Compliance Insider

Issue 20 > Compliance Alerts

Medtech sector seeks guidance on transparent future

A physician-industry transparency system that requires the medtech sector to disclose publically the payments and transfers of value it makes to physicians and certain other providers is very welcome, but not in its current form. That was the conclusion drawn from yesterday morning’s opening panel discussion on global transparency which, among other things, examined different transparency models around the world, company concerns, and best practices when addressing emerging requirements.

Issue 20 > Compliance Alerts

Communication is key to preserving educational opportunities

During yesterday morning’s panel discussion on ‘Upcoming Change in the Industry Compliance Landscape and Impact on Other Stakeholders’, BioMed Alliance president Colm O’Morain sought to reassure the audience when he stated that the new AdvaMed code “will in the end not cause a major shock”. In addition to BioMed Alliance, panelists from the European Federation of National Associations of Orthopaedics and Traumatology (EFFORT) and the European Federation of Clinical Chemistry and Laboratory Medicine (CELME) shared their thoughts on what the code will mean for physicians, associations and patients.

Issue 20 > Compliance Alerts

No current industry sweep but don’t get complacent

Although the medical devices industry is not currently in the line of fire with enforcement agencies around the world, compliance professionals in this space have no reason for complacency. The warning to conference delegates came from two former enforcement officials now in private practice. White & Case partner Kathleen Hamann, formerly of the Foreign Corrupt Practices Act (FCPA) unit of the United States Department of Justice (DOJ), and Dechert partner Matthew Cowie, formerly of the United Kingdom Serious Fraud Office (SFO), highlighted for delegates the key differences in prosecutorial approach between the two jurisdictions.

Issue 20 > Compliance Alerts

Companies are the wagging tail to the supply chain dog

Speakers on yesterday’s engaging panel discussion on ‘Emerging Markets Risks When Onboarding Third Parties’ spent the session exploring new due diligence requirements in such markets as well as discussing challenges in contracting with local suppliers and the training of these intermediaries. “Disclosure of corruption in a country can lead to innovative ways in which to respond to it,” stated moderator Susan Murr, non-executive director at The Red Flag Group.

Issue 20 > Compliance Alerts

Conference delegates anticipating varied and vital agenda

The Ambassador of the United States of America to Ireland Kevin F O’Malley will this evening host a welcome cocktail reception for all Global MedTech Compliance Conference (GMTCC) delegates at his residence in Phoenix Park in Dublin. The Ambassador will be joined by a number of guests from the Irish Medical and Surgical Devices Association (IMSTA) and the Health Products Regulatory Authority (HPRA). The GMTCC will provide complimentary transport for all attendees, some of whom spoke with Compliance Insider® about what they are most looking forward to at GMTCC2016.

Issue 20 > Compliance Alerts

When under FCPA investigation, do not buy a new jet

The hedge fund Och-Ziff has been in the news of late, unfortunately not for its business acumen in generating profits for its clients. The company recently announced that it was setting aside US$200 million for a possible settlement with the United States Department of Justice (DOJ) over violations of the Foreign Corrupt Practices Act (FCPA). The significance of this enforcement action will be felt across the globe as it will be the first such matter involving a private equity company. These companies have operated for years without DOJ scrutiny over the FCPA, but those days appear to be soon ending.

Issue 20 > Compliance Alerts

Former Google employee pleads guilty in global fraud case

A former Google executive who worked for the technology company as a strategic negotiator for its global infrastructure group in 2008 and 2009 has pleaded guilty in a federal court in Pittsburgh to conspiring to defraud the United States. Simon Tusha allegedly received approximately US$3.2 million through wire transfers from tech firms based in the United Kingdom and the Netherlands and stored these funds in shell corporations to hide them from the United States Internal Revenue Service (IRS).

Issue 20 > Compliance Alerts

Cyberattacks targeting high-risk markets shows need for better security systems

There has been a rise in the number of security breaches involving healthcare companies and banks in recent weeks, which has led to demands for heightened security measures. For example, the Ministry of Health in Turkey recently confirmed that hackers were able to access databases from 33 hospitals in Diyarbakir, Siirt and Tekirdağ provinces. Cybercriminals then deleted information from company databases after it was copied across to the hacker’s own devices. The Government of Turkey claimed that none of the data was permanently lost as it had been backed up.

Issue 20 > Compliance Alerts

AML initiative timely for HK Government following Panama Papers

The Hong Kong Government has thrown its support behind a new initiative designed to set standards around anti-money laundering (AML) and counter-terrorist financing (CFT) for corporate service providers (CSPs). Deputy Secretary for Financial Services and the Treasury, Selina Yam, attended the launch of the Hong Kong Institute of Chartered Secretaries’ (HKICS’s) AML/CFT Charter and a signing ceremony by six CSPs who are founding subscribers to the Charter.

Issue 20 > Compliance Alerts

Chipotle recruits critics to combat food safety concerns

Chipotle Mexican Grill has upped the ante in its PR battle to win back diners by hiring two food safety specialists, one of whom was openly critical of the burrito chain’s response last year to various disease outbreaks. David Acheson, a former official at the United States Food and Drug Administration (FDA), has joined the company as an adviser. The other adviser is David Theno, a former Jack in the Box executive who previously helped the company negotiate an E.coli outbreak in the 1990s. Chipotle confirmed that both men were retained last year but gave no details.

Issue 20 > Compliance Alerts

Russian broker used London futures market to launder criminal revenue

A Russian broker has been arrested on suspicion of laundering money for a Russian gang using London’s futures market. Dzimitry Niadzvetski, a broker for a United States agricultural trader, was detained in March after a four-month investigation. He is currently out on bail until July. In line with his arrest, City of London police froze approximately US$22 million worth of cheques and international accounts from a clearing house located in the city. The scam is allegedly part of a global network spanning Switzerland, the Caribbean and Russia.

Issue 20 > Compliance Alerts

Organic food items recalled due to Salmonella alert

Two organic food manufacturers in the United States have issued product recalls recently due to the presence of Salmonella bacteria in their offerings. On 9 May, the California Department of Public Health informed consumers of the presence of the bacteria in the raw cream product of California-based Organic Pastures Dairy. One day later, the United States Food and Drug Administration (FDA) announced a voluntary recall of Frontier Co-op’s Organic Hojicha Tea as the same pathogens were detected. Although no illnesses have yet been reported in connection with the two products, the incidents do raise the issue of how best to manage health and safety risks.

Issue 20 > Compliance Alerts

The cascading effects of the Yates Memo

Deputy Attorney General of the United States, Sally Yates, spoke this week at the New York City Bar Association’s white collar crime conference about the effect seen by the Justice Department (DOJ) since the release of the Memo bearing her name last September. Initially disclaiming any desire to have a Memo named after herself, preferring it to be known as the ‘Individual Accountability Policy’, Yates confirmed that the DOJ had seen a real impact from corporations.

Issue 20 > Compliance Alerts

German nuclear power plant hit by cyber intrusion

Malware has reportedly been installed at a nuclear power plant in Germany. The Gundremmingen plant northwest of Munich was found to have been infected with two major viruses and malware after the computer system on block B was taken offline on 7 April. Although it is understood that the malware was not a threat to the plant’s operations as the facility is isolated from the Internet, German utility owner RWE confirmed that it had shut down the reactor that loads fuel from the core following the discovery.

Issue 20 > Compliance Alerts

The Year in FCPA enforcement

This first five months of 2016 have brought some of the most dramatic Foreign Corrupt Practices Act (FCPA) enforcement actions and Department of Justice (DOJ) initiatives seen in recent years. Last year was perceived to be a ‘down year’ as there were ‘only’ 10 DOJ and 10 Securities and Exchange Commission (SEC) FCPA enforcement actions. This (apparent) lull ended with a bang in February of this year.

Issue 20 > Compliance Alerts

New Zealand broker settles over money laundering breaches

One of the largest broking firms in New Zealand has avoided a court trial by settling with the country’s regulator for breaching anti-money laundering laws. The Financial Markets Authority (FMA) issued Craigs Investment Partners with a formal warning after finding that it had failed to conduct reasonable due diligence on a client and then failed to terminate the client relationship even after requirements had not been met. Craigs admitted to breaching the Anti-money Laundering and Countering Financing of Terrorism Act, which was introduced in New Zealand in June 2013.

Issue 20 > Compliance Alerts

How predictive analytics can help address channel stuffing

As part of their efforts to crackdown on financial malpractice, regulators are changing their stance on some longstanding practices that have previously been permitted. One of these is the book-cooking technique known as ‘channel stuffing’, which is now a criminal offence in the United States. Companies must therefore find ways of getting on the front foot when it comes to tackling this form of misconduct.

Issue 20 > Compliance Alerts

Stakeholders benefit from targeted antitrust training

When training key stakeholders on concepts surrounding antitrust, it is important that the training programme is relevant and specific to each position in the company. Employees, after all, can be faced with various situations that are unique to their role and function. It is vital that they are equipped with the proper knowledge and tools to help mitigate risks and pre-empt any grave repercussions. The Red Flag Group recently hosted a webinar on ‘Training your key stakeholders on Fair Competition (Antitrust) concepts’. The webinar tackled issues of antitrust specific to each type of company stakeholder, and how they could effectively address certain situations without damaging or posing risks to the business. Below is an extract from the webinar, which was hosted by Director of Professional Services for the APAC region Juliet Lui.