How robust are the anti-bribery strategies in your organisation? Do you have any? Bribery is not a phenomenon limited to multinationals operating in some of the more obscure, less-regulated areas of the world. It can happen in any company at any time. The OECD has warned of companies dropping their guard during the pandemic. The stories below, selected from the daily news newsletter Risk Channel, give a flavor of the briefings our community receive each morning to keep them abreast in this area and a myriad of others impacting on HR professionals.

Derivatives regulator uses Dodd-Frank to target foreign bribery

24-Dec-2020 | Wall Street Journal

The Commodity Futures Trading Commission (CTFC) has started to investigate and police bribery by multinational corporations despite not having the statutory authority to enforce antibribery laws directly. Earlier this month, the regulator reached a $95m settlement with Swiss energy firm Vitol for alleged misconduct stemming from bribes paid to state-controlled oil companies in Brazil, Ecuador and Mexico. The basis for the CFTC’s enforcement action against Vitol is an antimanipulation rule that was introduced as a result of the 2010 Dodd-Frank Act and modeled after a securities law prohibiting insider trading. The rule prohibits the use of a “manipulative device, scheme, or artifice to defraud” in connection with the U.S. derivatives markets. Trading on material nonpublic information isn’t prohibited by U.S. commodities laws. But it may violate the CFTC’s rules if it is done in breach of a pre-existing duty or if the information is obtained fraudulently.

Former energy trader pleads guilty in Ecuadorean bribery scheme

08-Apr-2021 | Wall Street Journal

A former employee of European energy trader Gunvor has pleaded guilty to participating in a bribery scheme involving Ecuadorean state-controlled oil company Petroecuador. Raymond Kohut pleaded guilty in a virtual hearing before a judge for the federal court based in Brooklyn, N.Y. to a single count of money laundering. In a statement to the court, Kohut said he worked with two of his supervisors and two independent consultants to funnel millions of dollars in bribes to Ecuadorean officials to win business from Petroecuador. Prosecutors said separately that the scheme involved the payment of more than $22m in bribes. A spokesperson for Gunvor said the company was cooperating with the Justice Department’s investigation. “Gunvor Group has learned of charges being brought against a former employee of the company by the U.S. Department of Justice that relate to business with an intermediary agent and Petroecuador,” the spokesperson said.

Former Alstom executive challenges Foreign Corrupt Practices Act

01-Nov-2019 | Wall Street Journal 

Lawrence Hoskins, a former senior vice president for French multinational Alstom, has challenged the application of U.S. foreign bribery law in a case that raises legal questions about who is subject to its long reach. Mr Hoskins was charged in 2013 with helping organize a scheme to bribe Indonesian officials for a $118m power contract, in violation of the U.S. Foreign Corrupt Practices Act (FCPA). Prosecutors say Mr. Hoskins acted as an agent of Alstom Power Inc., a former Alstom subsidiary in Windsor, Conn., and as such comes under the auspices of the FCPA, which applies to companies listed on U.S. stock exchanges and also the shareholders, directors, employees and agents of private companies organized under U.S. laws. But Mr Hoskins was a U.K. national who never entered the U.S. during his three years at Alstom, Dan Silver of law firm Clifford Chance said, asking jurors at the U.S. District Court for the District of Connecticut “Why are we here?”

Walmart to pay $282m to settle federal bribery charges

21-Jun-2019 | CNN, CBS News, New York Times

Walmart agreed Thursday to pay a total of $282m to settle a U.S. bribery investigation in connection with the retailer's operations in Brazil, China and other countries, capping one of the biggest investigations ever under the Foreign Corrupt Practices Act, which makes it illegal for American corporations to bribe overseas officials. The deal requires Walmart to return $144m in gains to the SEC, and pay a $138m penalty to the Justice Department. A Walmart unit in Brazil used a consultant known as the “sorceress” or the “genie” for their success in obtaining permits that were needed to open stores, the SEC’s order alleged. "We're pleased to resolve this matter," said Walmart President and CEO Doug McMillon in a statement. "Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate. We've enhanced our policies, procedures and systems and invested tremendous resources globally into ethics and compliance, and now have a strong Global Anti-Corruption Compliance Program."

Former JPMorgan banker acquitted in bribery trial

02-Feb-2021 | Wall Street Journal

A former senior banker at JPMorgan Chase has been acquitted of bribing a potential client by hiring his son, in a ruling that is a defeat for Hong Kong’s antigraft agency. Catherine Leung Kar-cheung, a former vice chairwoman of JPMorgan’s Asia-Pacific investment banking business, had been charged in May 2019 with bribing a businessman to win a mandate for an IPO by promising a job to his son. Her prosecution came after JPMorgan faced U.S. scrutiny for its so-called Sons and Daughters program, in which bankers in Asia offered internships and jobs to relatives of clients and prospective clients to win investment-banking business between 2006 and 2013. In 2016, JPMorgan admitted it had violated the Foreign Corrupt Practices Act and agreed to pay $264m to resolve U.S. civil and criminal charges.

Apple’s head of global security indicted for alleged bribery

24-Nov-2020 | Washington Post, The Times, NBC News, Financial Times, CNN

Apple’s head of global security has been charged with bribery, having allegedly promised to donate iPads to the Santa Clara County Sheriff’s Office in California, in exchange for concealed-weapons permits. Thomas Moyer allegedly offered 200 iPads worth $70,000 to the sheriff's office in exchange for four concealed carry licenses "withheld from Apple employees”. Apple said it investigated the allegations and found no wrongdoing. "We expect all of our employees to conduct themselves with integrity”, spokesperson Josh Rosenstock said in a statement. "After learning of the allegations, we conducted a thorough internal investigation and found no wrongdoing."

Toyota discloses potential anti-bribery breaches in Thailand

24-Mar-2021 | Bloomberg, Wall Street Journal

Toyota has alerted the U.S. Justice Department and the Securities and Exchange Commission (SEC) to possible anti-bribery violations involving a subsidiary in Thailand, which could result in civil or criminal penalties. “Toyota works tirelessly to uphold the highest professional and ethical standards in each country where we operate,” Toyota spokeswoman Shiori Hashimoto. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all appropriate government regulations.” The scope, duration and outcome of the investigations are unknown at this time, according to a securities filing

Petrofac’s Lufkin admits bribery

18-Jan-2021 | The Times

The U.K.'s Serious Fraud Office (SFO) has confirmed that David Lufkin, Petrofac's former global head of sales, has admitted to bribery related to $3.3bn of work that the group had won in the United Arab Emirates. He also pleaded guilty in 2019 to 11 charges of bribery related to more than $4.2bn of work in Saudi Arabia and Iraq. Petrofac said no charges have been brought against “any group company or any other officers or employees,", and added that it was continuing to engage with the SFO, which launched a probe into concerns in 2017.

Former Unaoil exec sentenced over $1.7bn Iraq bribery plot

09-Oct-2020 | Aljazeera

A former executive at Monaco-based oil and gas consultancy Unaoil has been sentenced to three years and four months in jail by a London court for bribing Iraqi officials to secure $1.7bn of oil projects. Basil Al Jarah, Unaoil's former Iraq manager, admitted payment of $17m in bribes to ensure contracts to build pipelines, an oil platform and offshore mooring buoys in the Arabian Gulf. “This was a classic case of corruption, where powerful men took advantage of the desperation and vulnerability of others to line their own pockets,” said U.K. Serious Fraud Office chief Lisa Osofsky.

OECD warn of possible impact of pandemic on foreign bribery

01-May-2020 | Wall Street Journal

The Organization for Economic Cooperation and Development's anti-bribery group has warned countries to guard against potential bribery as they contend with the coronavirus pandemic. Drago Kos, chairman of the OECD Working Group on Bribery in International Business Transactions, said it is vital that nations remain actively engaged in anticorruption efforts during the outbreak. Officials in charge of enforcing the U.S. Foreign Corrupt Practices Act also warn that the pandemic could create opportunities for corruption. “Reporting and detecting misconduct continue to be very important things for companies to do,” David Fuhr, an assistant chief of the U.S. Justice Department’s anti-foreign-bribery unit, said.

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