its report, GFI also displays average illicit financial flow to GDP ratio.

So, estimating and visually representing illicit financial flows is possible. A new corruption map could build on the work of Global Witness, TJN, and GFI. A next step for a new corruption map would be determining the directions of flows. That kind of map could look something like this:

corruption map

Do we really need another corruption map?

But Global Witness already produces a pretty good map, so why not just use that and build it up? While Global Witness has built its reputation — one of its founding members won a TED prize for her campaign on shell companies — Transparency International is still the best-known name in anti-corruption, cited most often by journalists and politicians, and the CPI is the most well-known anti-corruption resource. Thus, it would be my hope that Transparency International might embrace this concept and to consider this issue in its future mapping programs.

In addition to supporting advocacy efforts the new map can also have practical benefits for the business community. Compliance with anti-corruption legislation is slowly, but progressively getting stricter. TRACE and the Rand Corporation recently produced a new index and map on business bribery risk based on demands and input from the business community. A map on illicit financial flows can alert businesses to banking jurisdictions which government regulators may target and can be a due-dilligence tool as well. Additionally, companies looking to use corporate social responsibility as a brand advantage can use the map to demonstrate they are not contributing to illicit financial flows, but instead supporting local tax revenue and investment.

Making a new map wouldn’t be a dramatic shift for Transparency International; it would actually fall in line with other recent changes. First, the methodology of the CPI was changed in 2012 to address the long-standing issue of comparing the CPI between years. Second, a map focusing on illicit financial flows would bolster the direction Transparency International is taking on since the election of its new chair, José Ugaz. The former prosecutor who took down Peruvian President Alberto Fujimori is leading the organisation from a predominantly advocacy role to a more confrontational ‘name and shame’ tactic in order to fight impunity.

A new map showing illicit financial flows would still face the corruption data challenge of complete accuracy, but it would go a long way in helping bring the discourse on illicit financial flows to the public and it would break the mentality that ‘we’ (in the West) are clean and ‘they’ (in the rest) are corrupt. Instead, it would show the shared challenge of combating corruption and allow deeper analysis into the factors facilitating specific illicit financial flows.

Postscript by Richard Bistrong: After having read James’ work, I went ahead and asked a number of compliance  and risk professionals  for their perspective on this issue. Alison Taylor, Senior Managing Director, Control Risks, responded “I think a map of illicit financial flows would be great, though would be very interested in understanding where the data came from and the methodology used.”  Her colleague, John Bray, Director (Analysis) at Control Risks  shared that “Country ratings serve a purpose – different purposes depending on what goes into them and what comes out. Maps have a visual appeal that is hard to beat.” He added that with respect to James’ proposal “His current idea sounds interesting: it touches on the point that there are (at least) ‘two ends’ of corruption.” Philippe Montigny, CEO, Ethic Intelligence, added  “I do share your views, that while a new map can add value,  it is important to know the quality of the data that are used,  to avoid conveying wrong messages.” Thus, it would appear that the main challenge is  data driven, as opposed to the concept, and I would invite Transparency International to submit their own views of James’ mapping proposal.

 

Australia, Singapore and New Zealand fall in Corruption Perceptions Index

bribery and corruption

Australia, Singapore and New Zealand have fallen respectively from 9th, 5th and equal 1st, to 11th, 7th and 2nd in the Transparency International’s annual Corruption Perceptions Index.

Transparency International, a global anti-corruption organisation, started out in 1993 and currently has a presence in over 100 countries. The organisation has contributed to the development of international anti-corruption conventions and the prosecution of shady leaders and the seizure of their corruptly-obtained property.

In 2014, Australia scored 80, down from 81 in 2013 and 94 in 2012. Singapore fell to 84, from 86 in 2013 and 87 in 2014. New Zealand remained steady on 91, but was overtaken by Denmark, which scored 92 this year.

“A poor score is likely a sign of widespread bribery, lack of punishment for corruption and public institutions that don’t respond to citizens’ needs,” the organisation says.

Perceptions of corruption can also harm countries’ economic growth and standing in the global community.

Several governments have adopted powerful legislation to combat bribery and corruption, equipping regulators and courts to hand out severe penalties for business misconduct.

Regulators in a variety of jurisdictions have regularly demonstrated that even small bribes can have serious consequences.

In the US, under the Foreign Corrupt Practices Act, arms manufacturer Smith & Wesson Holding Corp was hit by a $2 million fine by the Securities and Exchange Commission over a bribe of $11,000 for a contract valued at $107,852.
In the UK, a Magistrates’ Court clerk was sentenced to six years imprisonment for accepting a £500 bribe to conceal a traffic summons – but has since had his sentence reduced to four years.

The reach of anti-corruption legislation often extends across state jurisdictions.

In 2013, Chinese official Li Huabo was found guilty of receiving stolen Chinese government money in his Singaporean bank account.

Under Singaporean anti-money laundering laws, Li was sentenced to 15 months imprisonment following an investigation by the Suspicious Transaction Reporting Office. The Chinese official had received less than 10 per cent of his ill-gotten funds in his Singaporean bank account.

Though difficult to quantify, the World Bank estimates that at least $1 trillion is paid in bribes each year.

Does your organisation understand and comply with corporate misconduct and white collar crime laws? Talk to us today about our Anti-Bribery and Corruption courses.

Small bribes, big headaches

bribery and corruption

Even relatively small bribes are taken seriously by the authorities, as the three cases below reveal.

The Independent Commission against Corruption (ICAC) announced proceedings against Eddie Obeid last Thursday over the former MP’s lobbying efforts, which concerned a series of secretly-owned Circular Quay cafes. The case serves as a fresh reminder that even small bribes can lead to big headaches.

“Just like Al Capone and tax evasion, it might seem ironic that Eddie Obeid, the ultimate NSW powerbroker who pulled off a corrupt $60 million coal scam, goes down for a contract for a couple of lousy restaurants,” Australian Financial Review (AFR) reporter Geoff Winestock commented. The ICAC reports that Obeid may be undone for misusing his position as a Member of Parliament to influence the decisions of public officials, which resulted in favourable outcomes for his businesses. According to the AFR, Obeid hoped to double, or triple, the value of his $2.4 million investments in Circular Quay.

Last July, in the US, the Securities and Exchange Commission (SEC) pursued firearms manufacturer Smith & Wesson Holding Corp for a bribe of $11,000 to a Pakistani police department, in order to secure a $107,852 contract. The SEC fined the arms manufacturer $2 million under the U.S. Foreign Corrupt Practices Act (FCPA).

Commenting on the case, Bill Michael, co-chairman of Mayer Brown’s global anti-corruption and FCPA practice, told Corporate Counsel the SEC’s decision to chase down Smith & Wesson for a relatively small bribe was indicative of the commission’s hard-line approach on anti-bribery law. “Apparently, no case may be too small,” he said.

And in 2011, Manir Yakub Patel, the first defendant prosecuted under the UK Bribery Act, received a shocking six-year prison sentence for accepting £500 bribe to conceal a traffic summons. At the time, the 22-year-old worked at the Magistrates’ Court as a clerk. His sentence has since been reduced to four years in prison on appeal.

These three cases demonstrate that even relatively minor breaches of the law can lead to criminal investigations, court proceedings and severe penalties. Whether you’re in Australia, Singapore, or the UK, it’s essential you understand and comply with your country’s anti-corruption legislation.

Does your organisation understand and adhere to corporate misconduct and white collar crime laws? Talk to us today about our Anti-Bribery and Corruption courses.

Source: Australian Financial Review, Corporate Counsel

Anonymous shell companies* siphon USD $1trillion from developing countries

$1 trillion, enough money to employ half a million primary school teachers, is lost to corrupt activities undertaken by multinational companies in developing countries, according to a study by international advocacy group ONE.

The group states the lost money could alternately educate an extra 10 million children every year, provide antiretroviral medication for over 11 million people living with HIV/AIDS, or pay for 165 million vaccinations in sub-Saharan Africa alone.

A 2011 report by the World Bank, titled The Puppet Masters, estimates anonymous shell companies made an appearance in 70 per cent of major corruption cases between 1980 and 2010.

Director and co-founder of Global Witness, a London-based anti-corruption NGO, Charmian Gooch told the Sydney Morning Herald the group had turned up similar results: shell companies were consistently at the centre of all sorts of scandals, from suspect oil deals to blood diamond transactions.

Research from the World Bank indicates setting up a shell company is a low-cost enterprise, costing corporations between $900 and $7,000 AUD. In countries like the United States, where regulations are particularly lax, large corporations can create shell companies within an hour.

The crusade against shell companies has recently found new life as G20 leaders recently pledged to pursue tougher anti-corruption policies and chase illegal tax evaders and money launderers. The G20 recently released an anti-corruption action plan for 2015-2016.

“At the end of 2014, corruption continues to represent a significant threat to global growth and financial stability,” the plan reads. “Corruption destroys public trust, undermines the rule of law, skews competition, impedes cross-border investment and trade, and distorts resource allocation.”

“As a group of the world’s largest economies, the G20 remains committed to reducing the incidence of corruption and building a global culture of intolerance towards corruption.”

* A shell company refers to a non-trading company used as a vehicle for various financial manoeuvres.

 


 

Dates for your Diary!

Support our leaders in their mission to reduce corruption by attending the G20 High Level Principles on Beneficial Ownership Transparency. It is a ‘high priority’ pledge.

TI Corruption Perception Index 2014 Launch
Date: 4 December
Location: Brisbane, Melbourne, Perth and Sydney

International Anti-Corruption Day
United Nations Campaign
Date: 9 December

http://www.anticorruptionday.org/

Bribery and corruption takes its toll over Smith & Wesson Multi-National Corporation

bribery and corruption 

A recent case serves as a vital example of what small and medium sized businesses wanting to expand globally must first achieve in terms of governance, risk and compliance measures, to avoid bribery and corruption activities taking its toll on global operations.

In an out-of-court dispute between Smith & Wesson Holding Corporation and the US Securities and Exchange Commission to resolve Foreign Corrupt Practices Act offences, Smith & Wesson cooperatively agreed to pay a fine of $2 million.

Smith & Wesson, a US-based company was found guilty of paying bribes across the globe. According to the SEC, “Smith & Wesson’s international sales staff engaged in a pervasive effort to attract new business by offering, authorising, or making illegal payments or providing gifts meant for government officials in Pakistan, Indonesia and other foreign countries.”

Smith & Wesson consented to the order without admitting or denying the findings that show evidence of violating the anti-bribery, internal controls and books and records provisions of the Securities Exchange Act of 1934.
In addition to this large fine, Smith & Wesson has also been ordered to report to the SEC on its FCPA compliance efforts for the next two years.

This case demonstrates the challenges faced by corporations operating in multiple countries, no matter how well recognised they are. Even after 4-years of international operations keeping on top of compliance in all areas can be a struggle. This large penalty of $2 million serves as a warning to other organisations who are not vigorously looking into a compliance training program to educate their staff.

It is important to note that the SEC took into consideration Smith & Wesson’s cooperation with the investigation when determining an appropriate penalty. Smith & Wesson took effective remedial action straight after the conduct came to light by improving its internal controls and compliance process and also fired its entire international sales staff.

Don’t let undiscovered, illegal activities take place throughout your organisation. Ensure you are covered with an Anti-bribery and Corruption course.

Source: The FCPA Blog

Secret sex tape reveals £90million bribery and corruption probe

A secret sex tape involving a senior executive and his Chinese girlfriend was filmed and anonymously emailed to board members at GlaxoSmithKline.

The £76 billion global pharmaceutical company has been accused of bribing doctors to prescribe Glaxo’s drugs in return for £320 million worth of gifts.

Get a complete anti-bribery and corruption training course for your organisation.

Read the full article here.