Compliance Insider

Issue 13 > Compliance Alerts

Total S.A. charged with corruption

French multinational Total S.A. faces corruption charges in France for allegedly giving bribes in Iran in the 1990s and early 2000s. The Paris prosecutor’s office has charged the oil and gas company with the corruption of foreign officials. Total paid US$398 million to settle United States allegations last year following an investigation into bribes to secure Iranian contracts. As a result, it was not charged with violating the Foreign Corruption Practices Act (FCPA), instead entering a three-year deferred prosecution agreement.

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

Raids reveal bribery list

An entertainment venue in Bangkok has been raided by Thai authorities, who found a list of police officers that were allegedly receiving bribes so that they would turn a blind eye to license violations and illegal sex services. Illegal items, including drugs, were also found. The raid was conducted by 50 police and military officers after reports arose that the venue did not have the appropriate licences and was offering sex services.

Issue 13 > Compliance Alerts

FIFA criminal complaint sends mixed messages

FIFA has sent mixed messages to the public by submitting a ‘criminal complaint’ to the Swiss attorney general in relation to the bidding process for the 2018 and 2022 World Cups. It remains adamant however that evidence from the investigation into the process is not sufficient to warrant publishing the findings of that investigation in full.

Issue 13 > Compliance Alerts

HSBC accused of money laundering

A Belgian prosecutor has formally accused the Swiss arm of HSBC of money laundering. The prosecutor said that the bank helped more than 1,000 wealthy investors avoid tax by moving money to offshore havens such as Panama and the British Virgin Islands. A spokesman for the court said that the bank was helping wealthy Belgian clients avoid a 35 percent tax rate for money held in Switzerland by advising them to move their money offshore. Several billion dollars are estimated to have left Swiss accounts as a result.

Issue 13 > Compliance Alerts

HSBC’s Turkey customer data compromised

The information of 2.7 million HSBC customers in Turkey has been stolen by hackers in the latest cyber-attack on a financial institution. The bank, which has approximately three million customers in Turkey, said the attack was on its credit and debit card systems. The bank insisted that “there has been no evidence of any fraud or other suspicious activity arising from the incident”. However, card numbers, account numbers, card expiry dates and customer names had been “compromised”, according to Reuters.

Issue 13 > Compliance Alerts

ESCO Corp sanctions settlement reduced for self-reporting

ESCO Corporation has agreed to pay the United States Treasury Department US$1.2 million in a settlement for violating sanctions on Cuba. The manufacturer of products for mining, oil and construction companies bought nickel briquettes made or derived from Cuban-origin. The transactions occurred between 2007 and 2011, and amounted to US$2.6 million. The Treasury noted the company’s self-disclosure of the violations to the Office of Foreign Assets Control (OFCA).

Issue 13 > Compliance Alerts

Singapore customs officer charged with corruption

A former Singapore customs officer has been charged with corruption after attempting to obtain gratification in exchange for leniency for an offence of possessing contraband cigarettes. Jonathan Sasayiah attempted to win intimate acts from Nursuilla Kassim in July this year. In exchange for the acts, he said would show leniency for her being in possession of contraband cigarettes, according to Channel News Asia.

Issue 13 > Compliance Alerts

Tesco troubles could benefit retailers seeking to float

Tesco supporters have shown a lack of confidence in the company since the onset of investigations into its financial reporting. Although it remains the leading fashion retailer in the United Kingdom, Tesco’s share price has dropped by 45 percent since the start of 2014. Other fashion retailers in the United Kingdom wanting to enter the stock market should pay heed to Tesco’s troubles, and be aware of the numerous obligations and risks they will face.

Issue 13 > Compliance Alerts

Navy contractors’ jail time shows risks with government officials

A former United States Navy contractor has been jailed for receiving bribes in exchange for directing business towards a government contracting company, despite that company’s co-founder having limited industry experience. Military Sealift Command (MSC) contractor Scott B Miserendino Sr was sentenced to 96 months in jail for accepting money and other gifts from Timothy S Miller, who was sentenced to 24 months in jail and given a US$25,000 fine. They were also ordered to forfeit US$212,000 and US$167,000 respectively.

Issue 13 > Spotlights

What to expect with pre-trial agreements

Highly-publicised bribery and corruption allegations or prosecutions can seriously damage a company’s profits and reputation. Although pre-trial agreements are a preferred option to criminal charges and full prosecution, they do not serve the purpose of completely absolving financial liability. Compliance officers need to be familiar with what these agreements do offer, how to negotiate one if faced with a prosecution, and how, in the event of misconduct occurring, the effectiveness of a compliance programme can be an important factor in any such negotiation with enforcement agencies.

Issue 13 > Things To Think About™

Database screening for third party compliance

Managing the compliance of third parties is a major undertaking for corporations. Many large companies have tens of thousands, if not hundreds of thousands, of partners globally; smaller entities must manage hundreds of agents, distributors and sundry other types of suppliers. This is in addition to the myriad risks that must be managed, such as corruption, money laundering, export control management and fraud.

Issue 13 > Handbooks

The art of successful compliance training

Training is a key part of an effective compliance programme. Psychological studies have shown that the average amount of knowledge retained through reading alone reduces by 90 percent in three days, so merely drafting company codes and policies will see little return unless backed up with adequate training.

Issue 13 > 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 12 > Compliance Alerts

Mexican President under fire for links to Chinese consortium

Mexican President Peña Nieto faces fresh allegations that his personal residence is owned by a company linked to a Mexican member of a Chinese-led consortium that recently won a US$3.6 billion high-speed rail contract. The allegations are particularly embarrassing for the President, who subsequently cancelled the contract after an outcry over the bidding process, as he is currently in China to attend the Asia-Pacific Economic Co-operation (Apec) forum.

Issue 12 > Compliance Alerts

Chad ambassador bribery illustrates African risk

The United States Department of Justice (DOJ) is seeking the recovery of approximately US$100,000 in bribes that a Canadian energy company paid to the former Chad ambassador to the United States and Canada. Mahamoud Adam Bechir served as Chad ambassador between 2004 and 2012, and allegedly sought to use his position to win bribes.