Compliance Insider

Issue 12 > Compliance Alerts

Spain introduces anonymous whistleblowing email

The Spanish competition authority, the Comision Nacional de los Mercados y de la Competencia (CNMC), has introduced an email address to allow whistleblowers to report alleged anti-competitive behaviour. The new system allows people to report misconduct informally without having to comply with normal reporting requirements. Any customer, competitor or employee can use the email address to report their suspicions. And the whistleblower will not be required to provide their name, any evidence or details to support their allegations.

Issue 12 > Compliance Alerts

United Kingdom banks should embrace more compliance

Banks in the United Kingdom have been complaining about the increasing number of regulations they face in the coming years, warning that they will cost the country its reputation as a global financial centre. Banks with deposits of at least US$40 billion will be required to ‘ring fence’ their retail banking activities from their investment banking activities by 2019. In addition, senior managers will be held more accountable for the misconduct of staff. And provisions will be introduced to control and rein in bonuses.

Issue 12 > Compliance Alerts

Perfume business owner indicted for tax reporting failures

The United States Department of Justice (DOJ) has announced that the owner of a wholesale perfume business in Texas was indicted for failing to report at least 44 cash transactions worth more than US$10,000.

Issue 12 > Compliance Alerts

DOJ charges China-focused counterfeit drug smugglers

Three Texan-based residents have been indicted by the United States Department of Justice (DOJ) on charges connected with the alleged smuggling of prescription drugs from China. According to the indictment, the defendants smuggled approximately 100,000 bogus imitation pills from China to Texas. Affected brands included Xanax, Valium, sibutramine, Cialis, Viagra and Stilnox.

Issue 12 > Compliance Alerts

Low-level Ebola corruption could have high-level repercussions

Reports have arisen claiming that teams sent to retrieve the bodies of Ebola victims in Liberia are accepting bribes. The teams allegedly accepted money in exchange for a death certificate stating other causes of death, so the victim’s family could perform a traditional burial. Authorities are cremating Ebola victims in an attempt to contain the disease.

Issue 12 > Compliance Alerts

Converse suit a reminder on copyright compliance

Shoemaker Converse is suing 31 companies for copying the design of its most iconic shoe, the Chuck Taylor. The company has served approximately 180 cease and desist letters over the last six years in an attempt to protect its brand. The Nike subsidiary filed lawsuits against large retailers including Wal-Mart and Ralph Lauren claiming that they produced shoes that closely resembled Converse’s Chuck Taylor, which found fame on the basketball courts in 1917 and has grown in popularity since.

Issue 12 > Compliance Alerts

Corruption activists warn against government interference

Corruption activists have warned the United Kingdom Government to keep its distance from the Serious Fraud Office’s (SFO‘s) investigation into bribery in Saudi Arabia at an Airbus subsidiary. The campaigners fear that government interference might influence the investigation and even result in it being shut down.

Issue 12 > Compliance Alerts

Equatorial Guinea President’s son settles with DOJ

The son of the President of Equatorial Guinea will settle corruption allegations made by the United States Department of Justice (DOJ) after agreeing to pay US$30 million in assets. The assets include a Malibu mansion, a Ferrari and Michael Jackson memorabilia. The DOJ announced that Teodoro Nguema Obiang would pay the settlement in what is the first case of its kind. The DOJ has never targeted the family of a current head of state.

Issue 12 > Compliance Alerts

Hong Kong chief executive under pressure for undisclosed payments

The pressure on Hong Kong’s chief executive has mounted, as it came to light this week that he received millions of dollars from an Australian company in return for supporting its Asian business ambitions.

Issue 12 > Compliance Alerts

Reputational damage from bribery charge could destroy Canadian firm

The head of a Canadian engineering firm has said that if authorities charge it with an extensive bribery scandal, it would threaten the future of the company. SNC Lavalin Group chief executive Robert Card added that if the company could not continue to do business, there would only be two choices available: “do some dismemberment and cease to exist entirely” or become “owned by somebody else”. A shift to a foreign owner would jeopardise Canadian jobs, he said.

Issue 12 > Compliance Alerts

New EU competition commissioner targets cartels

The newly elected president for the European Union’s (EU’s) Commission for Competition has told the European Parliament at a hearing that she is taking a tough stance on cartels. Former Danish minister for economic affairs and interior Margrethe Vestager made it clear that she would not be lenient in her implementation of fines, saying they must “ruin any undue profits”.

Issue 12 > Compliance Alerts

Whistleblower ignored as Tesco faces accounting scandal investigation

New Tesco chief executive Dave Lewis faces fresh newspaper revelations about the apparent culture of compliance at the United Kingdom’s largest retailer, just one month into his reign. As he tackles an accounting scandal that includes overstating first-half profit by £250 million (US$400 million), Lewis has learned that the very whistleblower that first raised concerns about the scandal was initially ignored.

Issue 12 > Compliance Alerts

Toyota probed again by United States authorities

United States safety regulators have said they are looking into a petition to investigate Toyota Motor Corporation for problems with the breaking system on its Corolla model. The announcement came soon after the car company recalled 690,000 Tacoma pickup trucks for rear suspension concerns and in the same year as it paid US$1.2 billion to settle with United States prosecutors over safety issues.

Issue 12 > Compliance Alerts

Jamaican whistleblower legislation lauded by OECD

Jamaica’s 2011 Protected Disclosures Act is regarded by the Organisation for Economic Co-operation and Development (OECD) as one of the best pieces of whistleblowing legislation enacted by countries globally. Other countries ranked highly by the OECD for similar legislation include Australia, New Zealand, South Africa, South Korea, the United Kingdom and the United States.

Issue 12 > Compliance Alerts

Sandwich chain is latest retailer to suffer data breach

Illinois-based sandwich chain Jimmy John’s, or JJs, has confirmed that it recently suffered a nationwide credit and debit card data breach at 216 locations. This represents around 11 percent of its approximately 2,000 stores. The Champaign-based company said it learned of the breach on 30 July, one day before cyber security reporter Brian Krebs revealed that banks had identified fraudulent transactions on cards recently used at JJs.

Issue 12 > Compliance Alerts

Historical islands dispute behind additional Japanese sanctions on Russia

A visit by a senior Russian official to islands at the centre of a long-standing territorial dispute with Japan appears to have been a factor behind Japan’s decision to impose additional sanctions on its neighbour for its role in the Ukraine crisis. The new sanctions will impact the activities of Russian banks in Japan as well as increase controls on arms exports.

Issue 12 > Compliance Alerts

Better programme monitoring could have prevented Barclays fine

The investment banking division of Barclays Bank has agreed to pay a US$15 million penalty for failing to maintain an adequate internal compliance system, following the September 2008 acquisition of Lehman Brothers’ advisory business by its United States wealth management business. In settling the case with the United States Securities and Exchange Commission (SEC), Barclays Capital (now trading as Barclays) also agreed to undertake remedial measures such as engaging an independent compliance consultant to conduct an internal review.

Issue 12 > Compliance Alerts

Glaxo fine and suspended sentences sends wrong message to pharma industry

The issuance last week of an almost US$500 million fine for bribery to United Kingdom drug maker GlaxoSmithKline (GSK) by the Changsha Intermediate People’s Court in Hunan Province in China, together with the suspended prison sentences for five of the company’s managers, has not sent a strong enough message to other pharmaceutical companies – an industry notorious for corruption in China.