Compliance Insider

Issue 13 > Compliance Alerts

Uber to conduct background checks on drivers

Uber Technologies has said it will be reviewing its safety practices, including introducing background checks on its registered drivers. The announcement comes after sustained pressure for the company to address concerns about how safe the app is following accusations of sexual assault by the drivers, among other complaints.

Issue 13 > Compliance Alerts

Avon missed opportunity to correct FCPA violations

Avon Products has paid to settle bribery allegations from the United States Securities and Exchange Commission (SEC) after failing to address compliance issues that were identified in a subsidiary in 2005. The beauty products company failed to implement compliance controls to detect and prevent bribes being given to Chinese government officials, while Avon employees at the company and consultants at a subsidiary allegedly gave payments and gifts to officials.

Issue 13 > Compliance Alerts

Season’s Greetings

The team at Compliance Insider® would like to take this opportunity to extend our very best wishes to all of our readers and their families during this holiday season, and to thank you all for your support in 2014.

Issue 13 > Compliance Alerts

No longer for your eyes only

An early version of the new James Bond movie script has been stolen as part of the Sony Pictures Entertainment hack. Last month’s hack saw upcoming films such as ‘Annie’ and ‘Fury’ taken and posted online on pirate websites, and the movie producer can now add the screenplay of SPECTRE to the list of items stolen by the hackers.

Issue 13 > Compliance Alerts

Italian PM proposes corruption crackdown following arrests

Italian Prime Minister Matteo Renzi has proposed a number of changes to the country’s corruption laws following dozens of arrests that revealed a ‘Mafia Capitale’ criminal network in Rome. Renzi’s proposals include increasing the minimum jail time for corruption from four years to six, making it easier to confiscate guilty persons’ assets, implementing a provision that victims should be reimbursed, and extending the statute of limitations.

Issue 13 > Compliance Alerts

Historical Myanmar bribery cases can still be prosecuted

Those found guilty of committing acts of bribery in Myanmar prior to 17 September 2013 will still face prosecution despite the fact that the Government cannot take action under the country’s anti-corruption laws. Responding to difficulties that people have faced in lodging complaints against acts committed before this date, Member of Parliament Thein Nyunt clarified that criminals can still be charged under the country’s penal code.

Issue 13 > Compliance Alerts

Companies still have inadequate compliance programmes

Nearly two-thirds of all multinational companies have insufficient anti-corruption programmes despite the increasing threat of repercussions for violating the United Kingdom’s 2010 Bribery Act, new research has found. Companies can defend themselves against fines for failing to prevent bribery simply by having adequate procedures in place to combat corruption. This is the case even if the compliance programme fails on one occasion.

Issue 13 > Compliance Alerts

Airbus raided in Germany

Airbus Group’s German office has been raided, as a probe into the French aerospace company continues into alleged bribery and tax evasion in Romania and Saudi Arabia. Spokesman for the Munich prosecutors, Thomas Steinkraus-Koch, said the searches were conducted a few weeks ago with the investigation starting last year. The investigation is examining questionable payments worth US$3.7 million associated with defence sales. It has similarities with a corruption case against Siemens, in which the electronics company eventually paid a settlement of US$737 million.

Issue 13 > Compliance Alerts

Indian government corruption purge nets record results

India has announced a record-breaking year in 2014 for reported crimes by government departments. The number of crimes reported in different government departments by the Anti-Corruption Bureau (ABC) rose from 583 in 2013 to 1,199 this year. This represents an increase of 104 percent, with the month of December still to complete.

Issue 13 > Compliance Alerts

Spanish Prime Minister calls for rapid justice

Spain needs to hire more judges in order for the country to effectively combat corruption, said Spanish Prime Minister Mariano Rajoy. Announcing new draft laws, Rajoy criticised the “eternity” it can take for some cases to be brought to court in Spain. “Justice has to be rapid,” he said. “A slow justice system loses efficacy.” Among the measures included in the draft laws are restrictions on donations to political parties, the banning of banks writing off loans to parties or extending them at below-market rates, and additional rules on transparency.

Issue 13 > Compliance Alerts

Indonesian oil and gas industry braces for audit

Indonesia’s Corruption Eradication Commission (KPK) has announced that it will conduct an oil and gas industry wide audit. This is the latest move in a corruption crackdown in the country, as authorities attempt to restore investor confidence in the energy sector. KPK deputy chairman for crime prevention Johan Budi said: “In 2015, we plan to undertake a comprehensive study of the management of the entire oil and gas sector.”

Issue 13 > Compliance Alerts

Mexico faces sweeping police reforms

Mexico President Enrique Pena Nieto has announced sweeping police and justice reforms following the disappearance of 43 students in Iguala that sparked national outrage. Under the new laws, which include a police overhaul, the federal government will be able to dissolve local governments that fall prey to criminal groups, and a new 911 emergency-style number will be introduced.

Issue 13 > Compliance Alerts

Bermuda rejects calls for public registry

Offshore financial centre Bermuda has rejected calls by United Kingdom Prime Minister David Cameron to establish a public register of the ultimate owners of companies in an effort to increase transparency and promote good corporate behaviour. The United Kingdom’s wealthiest overseas territory argues that it has led the way on transparency for the last 75 years, and that such an initiative could damage its economy.

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

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

FIFA compliance chief to review full report

FIFA’s compliance chief will be made privy to the full report into alleged corruption during the bidding process for the 2018 and 2022 World Cups. A summary of the report was released by FIFA, but was criticised by its author as being inconsistent with the report’s conclusions. The report will be disclosed to compliance chief Domenico Scala, who will present the organisation’s Executive Committee with selected evidence. The body will then decide the best course of action, and has not ruled out a re-vote.

Issue 13 > Compliance Alerts

SEC introduces rules to improve technology infrastructure

The United States Securities and Exchange Commission has announced the introduction of a series of rules designed to improve technology infrastructure in the United States securities market. The rules have been named ‘Regulation System Compliance and Integrity’ (‘Regulation SCI’), and aim to reduce occurrences of system issues, and improve resilience and responsiveness to system problems.

Issue 13 > Compliance Alerts

Petrobras yet to align compliance response with executive compensation

Brazil state-owned oil company Petrobras will create a dedicated internal compliance division to track internal processes following the recent arrests of 23 people on suspicion of money laundering and corruption. The company’s head Graca Foster made the promise to the Brazilian people after newly re-elected President Dilma Rousseff said that all agreements between Petrobras and its contractors would be investigated.