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Anti-Corruption Compliance and Investigations
– The Asia Challenge for US Businesses
Tuesday, July 15, 2014
Washington, DC
Norton Rose Fulbright’s capabilities
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Asia overview Practice strengths
Antitrust and competition
Asset finance
Aviation
Banking and finance
Capital markets
Corporate, M&A and securities
Dispute resolution and litigation
Insurance
Intellectual property
International arbitration
Islamic finance
Joint ventures
Project finance
Regulation and investigations
Shipping
Telecommunications
Trade finance
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Agenda
• Introduction 5
• United States/United Kingdom 11
– Extraterritoriality
– International Cooperation
– Interacting with Foreign Regulators
• China 16
– Legal Overview
– FCPA/UKBA Comparison
– Risks
– Cultural Challenges
• Hong Kong 28
– Legal Overview
– FCPA/UKBA Comparison
– Risks
– Cultural Challenges
• Singapore 38
– Legal Overview
– FCPA/UKBA Comparison
– Risks
– Cultural Challenges
• Indonesia 45
– Legal Overview
– FCPA/UKBA Comparison
– Risks
– Cultural Challenges
• Compliance 50
– Developing a Global Program
– Investigations
– Local Challenges in Asia
• Navigating Due Diligence and
Investigation Challenges in China 58
• Appendix of Local Laws and Cases 68
– China 69
– Hong Kong 73
– Singapore 83
– Indonesia 106
• Publications 118
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Introduction
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Moderator Richard Craig Smith
Head of Regulatory and Governmental Investigations,
United States – Partner, Washington DC
Fulbright & Jaworski LLP (Norton Rose Fulbright)
Richard Smith is a partner in the firm's Washington, D.C. office, where he is Head of
Regulatory and Governmental Investigations, United States, chair of the firm's
Global White Collar Crime and Government Investigations practice group, and the
FCPA and International Anti-Corruption practice group.
He also co-chairs the firm's International Investigations and Subprime practice
groups and he is a member of the firm's Executive Committee. His practice focuses
on complex litigation, white collar criminal defense, transactional and third party due
diligence, risk assessment, creation and review of anti-corruption policies and
procedures, and US-centric and transnational corporate internal investigations for
public and private companies.
He has extensive experience representing corporate entities, their executives and
employees in connection with grand jury investigations, civil and criminal trials and
hearings, transnational regulatory investigation and enforcement proceedings,
federal and state criminal prosecutions and criminal antitrust investigations and
prosecutions. He also has experience representing business entities and executives
in such civil matters as breach of contracts, tortious interference of business
relationships, business conspiracy, fraud, criminal conversion and forum non
conveniens. Due to his extensive experience handling high-profile matters, Richard
is often called on by the national media for commentary. Among others, he has
appeared on CNN, 20/20 and has been quoted in The Washington Post, The Wall
Street Journal, and Birmingham News.
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Fulbright & Jaworski LLP
Market Square
801 Pennsylvania Avenue, NW
Washington, DC 20004-2623
+1 202 662 4795 (o)
+1 240 486 6511 (m)
Speaker Wilson Ang
Partner, Singapore
Norton Rose Fulbright (Asia) LLP
Wilson Ang is a dispute resolution lawyer based in Singapore. He heads up the
Singapore regulatory compliance and investigations practice.
He focuses on advising corporations on business ethics and anti-corruption
compliance programs, conducting anti-corruption due diligence reviews and
handling internal investigations involving bribery, fraud, economic sanctions and
financial services regulatory violations in the Asia Pacific region.
Wilson qualified as an Advocate and Solicitor in Singapore, was admitted to the
Solicitors’ Roll of England and Wales and qualified as a Solicitor in Hong Kong. He
became a Solicitor-Advocate and was awarded higher rights of audience in England
and Wales.
Wilson was mentioned in Chambers Asia-Pacific 2011 as providing “niche
capabilities on high-end inter-jurisdictional fraud cases,” and awarded the title of
“2011 Anti Corruption Lawyer of the Year in Singapore” by Corporate INTL
Magazine. Chambers Asia-Pacific 2012 referred to the dispute resolution team as
having “developed a significant practice in internal fraud investigation and corruption
related matters” while its 2013 edition highlighted our “experience in handling
financial institutions and compliance issues”. Legal 500 Asia-Pacific 2013 stated
that “Wilson Ang covers disputes involving financial institutions and is well known for
his capabilities in business ethics, and regulatory compliance and anti-corruption
matters”. Chambers Asia-Pacific 2014 highlights our “specialist expertise in handling
anti-corruption, energy, financial and transport issues”.
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Norton Rose Fulbright (Asia) LLP
One Raffles Quay
34-02 North Tower
Singapore 048583
+65 6309 5392 (o)
+65 8339 0743 (m)
Speaker Sun Hong
Partner, Shanghai
Norton Rose Fulbright LLP, Shanghai
Sun Hong is a partner of the Shanghai office. She qualified in China in 1999 and
had worked for four years in the legal affairs office of a local government and five
years with PRC local law firms (practising litigation and corporate matters) before
she joined Norton Rose Fulbright in 2006.
Sun is very familiar with the regulatory regime of China through her post
qualification legal practice in both government bodies and domestic and
international law firms. She has advised multinationals on a wide range of regulatory
and compliance issues in China, conducted internal investigations, delivered
trainings in Chinese and English and provided tailored and strategic advice to
clients covering a variety of industry sectors. Sun has in-depth insight into the legal
system of China and the compliance risks encountered by multinationals doing
business in China, which makes her well positioned to advise clients on practical
solutions to address compliance risks and to deal with difficult issues when arisen.
Sun Hong has been listed by Chambers China 2014 as a notable practitioner, as
having “considerable knowledge of PRC regulatory matters, and is recommended
by clients for her practical and pragmatic approach”.
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Norton Rose Fulbright LLP
27F, Plaza 66 II
1266 Nanjing Road West
Jing An District
Shanghai 200040
+86 21 6137 7020 (o)
+86 1590 079 5878 (m)
Speaker David Lee
Partner, Hong Kong
Norton Rose Fulbright (Hong Kong) LLP
David Lee is a disputes and investigations lawyer based in Hong Kong.
David specialises in disputes and regulatory investigations involving financial
institutions and listed companies. He has wide experience of acting for clients in
cases before the High Courts in Hong Kong and England and Wales as well as
representing clients in HKMA, SFC, HKSE and ICAC investigations in Hong Kong
and investigations by the US DOJ/SEC and UK FCA, SFO and other agencies
internationally.
David has particular experience of cross-border disputes involving complex financial
products as well as securities and anti-corruption investigations. David’s
investigations experience has led to him being instructed by clients on compliance
issues such as designing and implementing anti-corruption policies and procedures.
David has undertaken secondments in the litigation departments of two global
banks. During those secondments, he worked on a wide range of disputes for the
consumer and wholesale arms of each bank and managed a portfolio of disputes
across Asia.
David leads our Regulatory & Investigations group in Hong Kong and is named as a
recommended individual in the Asia Pacific Legal 500. David joined our commercial
and banking dispute resolution team in 2004 and moved to Hong Kong office in
2011.
9
Norton Rose Fulbright Hong Kong
38/F Jardine House
1 Connaught Place,
Central Hong Kong
+852 3405 2310 (o)
+852 6463 8207 (m)
PwC
Speaker Sean Joyce
Principal, PricewaterhouseCoopers
Sean M. Joyce is a Principal in PwC’s Advisory Practice, where he specializes in Strategic, Risk
and Management Consulting, Cyber, Crisis Management, and Technology. Prior to joining PwC in
December 2013, he was appointed Deputy Director of the FBI in September 2011, with oversight
of 36,000 employees and an 8 billion dollar budget. With more than 26 years of service in the FBI,
Mr. Joyce brought a wide range of operational and leadership experience to this assignment.
Mr. Joyce spearheaded several strategic initiatives as Deputy Director of the FBI including “Next
Generation Cyber” which was a cross-organizational initiative to maintain the FBI’s world
leadership in law enforcement and domestic intelligence. He also established a framework to
operate and evaluate the FBI’s 56 domestic field offices. Mr. Joyce has managed sensitive
corruption investigations of Fortune 50 corporations, congressional members, Federal, state, and
local officials..
Mr. Joyce is a 2013 recipient of the Director of National Intelligence Distinguished Service Medal,
the CIA Director’s Award, the DIA’s Director Award, the FBI Meritorious Service Medal, and the
2011 Presidential Rank Award—the nation’s highest civil service award. He was a member of the
International Association of Chiefs of Police (IACP) Executive Committee, previously serving as
chairman of the IACP Committee on Terrorism, and served on the Intelligence and National
Security Alliance’s Homeland Security Intelligence Council. Mr. Joyce met regularly with
congressional leaders, senior members of the White House National Security team, Cabinet
officials, and briefed the President of the United States on several occasions. Also, on a routine
basis, he met with visiting dignitaries from nations throughout the world. He has traveled
extensively throughout the world and presented on various matters related to National Security,
Corruption, Counterterrorism, Intelligence, and Law Enforcement.
A Boston native, he holds degrees from Boston College and Dartmouth’s Amos Tuck School of
Business.
1800 Tysons Boulevard
Mclean, VA 22102-4261
703.918.3528 (o)
United States/United Kingdom Richard Smith, Head of Regulatory and Governmental Investigations,
United States – Partner, Washington DC
Fulbright & Jaworski LLP (Norton Rose Fulbright)
July 15, 2014
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Extraterritoriality
• US FCPA
– Covers US citizens and US-based businesses (i.e., organized under the laws of a US state or having a principal place of business in the US) and their employees regardless of where the conduct occurs
– This includes conduct by third parties done on behalf of the US citizen or business
– Covers “issuers” (i.e., traded on a US exchange) and their employees regardless of where the conduct occurs
– This includes conduct by third parties done on behalf of the US citizen or business
– Covers non-US persons and businesses if they are in the US or use US mails or any means or instrumentalities of interstate commerce in furtherance of the improper conduct
– Applied very broadly and recent sanctions settlement indicates limited use (e.g., use of bank wires) will still cause regulators to pursue a case
– Regulators have used conspiracy and aiding and abetting to charge non-US companies if jurisdiction for substantive FCPA violation is weak or lacking
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Extraterritoriality (cont.)
• UK Bribery Act
• Bribery Offenses
• Covers conduct committed in the UK and conduct that retains a “close
connection” to the UK
• For conduct in UK, nationality for individual or place of incorporation for
business is irrelevant
• UK citizens and business incorporated in UK have a “close connection” to the
UK and their conduct anywhere in the world is covered by the Bribery Act
• Failure to Prevent Bribery Offenses
• If a company conducts any part of its business in the UK (regardless of where
the company is incorporated), “associated persons” (e.g., employee or agent)
can create liability under the Bribery Act, regardless of the associated
persons’ connection to the UK
• Companies do have the “adequate procedures” defense in these cases
13
International Cooperation
Until 2005, there was minimal international foreign corruption enforcement
• Since 2005, the countries that have brought foreign bribery prosecution actions have included:
Argentina, Australia, Belgium, Bulgaria, Canada, Denmark, Finland, France, Germany, Hungary, Italy,
Japan, South Korea, the Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom
Also, there is a trend toward more and more international cooperation in investigating bribery
activities. In press releases regarding FCPA enforcement actions, the DOJ recognizes
international agencies for their assistance
• Since 2011, the DOJ has credited authorities in Germany, France, Indonesia, Italy, Switzerland, the
United Kingdom, Mexico, Greece, Hungary, Macedonia and Panama for their roles in enforcement
actions
In 2013, the SEC, DOJ, and FBI hosted the first Foreign Bribery and Corruption Training Conference with
representatives from law enforcement and regulatory agencies from over 50 countries
As international regulators increase cooperation, companies facing potential violations must
consider the need for a global resolution
• Enforcement agencies regularly share information and investigatory methods
• A disclosure in one jurisdiction may lead to issues in other jurisdictions
14
Interacting with Foreign Regulators
• Communication among foreign regulators has increased dramatically
• Mutual Legal Assistance Treaties
• Allow for exchange of evidence and information in criminal and related matters
• US has over 50 MLATs in place (including with Hong Kong)
• US and China have entered into Mutual Legal Assistance Agreement that provides for
mutual assistance in service of documents and in investigation and taking evidence as
well as assistance in freezing, seizure and forfeiture proceedings
• Securities and Exchange Commission
• SEC has variety of international enforcement assistance and cooperation mechanisms
• The most common are Memoranda of Understanding, which can include enforcement
or supervisory cooperation
• When handling multi-jurisdictional investigations or regulatory actions, consider
disclosure to one regulator to be the same as disclosing to all relevant regulators
• Any settlement should be global in nature
15
China Sun Hong, Partner, Shanghai
Norton Rose Fulbright LLP, Shanghai
July 15, 2014
16
China
• Ranked 80 out of 177 countries on the Transparency International Corruption Perceptions Index (2013)
• Ranked 27 of the 28 countries on the Transparency International Bribe Payers Index (2011)
• The world’s 2nd largest economy
• 1st largest population in the world
17
Legal Overview - China
• A criminal offence of active bribery may fall within any of the following:
Official bribery: bribe is given to “state functionaries” or state organs, state-owned enterprises/institutions or people’s organisations
Commercial bribery: bribe is given to “non-state functionaries”
Bribing foreign public officials: bribe is given to foreign public officials or officials of international public organisations (since 2011)
• Non-criminal commercial bribery is subject to administrative penalties
• Two types of offenders
Individuals
Units (e.g. state organs, enterprises, institutions or organisations)
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Giver Recipient Monetary
threshold
Other elements to be
considered in the context of
official bribery
Criminal penalties
Individual Individual ≥RMB10,000 1. Bribe is given in return for
illegal benefits;
2. Bribe is given to more than
three people;
3. Bribe is given to
government, Party or judicial
officials; or
4. Serious losses have been
caused to the State or social
interest.
Official bribery: up
to life imprisonment
Commercial bribery:
up to ten years
imprisonment
plus
fines/assets
confiscation
Individual Unit ≥RMB100,000
Unit Unit ≥RMB200,000
Unit Individual ≥RMB200,000
Legal Overview – China (cont.)
• Monetary thresholds triggering criminal prosecution
• No monetary threshold for a non-criminal commercial bribery
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Legal Overview – China (cont.)
• Major enforcement authorities:
− Ministry of Public Security
− Supreme People’s Procuratorate
− Supreme People’s Court
− State Administration for Industry and Commerce
− CPC Central Commission for Discipline Inspection
− Ministry of Supervision
• Enforcement actions
− Since December 2012, over 30 senior officials (ministerial level) have been investigated amongst 480 government officials investigated/disciplined across the country
− In the first half of this year, 330 government officials have been investigated or disciplined
− GSK China is facing formal prosecution after investigations concluded
20
Legal Overview – China (cont.)
Data privacy law in China
• High profile case
Peter Humphrey of ChinaWhys (British) – detained subject to criminal charge (2013)
• High level summary of the legal position
− No unified national legislation and therefore rules are scattered
− No clear definition is given, hence regulators can exercise discretion
− Prior consent of data subject is likely to be needed when collecting personal information or providing the same to a third party
• Key points to note in investigations
− Engaging the right people to do things in the right manner
− Seeking case by case consent when appropriate
− Relying on provisions of the employment contract/employee handbook or the IT policies if possible
− “Filtering” out suspected personal information from the scope of review
21
Legal Overview – China (cont.)
Commercial secrets law in China
• Court case
Stern Hu of Rio Tinto (Australian) – 10 years imprisonment (2010)
• Definition of commercial secrets
Relatively clear
• May be a criminal offence if
− Information concerned qualifies as “commercial secrets”
− Commercial secrets are obtained/disclosed/used/allowed to be used improperly
− Serious losses (Rmb 500,000 or more) are caused to the owner
• Key points to note in investigations
− Limit the team having access to the information
− Enter into confidentiality agreements with each employee and third party advisor(s)
− Be mindful of and compliant with contractual obligations
22
Legal Overview – China (cont.)
State secrets law in China
• Court case
Xue Feng of IHS (American Chinese)– 8 years imprisonment (2010)
• Definition of state secrets:
Vague and uncertain
• Major risks
− Commercial information of SOEs may fall within the ambit of “state secrets”
− Providing such information to a third party or transferring the information outside of China may breach Chinese law
• Key points to note in investigations:
− Assess the risks
− Establish review facilities and conduct the review within China
− Take legal advice before providing any such information to teams/advisors/regulators outside of China
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FCPA/UKBA Comparison - China
• Facilitation payments
There is no “facilitation payments” exception under Chinese law
• Commercial bribery and official bribery
Chinese anti-corruption law tackles “commercial bribery” - corrupt dealings between private companies and private individuals, as well as “official bribery” – corrupt dealings with governments and “state functionaries”
• Receivers and givers of bribes
Chinese anti-corruption law extends criminal liability to receivers of bribes as well as givers of bribes
• Domestic and foreign public officials
Chinese law makes it an offense to bribe both domestic and foreign public officials (introduced in 2011)
24
FCPA/UKBA Comparison - China (cont.)
• “Books and records” requirements
Breach of laws on books and records (e.g. maliciously destroying accounting books and records) may constitute a criminal offense
• Reward to whistleblowers
China does not have a unified whistleblower-reward system but there are various rules issued by different regulators (e.g. state tax authority, Supreme People’s Procuratorate) granting rewards to credible whistleblowers
• Adequate procedures
“Adequate procedures” is not a defense by itself but may be considered by enforcement authorities in the determination of corporate liabilities
25
Risks - China
Suppliers
Procurement/
Government
risks • Kickbacks
• Fake warranty claims
• Inventory “losses”
• Conflicts of interest
Sales risks
Intermediaries Customers
• Bribery by proxy
• Fraud / Embezzlement
• Extortion by proxy
• Reverse kickbacks
• Gifts and entertainment
• Hospitality
• Commercial bribery
• Excessive discounts
Organisation
• Internal corruption
• Fraud / embezzlement
Government
• Official bribery (Licensing)
• Facilitation payments
• Extortion
• Public procurement
• Bribery offences
by proxy
Internal risks
M&A Targets
• Lack of acquisition due diligence
• Acquisition of liabilities
• Lack of internal controls / cultural
gap
26
Cultural Challenges - China
• Business in China has historically involved a lot of entertainment and gift giving
• Agents and distributors are widely used
• Corporate parents abroad are often not fully attuned to the operational details at the subsidiary level in China and to the activities of agents or distributors
• Kickbacks are common in the procurement and purchasing functions
• The Chinese government owns a considerable section of the economy, especially in certain sectors, making business contacts in those sectors “government officials”
• Restrictive regulatory regime requiring frequent interface with government officials
• Regulatory and tax avoidance by privately-held domestic companies (issues to watch for in acquisition due diligence)
27
Hong Kong David Lee, Partner, Hong Kong
Norton Rose Fulbright (Hong Kong) LLP
July 15, 2014
28
Hong Kong
• Ranked 15 out of 177 countries on the Transparency International Corruption Perceptions Index (2013)
• Financial, transport, and business hub for Asia Pacific, in particular North Asia and as an offshore centre for China
• Management headquarters within the region
– Senior officers and managers of companies with operations throughout the region are often based in Hong Kong
– Hong Kong is the base in which decisions about allocation of funds and operations are made
• Financial Centre
29
Legal Overview – Hong Kong
• Prevention of Bribery Ordinance (POBO)
• Organized and Serious Crimes Ordinance (OSCO)
• Drug Trafficking (Recovery of Proceeds) Ordinance (DTROP)
• United Nations (Anti-Terrorism Measures) Ordinance (UNATMO)
• Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO)
30
Legal Overview – Hong Kong (cont.)
POBO
• Public sector bribery offences under the POBO include carrying out the following acts without lawful authority or reasonable excuse:
– offering an advantage, whether in Hong Kong or elsewhere, to a public servant as an inducement or reward for performing or abstaining from performing any act in his capacity as a public servant (s 4(1))
– as a public servant, soliciting or accepting an advantage as an inducement or reward for peforming or abstaining from performing any act in his capacity as a public servant (s 4(2))
– offering an advantage to a public servant as an inducement or reward for giving assistance in procuring any contract with a public body (s 5(1))
– as a public servant, soliciting or accepting an advantage as an inducement or reward for giving assistance in procuring any contract with a public body (s 5(2))
– offering any advantage to any public servant employed by a public body while having dealings of any kind with that public body (s 8(2))
31
Legal Overview – Hong Kong (cont.)
POBO
• Private sector bribery offences under the POBO relate to corrupt transactions with agents and include carrying out the following acts without lawful authority or reasonable excuse:
– offering an advantage to an agent without the permission of his principal, in connection with the agent’s performance or abstaining from performance of any act in relation to his principal’s affairs or business (s 9(2))
– as an agent, soliciting or accepting an advantage without the permission of his principal, in connection with his performance of any act in relation to his principal’s affairs or business (s 9(1))
32
Legal Overview – Hong Kong (cont.)
POBO
• Elements of POBO bribery offences
– “Advantage” is broadly defined to include any gift, loan, fee, reward, commission (consisting of money, valuable security, property or interest in property), office, employment, contract, loan payment, service or favour (other than entertainment)
– “Entertainment” is defined as the provision of food or drink for consumption on the occasion when it is provided and of any other entertainment connected with or provided at the same time as the food and drink
– “Prescribed officer” is defined to mean any person holding an office of emolument, whether permanent or temporary, under the Government and any other persons stated in the POBO
– “Public servant” is defined to mean any prescribed officer and any other employee of a public body. The POBO details a large number of bodies which are considered “public”; these include a number of private companies or entities that carry out a public function in Hong Kong
33
Legal Overview – Hong Kong (cont.)
POBO
• POBO penalties
– Penalties for offences under the POBO range from fines of HK$100,000 to HK$1 million and imprisonment from one year to ten years
– The sentencing court shall also make an order for the convicted to make repayment of the whole or partial amount or value of the advantage
– The Hong Kong courts have advocated the need for deterrent sentences, which means that immediate custodial sentences are normal
– There are also penalties for failing to cooperate with the ICAC involving fines and/or imprisonment
34
FCPA/UKBA Comparison – Hong Kong
• Like the UKBA, the POBO applies to “commercial bribery” - offer or
acceptance of any advantage by an agent in relation to the performance of
any act in relation to the performance of the principal's affairs
• Like the UKBA, the POBO extends criminal liability to the receiver of the
bribe, as well as the giver of the bribe, unlike the FCPA
• The POBO does not include an FCPA-style “books and records” offense, but
Hong Kong businesses are subject to requirements for accurate accounting
provisions contained in other legislation, including the Companies Ordinance
• The POBO contains a “no intent” offence – offer of any advantage to any
public servant employed by a public body while have dealings of any kind with
that body
• Unlike the FCPA, the POBO is similar to the UKBA in that it does not allow
“facilitating payments”
• The POBO contains no express corporate offence and it is evidentially difficult
to prove corporate criminal liability compared to the FCPA and UKBA
• No legal role for a compliance program under the POBO
35
Risks – Hong Kong
• Low corruption city in high corruption region
• Reputation as money laundering center
• Risks associated with China businesses
• Complaint culture
• Contagion risks
36
Cultural Challenges – Hong Kong
• Gift giving culture
• Lack of sensitivity to corruption issues
• Unwillingness to raise concerns
37
Singapore Wilson Ang, Partner, Singapore
Norton Rose Fulbright (Asia) LLP
July, 15, 2014
38
Singapore – Overview
• Ranked 5 out of 177 countries on the Transparency International Corruption Perceptions Index (2013)
• Financial, transport, and business hub for Asia Pacific, in particular Southeast Asia.
• Management headquarters within the region
– Senior officers and managers of companies with operations throughout the region are often based in Singapore
– Singapore is the base in which decisions about allocation of funds and operations are made
• Strategic stopover point for ship and goods in transit
• Financial Centre
– Funds and accounts are maintained in Singapore banks
39
Legal Overview - Singapore
Prevention of Corruption Act (PCA)
• Public and private offences of active and passive bribery by both individuals and companies (s 5)
• Agency bribery offences involving either the corrupt offer to, or acceptance of, gratification by an agent in relation to the performance of the principal’s affairs or for the purposes of misleading that principal (s 6)
• Prohibition on bribery of domestic public officials
– Active and passive bribery in relation to Members of Parliament (s 11)
– Bribery offences in respect of any “member of a public body” (s 12)
– Offence in relation to offering or accepting gratification in relation to Government tenders (s 10)
• Extraterritorial effect – bribes made outside of Singapore by a Singapore citizen are dealt with as if the bribe took place in Singapore (s 37)
• No reference to corporate compliance programs
• No facilitation payment exception
40
Legal Overview – Singapore (cont.)
PCA – Presumption of Corrupt Intent • Section 8, PCA:
Where in any proceedings against a person for an offence under [the PCA], it is proved that any gratification has been paid or given to or received by a person in the employment of the Government or any department thereof or of a public body by or from a person or agent of a person who has or seeks to have any dealing with the Government or any department thereof or any public body, that gratification shall be deemed to have been paid or given and received corruptly as an inducement or reward as hereinbefore mentioned unless the contrary is proved.
• Section 9, PCA: If a person accepted gratification corruptly to do or forebear to do anything, he is guilty even if he was not in a position to carry out his role
Where in any proceedings against any agent for any offence under [the PCA], it is proved that he corruptly accepted, obtained or agreed to accept or attempted to obtain any gratification, having reason to believe or suspect that the gratification was offered as an inducement or reward for his doing of forbearing to do any act or for showing or forbearing to show any favour or disfavour to any person in relation to his principal’s affairs or business, he shall be guilty of an offence under that section notwithstanding that he did not have the power, right or opportunity to do so…
41
Legal Overview – Singapore (cont.)
PCA – Test of Corporate Intent for Corruption
• Corporate liability may be imposed on companies for crimes committed by their employees or agents if the individual who committed the crime can be regarded as the “embodiment of the company” or whose acts are “within the scope of the function of management properly delegated” to him or her
42
FCPA/UKBA Comparison - Singapore
• Unlike the FCPA, Singapore laws are similar to the UKBA in that “facilitating
payments” are not allowed
• Like the UKBA, Singapore laws apply to “commercial bribery” – corrupt
dealings between private companies and private individuals – as well as
dealings with governments and public sector entities, which is broader than
the FCPA
• Singapore laws, like the UKBA, extends criminal liability to the receiver of the
bribe, as well as the giver of the bribe, unlike the FCPA
• Evidentially difficult to prove corporate criminal liability for bribery (cf.
ML/TF), compared to the FCPA and UKBA. Prosecutions focus on
individuals
• In proving corrupt intent, there are certain legal presumptions which apply in
public sector bribery
• No legal role for a compliance program under Singapore law – although the
violation of internal codes and procedures would be evidence of corrupt
intent
43
Risks and Cultural Challenges - Singapore
• Gifts and Entertainment – Gratification broadly defined
• Procurement is risky, particularly in the IT sector
• Conflict of interests viewed as a form of corruption by authorities
• Money-Laundering and Terrorist Financing risks
– Ranked by the International Monetary Fund as one of the 25 systemically important financial centres in the world, Singapore’s openness as an international financial centre and transport hub with a high volume of transactions and wide international reach exposes it to inherent ML/TF risks, the bulk of which originate overseas
– Heavy scrutiny because management, finance and legal functions are located in Singapore
44
Indonesia Wilson Ang, Partner, Singapore
Norton Rose Fulbright (Asia) LLP
July, 15, 2014
45
Indonesia – Overview
• Ranked 114 out of 177 countries on the Transparency International Corruption Perceptions Index (2013)
• Important economy for oil and gas, commodities, minerals
• 4th largest population in the world
46
Legal Overview - Indonesia
• Law No. 31 of 1999 on the Eradication of Crimes of Corruption, as amended by Law No. 20 of 2001
– Primary objective to regulate and prevent public officials from corrupt acts
– Articles 2 and 3 make it an offence to bribe to obtain profit for oneself, another person or a corporation or to abuse the authority, facilities or other means available as a result of one’s rank or position in a manner that is detrimental to state finances or national economy
– Articles 5, 6 and 12 prohibit the bribery of domestic public officials through:
(a) giving or promising any gratification with the aim of persuading the public official to do anything because of his position and in violation of his obligation; or
(b) because of or in relation to something in violation of his obligation, whether or not it is done
– Article 13 makes it an offence for public officials to abuse their authority by giving presents or making promises that may cause losses to state finances or the national economy
– Extraterritorial Application: Article 16 provides that any person or corporation outside of the jurisdiction of the Republic of Indonesia committing corruption will be sanctioned to the same degree as any person or corporation committing corruption within the Indonesian jurisdiction
47
FCPA/UKBA Comparison - Indonesia
• Unlike the FCPA, Indonesian laws are similar to the UKBA in that “facilitating
payments” are not allowed
• Indonesian laws only prohibit public domestic bribery, not private corruption –
different from FCPA and UKBA
• Indonesian laws, like the UKBA, extends criminal liability to the receiver of the
bribe, as well as the giver of the bribe, unlike the FCPA
• Definition of bribery in Indonesia broad and includes creating “losses to the state
finance or state economy”
• No legal role for a corporate compliance program under Indonesian law, unlike
the FCPA or UKBA
• Extortion may be easier to prove in Indonesia than in the US or UK
48
Risks and Cultural Challenges - Indonesia
• Use of many intermediaries and wrong perception that ignorance of third party conduct can be a defence
• Pervasive gift-giving culture
– Gift-giving is part of the Indonesian culture and many Indonesians may consider it offensive if they refrain from giving gifts.
• Facilitating payments
– Significant reliance on facilitating payments to expedite transactions.
• Misplaced expectation by agents and employees that bribes will be reimbursed by the company and brokers want inflated commissions paid by their principles
• The “Indonesian Way”
– Misconception that while foreigners may be subject to foreign anti-bribery laws, local Indonesians are free to complete business transactions and develop relations according to local customs, sometimes using bribery, without repercussions on the company
49
Compliance
50
Developing a Global Program
DOJ/SEC Guide Compliance Components:
• Tone at the Top: Board of directors and senior executives consider compliance a
top priority and properly communicate this throughout organization
• Code of Conduct and Appropriate Policies and Procedures: Written code of
conduct, policies and procedures in clear/concise language and translated as
appropriate
• Oversight, Autonomy, and Resources: Senior executive, with sufficient authority,
autonomy (including access to the board or appropriate board committee) and
independence to manage and implement program
• Risk Assessment: Consider risk profile when implementing a compliance
program and assign resources appropriately
• Training and Continuing Advice: Disseminate information about program through
proactive communications, including periodic update trainings
51
Developing a Global Program (cont.)
• Incentives and Disciplinary Measures: Evenly and consistently apply at
all levels and apply discipline reliably, promptly and commensurate with
the violation
• Third Party Due Diligence and Payments: Based on qualifications and
associations of third party; company should fully understand and monitor
the business rationale for third party; continuous and ongoing exercise
• Confidential Reporting and Internal Investigations: Process that allows
employees and third parties to report potential policy or law violations on
a confidential basis and include anti-retaliation provisions
• Periodic Testing and Review: Continually test and review program to
ensure effective and appropriate in light of the company’s current risk
profile
52
Developing a Global Program (cont.)
Compliance Strategies:
• Regularly review and revise corporate compliance program (policies, procedures, due diligence process, training, etc.)
– As necessary, update the compliance program in light of recent legal developments
• Require company management (e.g., compliance, legal) to brief the board regularly (i.e., at least twice a year) on compliance efforts, potential anti-corruption issues, and corporate action in relation to those issues
– Review the company’s responses to hotline complaints, especially in light of Dodd-Frank
• Ensure that the internal audit team includes specific anti-corruption procedures as part of its normal auditing procedures
– Ask the company’s outside auditors to review and approve the internal audit procedures
53
Developing a Global Program (cont.)
• For potential mergers and acquisitions, apply rigorous pre-
acquisition due diligence, especially as related to anti-
corruption for any international acquisitions
–As necessary, use post-acquisition due diligence to confirm pre-
acquisition findings and to follow-up on any red flags
• Implement rigorous compliance training for all employees
–Require training to be provided to third parties as appropriate (e.g.,
sales agents involved with government contracts, customs agents)
• When expanding internationally, consider the IT impact such
as data privacy and employment law issues
54
Compliance - Local Challenges in Asia
• Developing a Global Program
– Third party agents and local partners: access to markets, local culture
– Gifts and entertainment: use thresholds, gift registers and/or catalog of permissible gifts, consider balance of power in relationships
– Facilitation payments: risk-based approach
– targeted training, how to handle solicitation and building in time buffers
– Reticence in whistleblowing – local language
– Conflict of interests:
– Internal financial controls, especially petty cash control
– Correcting misconception that locals are free to resort to using bribery
– Awareness of ML/TF risks
– Understanding of cultural challenges in region
55
Investigations
Allows company to determine the scope of potential problem and
proactively demonstrate to third parties the company’s commitment
to compliance and desire to remediate
The board, or appropriate board committee, should receive regular status
updates about the investigation
Initiated as soon as the company has reason to believe a problem may
exist and typically includes
• Retain experienced outside counsel, and if needed, outside forensic accountants,
who report directly to Board of Directors or Audit Committee
• Cease potentially problematic conduct and preserve evidence
• Formulate a properly scoped investigative plan
• Consider voluntary disclosure to DOJ/SEC and applicable securities laws
disclosure obligations
• Consider modifications to compliance program
• Document all investigative steps and privilege preservation
56
Investigations - Local Challenges in Asia
• Investigations
– Data privacy, state secret issues
– Legal privilege
– Employment laws
– Local language and lingo in various communication media
– Twitter/Weibo, Google/Baidu, BBM/QQ
57
Sean M. Joyce, Principal Forensic Services July 15, 2014
www.pwc.com
Navigating Due Diligence and Internal Investigation Challenges in China
PwC
Agenda
59
01
02
03
04
Factors Contributing to Corruption Risk in
China
Mitigating Risk through Due Diligence
Challenges Conducting Due Diligence in China
Challenges with Internal Investigations in China
Factors Contributing to Corruption Risk in China 01 Mitigating Risk through Due Diligence 02 Challenges with Due Diligence in China 0 3
Challenges with Internal Investigations in China 0 4
PwC
Factors Contributing to Corruption Risk in China
60
Environmental/Cultural Factors
Key Observations
• Proliferation of state owned / related enterprises
• Business heavily dependent on relationships
• Varied quality of business partners
• “Gifts” / “gratuities” common
• Cultural reluctance to question “bosses” activity
• Collusion with friends
Organizational Factors
Key Observations
• Absentee / remote stakeholders
• Lack of oversight / communication / control
• Risky JV agreements
• Ineffective checks and balances
• Under investment in compliance and monitoring program
• Failure to use a proper model for compliance of Drive Centrally, Monitor Regionally, and Execute Locally
• Inexperienced management
Control Threats
Key Observations
• Strong / larger than life / charismatic personalities – the founder, the boss, the majority shareholder, the party member
• Lack of segregation of duties
• Offshore or remote locations
• Knowledge of back office / operations
• Pressure to perform
PwC
Factors Contributing to Corruption Risk in China
61
• Chinese operations are key focus of many regulators
• Pervasive SOEs
Global Regulatory
Scrutiny
• AC is key political issue
• PRC Criminal Law
• PRC Anti-Unfair Competition Law
Increased Domestic
Enforcement
• Criminal fines/confiscation of property (up to all assets)
• Disgorgement of profits
• Possible life imprisonment
Severity of Potential Penalties
Key Takeaway Companies should conduct thorough due diligence to mitigate risks, and be prepared to conduct internal investigations in response to potential transgressions.
PwC
Mitigating Risk through Due Diligence
Medium/Higher-Risk DD Procedures
• Searches for corporate affiliations from records at relevant State Administration of Industry and Commerce (AIC) entities (as publicly available);
• Searches of online Chinese-language litigation databases that contain abstracts of civil and criminal litigation (limited availability), as well as nationwide judgments;
• Research of central and local-level regulators, including the China Securities Regulatory Commission, industry regulators and the AIC;
• English and Chinese-language searches of various databases and online sources covering mainstream press and trade publications, as well as papers local to where the subject is located;
• Verification of professional licenses and checks for any disciplinary actions taken relating to the license;
• Searches in comprehensive Global Risk & Compliance databases; and
• Discreet, reputational source inquiries.
Lower/Medium-Risk DD Procedures
• Online database inquiries in English and Chinese of certain business information, individual profile, professional profile/business activities, financial profile and corporate affiliation information.
• Local and international online press database searches in English and Chinese, as well as Chinese-language publications and open sources such as internet message boards; and
• Global Risk & Compliance databases.
62
PwC
Challenges for Due Diligence in China
63
Apparent ban on private investigation by Ministry of Public Security – may need to hire local “market research” companies
Accuracy and reliability of data in online databases and public records is inconsistent
Potential for public record tampering by the Chinese government
Difficulty in discerning state participation and influence in corporations
Heavy reliance on human source information – takes time and resources to develop networks
Large population size and commonality of corporate and individual names (need multiple identifiers)
Key Takeaway Accessing accurate and reliable information will not be easy – business decisions will likely have to be made based on incomplete information.
PwC
Challenges for Internal Investigations in China
64
Pervasive presence of government and SOEs in economy heightens state secrets risks
Broad definition of “state secrets” - includes info related to state security and national interests (Art. 2), and “all other matters” as determined by the government (Art.8) Government can retroactively declare state secrets
Very little guidance available on what constitutes a state secret
Penalties include criminal fines, confiscation of assets, and prison terms. Also potential for capital punishment
Receiving clearance from government officials to export sensitive information is unlikely to happen in reasonable timeframe, if at all
Key Takeaway Avoid exporting information before thorough review conducted. Store data on local servers and work with knowledgeable local counsel to determine potential state secrets violations.
State Secrets
PwC
Cautionary Tales
65
U.S. geologist sentenced to 8 years in
prison for violating state secrets law
US geologist Xue Feng was arrested in 2007 for allegedly stealing state secrets. In July 2010 he was sentenced to 8 years in jail and fined RMB 200,000 for negotiating the sale of a PRC industry database to his US employer IHS Energy. The National State Secrets Bureau declared the information collected by Feng as a state secret several years after he had acquired it and seven weeks after he had been arrested and jailed.
Australian employee sentenced to 10
years in prison for corruption and theft
of state secrets
Stern Hu, an Australian employee of mining company Rio Tinto, was arrested in 2009 for stealing state secrets. In March 2010 he was sentenced to 10 years in jail and fined RMB 500,000 for accepting bribes and stealing “secrets” related to iron ore bid prices, negotiation information and output production plans
British corporate investigator and wife on trial for theft of state secrets
Peter Humphrey, a corporate investigator hired by GlaxoSmithKline to conduct due diligence inquiries into a former employee and allegations of corruption has been arrested and detained in Shanghai for violating China’s state secrets law. Humphrey and his wife, Yu Yingzeng, are currently being held pending a closed trial in August 2014.
State Secrets
PwC
Challenges for Internal Investigations in China
66
1 2 3
No right to telecommunications privacy from the government – attorney-client privilege does not exist vis-à-vis the government
Broad / vague right to privacy of telecommunications material (e.g. emails) from any entity except the government – expect resistance to disclosure by Chinese employees
Effectiveness of company-mandated employee agreements requiring disclosure of employee data are largely untested in China
Further Complications: Data Privacy
Don’t forget Cyber-security… Due to sensitivity of corruption in China today be prepared for government attempts to obtain information gathered through investigations – take precautions to secure data with appropriate cyber-security measures.
PwC
Challenges for Internal Investigations in China
67
1 2 3
Accounting Archives Management Measures and Archives Law prohibits entities from exporting “accounting archives” from China
Scope of prohibition unclear, includes “professional accounting materials,” but also financial reports and bank statements
Accounting archives prohibition extends to exporting duplicate records
Further Complications: Accounting Archives
Appendix
68
China
69
Crackdown on corruption in the pharmaceutical sector
• Different perceptions of reasons for the crackdown
− Regulators’ motivation of cutting down high drug prices and easing the confrontation between doctors and patients
− Obvious targets given the notorious industry-wide corruption
− Maximizing the anti-corruption visibility, influence and power
− “Unfair cherry picking” of foreign players
• GSK China investigation
− The largest anti-corruption investigation involving a foreign company’s operation in China
− 35 defendants including GSK China, its executives, distributors, travel agency, government officials and doctors
− Charges against GSK include:
o bribery of non-public officials
o active bribery by an entity
o active bribery of an entity
− Potential formal criminal prosecution
70
Crackdown on corruption in the pharmaceutical sector • Messages relayed from the GSK case
− Enforcement agency can conduct thorough investigations covering the whole chain of sales and bribery
− Employees will blow the whistle
− Company culture matters
− Public interest driven
− Using intermediaries does not help
− Bribe may be cash or gifts (e.g. cars, televisions and cameras)
− Bribe may be given to institutions (i.e. “Units”) as well as to individuals
− Doctors are not necessarily “state functionaries” but are likely “foreign officials”
− The extent to which “PR” or “emergency response preparation” helps
− Corporate liability and/or individual (e.g. senior officers) liability
• China has become an enforcement jurisdiction on anti-corruption
71
Compliance Challenges – China
• Shortage of management talent – Shortages of managers and employees with the professional and technical skills to fill key roles are common. High turnover is the norm across most businesses
• Weak accounting and finance function – A common feature among emerging growth companies. Combined with a general shortage of management talent, this results in a general lack of transparency and visibility into operations, and tends to result in weak internal controls
• Fierce competition and overcapacity – Multinationals face both domestic competitors and other foreign multinationals ramping up operations. Competition is often greater than anticipated, particularly from the state-owned sectors
• Weak governance culture and internal controls – A weak corporate governance culture, a dearth of internal controls, and high employee turnover generate opportunities for internal fraud
• Restrictive domestic regulatory environment creating greater risks for corruption – Depending upon the business and industry, some foreign companies have to work with certain state-owned partners
72
Hong Kong
73
• Independent Commission Against Corruption (ICAC)
• Powers derived from the Independent Commission Against Corruption Ordinance and the Prevention of Bribery Ordinance
• Carries out investigations into complaints of corruption but does not prosecute
• Refers cases to the Department of Justice to prosecute
• Aggressive, high-profile approach to enforcement
• Complaint driven investigations
Enforcement Unit
74
Independent Commission Against Corruption
• Steady number of complaints received by the ICAC
The ICAC received a total of 2,652 corruption complaints in 2013, representing a decrease of 33 per cent from 2012. 65% of the complaints in 2013 were pursuable
3,450 3,427
4,010 3,932
2,652
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2009 2010 2011 2012 2013
Year
No
of
Cas
es
Corruption Complaints from 2009-2013
75
Independent Commission Against Corruption
• Number of convictions
165
235
131 127
93
0
50
100
150
200
250
2009 2010 2011 2012 2013
Year
No
of
Co
nvic
tio
ns
Corruption Convictions from 2009-2013
76
Independent Commission against Corruption
• Corruption complaints mostly in the private sector
Regarding the 2,652 corruption complaints in 2013, 62% of the cases (1,649 cases) were related to the private sector
Hong Kong Police Force
9%
Government Departments
16%
Public Bodies 7%
Private Sector 68%
Corruption Complaints by Sectors
77
Independent Commission against Corruption
• Persons prosecuted for corruption in 2013
Most of the convictions are persons from the private sector
Prosecuted Pending Convicted Acquitted Total
Government departments 4 9 2 15
Private sector 84 72 21 177
Public bodies 0 3 1 4
Private individuals
(concerning government departments)
11 3 3 17
Private individuals
(concerning public bodies)
1 6 0 7
Total 100 93 27 220
78
Organized and Serious Crimes Ordinance (OSCO)
• OSCO – key provisions
– Dealing with proceeds of crime - it is an offence if a person deals with any property knowing or having reasonable grounds to believe that it represents the proceeds of an indictable offence (S 25(1))
– Suspicious activity reporting - where a person knows or suspects that any property represents the proceeds of an indictable offence, he shall disclose that suspicion to an authorized officer (S 25A(1))
– Tipping-off: if a person knowing or suspecting that a disclosure has been made to an authorised officer, discloses to any other person any matter which is likely to prejudice any investigation which might be conducted following the first-mentioned disclosure (S 25A 5)
79
Princeling hiring
• US DOJ / SEC investigation into investment bank hiring practices – JP Morgan, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley
• Employment at banks in HK offered to relatives of officials at SOEs in exchange for corporate finance mandates
• Following media coverage, HKMA and SFC information requests and ICAC investigation
• Investment bank review of hiring policies and wider conduct in China
• China specific issue?
80
Kwok Case
• Sun Hung Kai Properties Limited is one of the largest property development companies in the world.
• Its Co-Chairmen Raymond and Thomas Kwok are being prosecuted for offering advantages to a public servant
• Rafael Hui, the former Chief Secretary (the second highest position in the Hong Kong government) is being prosecuted for misconduct in a public office
• Hui is accused of accepting rent free apartments, interest free loan and US$4.5 million in exchange for being the Kwok’s “eyes and ears” inside the government
• Trial expected to last 70 days with 82 witnesses called
• General perception that government has been too close property tycoons
• Investigation precipitated by actions of Walter Kwok?
81
Money laundering cases
Joseph Lau
• Controller of Chinese Estates Holdings and business man Steven Lo convicted of money laundering offences in Macau
• Following 2008 conviction of Ao Man-long Secretary for Public Works, led to substantial number of cases being brought
• Alleged to have paid US$2.5 million to secure development site
• Sentenced to 5 years in prison – but no extradition
Carson Yeung
• Birmingham City FC owner and property developer convicted of money laundering offences in Hong Kong
• Stock trading and gambling could not provide satisfactory account of where US$10 million came from
• Reasonable ground to believe came from dealing with proceeds of an indictable offence (s25(1) and 25(3) OSCO)
• Sentenced to 6 years in prison
82
Singapore
83
Singapore – Anti-corruption and
Anti-money laundering Legislation
1. Prevention of Corruption Act (PCA)
2. Penal Code
3. Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA)
4. Terrorism (Suppression of Financing) Act (TSFA)
84
Prevention of Corruption Act (PCA)
• Public and private offences of active and passive bribery by both individuals and companies (s 5)
• Agency bribery offences involving either the corrupt offer to, or acceptance of, gratification by an agent in relation to the performance of the principal’s affairs or for the purposes of misleading that principal (s 6)
• Prohibition on bribery of domestic public officials
– Active and passive bribery in relation to Members of Parliament (s 11)
– Bribery offences in respect of any “member of a public body” (s 12)
– Offence in relation to offering or accepting gratification in relation to Government tenders (s 10)
• Extraterritorial effect – bribes made outside of Singapore by a Singapore citizen are dealt with as if the bribe took place in Singapore (s 37)
• No reference to corporate compliance programs
• No facilitation payment exception
85
PCA – Presumption of Corrupt Intent
• Section 8, PCA:
Where in any proceedings against a person for an offence under [the PCA], it is proved that any gratification has been paid or given to or received by a person in the employment of the Government or any department thereof or of a public body by or from a person or agent of a person who has or seeks to have any dealing with the Government or any department thereof or any public body, that gratification shall be deemed to have been paid or given and received corruptly as an inducement or reward as hereinbefore mentioned unless the contrary is proved
• Section 9, PCA: If a person accepted gratification corruptly to do or forebear to do anything, he is guilty even if he was not in a position to carry out his role
“Where in any proceedings against any agent for any offence under [the PCA], it is proved that he corruptly accepted, obtained or agreed to accept or attempted to obtain any gratification, having reason to believe or suspect that the gratification was offered as an inducement or reward for his doing of forbearing to do any act or for showing or forbearing to show any favour or disfavour to any person in relation to his principal’s affairs or business, he shall be guilty of an offence under that section notwithstanding that he did not have the power, right or opportunity to do so…”
86
PCA – Test of Corporate Intent for Corruption
• Corporate liability may be imposed on companies for crimes committed by their employees or agents if the individual who committed the crime can be regarded as the “embodiment of the company” or whose acts are “within the scope of the function of management properly delegated” to him or her
87
Penal Code
The Penal Code provisions that deal specifically with the bribery of domestic public officials (sections 161 to 165) describe:
• a public servant taking a gratification, other than legal remuneration, in respect of an official act
• a person taking a gratification in order to influence a public servant by corrupt or illegal means
• a person taking a gratification for exercising personal influence over a public servant
• abetment by a public servant of the above offences
• a public servant obtaining anything of value, without consideration or with consideration the public servant knows to be inadequate, from a person concerned in any proceedings or business conducted by such public servant
88
CDSA and TSFA – Principal Obligations
Money laundering (CDSA) and terrorism financing (TSFA)
Three principal obligations:
1. not engaging in money laundering or terrorism financing
2. reporting information relating to money laundering activity or terrorism financing
3. not “tipping off” a person or entity that they may be the subject of an investigation
Individuals who violate the CDSA or the TSFA can be subject to a fine of up to S$500,000 and/or 7 years’ imprisonment, if the offender is a corporate entity, the fine may be up to S$1 million
CDSA and TSFA have extraterritorial effect and can apply outside of Singapore
89
Corruption, Drug Trafficking and Other Serious Crimes
1. Offence of assisting another to retain benefits from criminal conduct
“A person who enters into or is otherwise concerned in an arrangement, knowing or having reasonable grounds to believe that, by the arrangement . . . the retention or control by or on behalf of another . . . of that other person’s benefits of criminal conduct is facilitated (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise) . . . and knowing or having reasonable grounds to believe that that other person is a person who engages in or has engaged in criminal conduct or has benefited from criminal conduct shall be guilty of an offence”
2. Duty to disclose knowledge or suspicion
“Where a person knows or has reasonable grounds to suspect that any property
(a) in whole or in part, directly or indirectly, represents the proceeds of;
(b) was used in connection with; or
(c) is intended to be used in connection with,
any act which may constitute drug trafficking or criminal conduct, as the case may be, and the information or matter on which the knowledge or suspicion is based came to his attention in the course of his trade, profession, business or employment, he shall disclose the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable after it comes to his attention”
3. No tipping-off
Any person who knows or has reasonable grounds to suspect that an authorised officer is acting, or is proposing to act, in connection with an investigation . . . And discloses to any other person information or any other matter which is likely to prejudice the investigation or proposed investigation shall be guilty of an offence. . .
90
Terrorism (Suppression of Financing) Act
1. Offence of assisting another to retain benefits from criminal
conduct “Every person who directly or indirectly, wilfully and without lawful excuse, provides or collects
property (a) with the intention that the property be used ; or (b) knowing or having reasonable
grounds to believe that the property will be used, in whole or in part, in order to commit any
terrorist act, shall be guilty of an offence”
2. Duty to disclose knowledge or suspicion “Every person in Singapore and every citizen of Singapore outside Singapore who (a) has
possession, custody or control of any property belonging to any terrorist or terrorist entity; or
(b) has information about any transaction or proposed transaction in respect of any property
belonging to any terrorist or terrorist entity, shall immediately inform the Commissioner of
Police of that fact or information”
3. No tipping-off “Anyone who knows or has reasonable grounds to suspect that a police officer is acting, or is
proposing to act, in connection with an investigation which is being, or is about to be,
conducted under or for the purposes of this Act; and who discloses to any other person
information or any other matter which is likely to prejudice that investigation or proposed
investigation, shall be guilty of an offence and shall be liable on conviction to a fine not
exceeding $30,000 or to imprisonment for a term not exceeding 3 years or to both”
91
Test of Corporate Intent under CDSA
Corporate intent statutorily defined under:
Section 52 CDSA:
(1) Where it is necessary, for the purposes of this Act, to establish the state of mind of a body corporate in respect of conduct engaged in, or deemed by subsection (2) to have been engaged in, by the body corporate, it shall be sufficient to show that a director, employee or agent of the body corporate, being a director, employee or agent by whom the conduct was engaged in within the scope of his actual or apparent authority, had that state of mind
(2) Any conduct engaged in or on behalf of a body corporate —
a) by a director, employee or agent of the body corporate within the scope of his actual or apparent authority; or
b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent,
shall be deemed, for the purposes of this Act, to have been engaged in by the body corporate
92
Gifts and Entertainment
• No particular type of gift or gratuity is considered permissible under the PCA and the Penal Code
• No de minimis threshold
– But see Tey Tsun Hang case, where the NUS Policy on Acceptance of Gifts by Staff requires consent to be sought for all gifts over S$100.
– Government Instruction Manual refers to requirement that gifts above the S$50 threshold can only be kept if purchased from the Government.
• Domestic public officials are subject to the Instruction Manual, which details the circumstances in which gifts and entertainment can be accepted and when they must be declared.
• Instruction Manual states that all gifts need to be approved by a permanent secretary and only gifts under S$50 can be accepted. If over S$50, the civil servant must declare it and pay for it if s/he wants to keep it.
93
Definition of Gratification in Courts
• On 31 May 2013, Peter Lim, the ex-commissioner of the Singapore Civil Defence Force (SCDF), was convicted of one charge of corruptly obtaining sexual gratification from a female general manager of a vendor in the IT industry in exchange for favouring the business interests of her employer. He later admitted to seven other corruption charges for trysts with two other women, who were working for technology companies that were SCDF vendors. He was sentenced to six months in jail
• On 28 May 2013, Tey Tsun Hang, a professor at the National University of Singapore (NUS), was found guilty of six charges of corruption including two acts of sexual intercourse with, and the receipt of four gifts of varying monetary values from, one of his law students and was sentenced to five months in jail. However, this was overturned on appeal on the basis that Tey and his student were in a romantic relationship at the time
• Ng Boon Gay, the former head of Singapore’s Central Narcotics Bureau (CNB) was charged with corruptly obtaining sexual favors from a female vendor working for two information-technology suppliers in exchange for furthering the “business interests” of her company. However, he was later acquitted because the judge ruled that he was able to rebut the presumption of corruption by proving that the gratification occurred within the context of an intimate relationship
94
Conflict of interests vs Corruption?
IKEA
• The former food and services manager of Ikea furniture store, Leng, reportedly received kickbacks worth S$2.4 million in return for favoring a particular food supplier for IKEA’s restaurant. The food supplier was charged and sentenced to 40 weeks’ imprisonment
• The High Court overruled the charges, holding the case did not amount to corruption because Leng was not bribed by a third party to do the corrupt acts
• The High Court held that a charge of corruption can only be made out where there are at least three parties for a transaction to be the subject of a corruption charge: the principal whose loss is at issue, the agent whose corrupt intention is at issue, and the person or entity inducing the agent to act dishonestly or unfaithfully
• Leng had set up the company to supply food to IKEA and could not be said to have been induced
Seagate
• The Ex-director of Seagate was accused of being rewarded for helping trucking company Biforst secure contracts with Seagate
• The High Court acquitted him of all 12 charges of corruption, holding that a charge of corruption can only be made out if the "purpose of" or "reason for" the gratification was as a reward or as an inducement for the act done by the accused in relation to his principal
• The ex-director was given 20,000 shares in Biforst in 2004 and 11 payouts amounting to $576,225 between 2006 and 2010. The High Court found that the transfer of the shares and the regular payouts made were not causally related to the alleged assistance rendered by the appellant, and were therefore not proven to be inducements to or rewards for the acts
95
Money Laundering/Terrorist Financing Risk
• High risk because funds for regional operations are often kept in Singapore and Singapore’s Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) laws are strict
• Recent examples in which Singapore’s financial structures were used for the placement or integration of illicit funds:
– A woman in Singapore received approximately US$2.08 million from two men. Those funds were later determined to have been fraudulently transferred to the two men from the United States. She, in turn, remitted the funds out of Singapore, to a man in Indonesia. The woman was convicted and sentenced to 9 months imprisonment for assisting another in the retention of the benefits of criminal conduct
– The son of the former prime minister of Bangladesh transferred into Singapore bank accounts more than S$2.7 million of alleged bribes received in connection with a project to build a mooring containment terminal at a port in Bangladesh. The Singapore authorities responded to a mutual legal assistance request by Bangladesh and temporarily froze approximately US$1.9 million in assets to return to Bangladesh
96
Singapore’s efforts to control ML/TF Risks
• Recent/Proposed changes:
– Stronger regulatory control by MAS over financial institutions and other entities at risk for criminal or non-transparent financial transactions
– Amendment of regulations for financial institutions to emphasise that anti-money laundering and counter-terrorist financing obligations, in particular customer due diligence obligations, will continue to take precedence over Singapore’s newly-enacted data privacy laws
– Recent announcement by MAS that it will issue new regulations requiring cryptocurrency traders to verify the identity of customers and report any suspicious activity to mitigate the risk that digital currencies, such as Bitcoin, could be used for illegal transactions.
– Control measures for Corporate Service Providers
97
Privilege
• Expansive view of privilege in Singapore
• Two types of privilege recognised in Singapore law: legal advice privilege and litigation privilege (codified in s 128 and 131 of the Evidence Act (EA))
• Legal advice privilege protects communications between a client and his or her advocate and solicitor, the dominant purpose of which is to seek and obtain legal advice
• Litigation privilege is concerned with protecting information and materials created and collected for the dominant purpose of litigation.
• Wide definition of “entity” takes into account the commercial and practical realities of the advice given to companies by in-house counsel.
Where a legal counsel is employed by one of a number of corporations that are related to each other under section 6 of the Companies Act (Cap. 50), subsection (1) shall apply in relation to the legal counsel and every corporation so related as if the legal counsel were also employed by each of the related corporations (s 128 EA)
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Employment
• Singapore law favours employers: termination of an employee, including summary dismissal and termination without notice, is relatively straightforward
• Certain minimum employment conditions are applied mandatorily to persons who fall within the ambit of the Employment Act (EA)
• Most professionals and executives do not fall under the EA
• Workplace relations and terms of employment are governed by the employment contract between the employee and the employer for those who fall outside the scope of the EA
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Employment Act
Applies to employees, defined as “a person who has entered into or works under a contract of service with an employer and includes a workman, and any officer or employee of the Government …” (s 2 EA)
Excludes: Persons employed in a managerial or executive position, any seaman, domestic worker and persons employed by the Government; Independent contractors
Includes (for some EA protection): managers and executives earning S$4,500 or less per month
• Areas regulated by EA:
– hours of work
– overtime pay
– rest days
– sick leave
– annual leave
– certain aspects of termination of an employee’s employment
• EA does not set requirements as to what must be included in an employment contract
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• Corrupt Practices Investigation Bureau (CPIB)
– Powers derived from the Prevention of Corruption Act
– Carries out investigations into complaints of corruption but does not prosecute cases
– Refers cases to the Public Prosecutor to prosecute
• Economic Crimes and Governance Division (EGD)
– One of three divisions in the Attorney-General’s crime cluster
– Primarily responsible for prosecutions and all related appeals for white-collar and other commercial crimes, including corruption cases
• Commercial Affairs Department (CAD)
– Financial Investigation Branch
– Investigates money-laundering
– Suspicious Transaction Reporting Office
– Central agency for receiving, analysing and disseminating Suspicious Transaction Reports
– Proceeds of Crime Unit
– Conducts financial investigations on direct or indirect proceeds of criminal conduct
Enforcement Units
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Corrupt Practices Investigation Bureau
• Aggressive enforcement; high conviction rates
The CPIB opened a total of 152 cases for investigation out of the 792 complaints received in 2013
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• Aggressive enforcement; high conviction rates
175 persons were charged by the CPIB in 2013
Breakdown of persons charged in 2013
– Out of the 140 court cases with outcomes in 2013, there were 134 convictions, 1 acquittal and 5 withdrawals of charges. This works out to a 96% conviction rate including withdrawals, and a 99% conviction rate excluding withdrawals
Corrupt Practices Investigation Bureau
Employees of:
OFFENCES COMMITTED
Prevention of
Corruption Act Penal Code Other Acts Sub-Total (%)
Government Departments 5 1 3 9
Statutory Boards 4 2 1 7
Private Sector 137 20 2 159
Total (%): 146(83.5%) 23 (13.1%) 6(3.4%) 175
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Glenn Defense Marine Asia
• Singapore-based Glenn Defense Marine Asia Ltd. (GDMA) organized tugboats, security, fuel, waste
removal and other services for US Navy ships making port calls in Pacific Rim area
• In October 2013, the US Navy commenced an investigation into bribery, alleging that three US Navy
officers accepted paid travel from GDMA, electronic devices, the service of prostitutes, and tickets to a
Lady Gaga concert in Thailand. In return, the Navy commanders sent classified information to GDMA,
such as ship movement details, and helped arrange visits by U.S. Navy vessels to ports where GDMA
had contracts
• GDMA CEO Leonard Glenn Francis, 49, a citizen of Malaysia, was also charged with conspiring to bribe
U.S. Navy officials. He pleaded not guilty. The GDMA executive Alex Wisidagama, 40, of Singapore,
pleaded guilty on March 18, 2014, to defrauding the U.S. Navy
• A Naval Criminal Investigative Service (NCIS) agent has also been charged with downloading and giving
confidential information to Francis (GDMA’s CEO). It is alleged that he provided information about
cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern
to the investigations; the fact that the investigations had obtained numerous email accounts and the
identities of those accounts; the particulars about bank records and financial information sought by the
investigations; the reports to prosecutors and their interactions with the investigations; and planned future
investigative activities. This criminal conduct occurred between January 2011 and April 2012. The NCIS
agent pleaded guilty to these charges in December 2013
• The US government instituted a ban in September 2013 and terminated nine contracts the company had
with the Navy worth $205 million and has barred GDMA from new contracts
• The on-going investigation is being conducted by NCIS, the Defense Criminal Investigative Service and
the Defense Contract Audit Agency
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Apple
• The former Apple supply manager Paul Devine was accused of accepting more than S$1 million in kickbacks from Apple’s Asian suppliers in return for supplying confidential information in order to assist them in securing Apple contracts
• In 2010, the CPIB commenced investigations into the staff of JLJ Holdings and its subsidiary Jin Li Mould Manufacturing Pte Ltd (Jin Li)
• In February 2011, the former Apple supply manager had pleaded guilty in the US courts to three counts of wire fraud, conspiracy and money-laundering and agreed to forfeit S$2.28 million in money and property
• In September 2013, the CPIB charged two ex-directors of Jin Li for corruptly giving and abetting the giving of a total of US$387,600 to the former Apple supply manager from 2006 to 2009 in Singapore, China, Macau and the US. The two ex-directors were also prosecuted in connection with the case
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Indonesia
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Gift-giving in Indonesia • Any gift to a public official must first be approved by the KPK
• Every gift can amount to a bribe unless the public official reports the gift to the KPK (Article 12B and Article 12C)
• If the amount is more than IDR 10 million (US$860), the public official must prove that the gratification is not a bribe. If the amount is less than IDR 10 million (US$860), the public prosecutor has the burden of proving that the gratification is a bribe
• The KPK has the authority to determine whether the public official may retain the gift or whether the gift is a state asset
• No facilitation payment exception or de minimis threshold
• The KPK Book of Gratuities lists factors that the KPK considers when analyzing gratuities to determine if they are illegal. One of the factors indicating that a gift may be intended as an illegal gratuity, rather than a gift given on the basis of friendship, is a power imbalance between the gift provider and the gift giver
– This is particularly true if there is a relationship of “strategic power relations” where the receiver of the gift has access to assets and control over economic, political, social and cultural strategic resources assets
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3 categories of gift-giver/gift-receiver relationships
Power imbalance between gift-giver and gift-receiver is a factor the KPK considers when analyzing gratuities to determine if they are illegal
1. Vertical-dominative
(i.e. a superior-subordinate relationship)
- Unequal power relation
2. Diagonal
(i.e. public service officers-public service users)
- Unequal power relation
3. Equivalent
(i.e. between friends and between neighbours)
- Equal power relation
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Employment
• Very difficult to terminate employment in Indonesia
• Termination of employment for cause due to gross misconduct practically requires a criminal standard of proof, usually possible only after a police investigation of the person and criminal conviction is obtained
• Practical methods that are used to avoid the difficulties in terminating employment through legal methods include:
– Settlement sums
– Negotiation with employee
• Do not underestimate termination issues in the course of or at the end of an investigation
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Regulators
• Bodies with authority to investigate and prosecute corruption cases:
• Corruption Eradication Commission (Komisi Pemberantasan Korupsi or KPK)
• Police of the Republic of Indonesia
• Attorney-General’s Office (AGO)
The KPK have the ultimate right to investigate and prosecute cases of corruption and bribery, including the right to take over cases being investigated by the police and the Attorney-General’s Office
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KPK
• Investigative powers of the KPK include the power to:
– Tap into telephone lines and record conversations
– Detain travel documents
– Request information from financial institutions
– Order financial institutions to block accounts
– Order the superior of a suspect to temporarily terminate the suspect from office
– Request wealth and tax details of a suspect or defendant from the relevant institutions
– Temporarily freeze financial transactions
• Selective enforcement: High-profile cases
– Initial focus on corrupt domestic officials extending to
foreign bribe-givers
• Close cooperation with the US DOJ and FBI
– Receive training and knowledge transfer
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Indonesia Anti-Corruption Court - TIPIKOR
• Pengadilan Tindak Pidana Korupsi, or TIPIKOR, were established in 2002 as part of the legislation creating the KPK
• Specifically dedicated to corruption cases to address general perception that corruption in Indonesia’s existing courts could render the KPK ineffective because bribes could be paid to influence decisions
• Efficient Adjudication
– Legal requirement that all corruption trials handled by the KPK be completed within 240 days (8 months), including the time taken for the TIPIKOR verdict to be appealed to and decided by the Supreme Court
• Guilty verdict rendered by the TIPIKOR is immediately executable
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UK aerospace and defence company
• SFO opened an investigation in December 2013 into claims that a UK aerospace and defence company and the second-largest maker of aircraft engines, had bribed Tommy Suharto, son of Indonesia's former president General Suharto, so that he would persuade Indonesia's national airline, Garuda, to order engines in 1990
• The company self-reported the potential bribery issues in Indonesia (and China) in 2012 to the SFO
• In March 2014, the company announced that it is also under investigation by the US DOJ for the conduct in Indonesia (and China)
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SKKMigas
• Rudi Rubiandini, the head of Indonesia’s upstream oil and gas regulator SKKMigas, was arrested by the KPK in August 2013 for allegedly accepting a bribe worth more than US$700,000 from an executive from Kernel Oil, a Singapore-based oil trading company, in return for a guarantee to allocate various oil blocks and $522,500 from PT Kaltim Parna Industri for his services in lowering the price of gas sold to the firm
• As a result of the alleged corruption, Kernel Oil was disqualified from a lucrative tender process to be appointed as SKKMigas’ crude oil marketing agent
“It’s true that I accepted bribes . . . But that was after I strongly tried to resist it for five months from January to May [2013]. However, pressures from the stakeholders, coupled with the enormous offers finally forced me to resort to it” (Rudi Rubiandini, Jakarta Corruption Court, first hearing of trial)
• Rubiadini was sentenced to 7 years in prison
• Investigations have broadened and KPK has identified the head of Parliament’s energy committee as a suspect
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Marubeni and Alstom
• Japan-based Marubeni Corporation pleaded guilty to the DOJ for a second time in March 2014 to eight FCPA charges, admitting it bribed a member of the Indonesian Parliament and officials at Perusahaan Listrik Negara (PLN), the state-owned electricity company, to win the Tarahan electricity contract for itself and its French partner, Alstom SA
• The DOJ considered in its charges Marubeni’s decision not to cooperate with the investigation when given the opportunity, failure to voluntarily disclose the conduct, and lack of an effective compliance program
• In 2012, Marubeni paid a US$54.6 million criminal penalty to resolve FCPA charges for its role as an agent of the KBR-led Nigeria joint venture project. Marubeni was charged with conspiracy to violate the FCPA and aiding and abetting and received a two-year deferred prosecution agreement
• Four Alstom executives were charged and two have pleaded guilty
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US oil company
• Four local environmental managers at a US oil company were jailed for two years on corruption charges in Indonesia
• The employees were alleged to have caused “losses to the state” because of their failure to obtain proper permits for a project to remove toxic substances from the soil after drilling by the company in Sumatra
• The prosecutors alleged that this breached Indonesia’s anti-corruption law because some of the expenses of the clean-up program would eventually have been eligible for reimbursement by the government as part of its “cost recovery” scheme to promote new oil exploration
• Defence lawyers for the company rejected the prosecution’s claims, stating that the company did not receive any reimbursement for the project. The defence also stated that its scientific analysis had confirmed that the soil was sufficiently contaminated to warrant bioremediation
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Individual Prosecutions • Andi Mallarangeng
– Former Indonesian Youth and Sports Minister Andi Mallarangeng was accused by the KPK of receiving billions of rupiah in kickbacks during the mismanaged construction of the US$122 million Hambalang sports complex in the town of Bogor in West Java
– Mallarangeng, who was spokesman for President Yudhoyono before his ministerial appointment in 2009, announced his resignation as the sports minister in light of the investigation
• Djoko Susilo
– Former traffic police chief Djoko Susilo was sentenced to 18 years imprisonment and ordered to refund the state Rp 32 billion in illicit assets gained as a result of his involvement in a driving simulator project that cost the state Rp 121 billion in losses
• Susno Duadji
– Former senior Police officer commissioner general Susno Duadji was convicted of corruption and jailed 3.5 years for allegedly taking a Rp 500 million bribe to settle a legal dispute over a fish farm in 2009
• Shiokawa Toshio
– Japanese national and president-director of an electrical wire manufacturer was the first foreigner found guilty of corruption for bribing a judge of the Bandung industrial relations court with Rp 200 million to rule in favour of his company in a labour dispute. He was sentenced to 3 years in jail and fined Rp 200 million
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Publications
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Publications
2014
How financial institutions should prepare for anti-corruption investigations in China, May
2014, http://www.nortonrosefulbright.com/us/knowledge/publications/116355/how-
financial-institutions-should-prepare-for-anti-corruption-investigations-in-china
SEC issues new Conflict Minerals Guidance post NAM, Marsha Gerber, Cristina
Lunders and Christian Menefee, May 2014,
http://www.nortonrosefulbright.com/us/knowledge/publications/116100/sec-issues-new-
conflict-minerals-guidance-post-nam.
US further expands Russian sanctions and makes additional designations, Stephen
McNabb, Marsha Gerber, Stefan Reisinger, Kimberly Caine and Gwen Green, March
2014, http://www.nortonrosefulbright.com/us/knowledge/publications/114042/us-further-
expands-russian-sanctions.
Cutting the ties that bind, Company obtains favorable FCPA Opinion for government
official buyout, Richard Smith, Marsha Gerber, Cristina Lunders and Paul Sumilas,
March 27, 2014,
http://www.nortonrosefulbright.com/us/knowledge/publications/114267/cutting-the-ties-
that-bind.
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Publications (cont.)
2014
Aggressive FCPA Prosecutions Against Individuals Continue, Marsha Gerber, Richard Smith,
Tricia Fratto and Samuel August, Law360, March 6, 2014,
http://www.law360.com/articles/515918/aggressive-fcpa-prosecutions-against-individuals-
continue.
Business ethics and anti-corruption world, A global bulletin on recent business ethics and
anti-corruption developments, Sam Eastwood and Richard Smith, February 2014,
http://www.nortonrosefulbright.com/us/knowledge/publications/112838/business-ethics-and-
anti-corruption-world.
Watch Out, Affiliates of Suspended Government Contractors, Sue Ross and Paul Sumilas,
Law360, January 31, 2014, http://www.law360.com/articles/506111/watch-out-affiliates-of-
suspended-government-contractors.
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Publications (cont.) 2013
FCPA settlement for German-based engineering company, Richard Smith, Marsha Gerber and Paul Sumilas, December 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/110734/fcpa-settlement-for-german-based-engineering-company.
Combating FCPA charges: Is resistance futile?, Richard Smith, Virginia Journal of International Law, December 1, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/115478/combating-fcpa-charges-is-resistance-futile.
Takeaways From Stryker’s FCPA Settlement, Richard Smith, Marsha Gerber, Cristina Lunders and Samuel August, Law360, November 14, 2013, http://www.law360.com/articles/488050/takeaways-from-stryker-s-fcpa-settlement.
Takeaways from Diebold’s FCPA Settlements, Richard Smith, Marsha Gerber, Cristina Lunders and Samuel August, Law360, November 4, 2013, http://www.law360.com/articles/484980/takeaways-from-diebold-s-fcpa-settlements.
How to Avoid Pitfalls of Hiring Gov’t Officials’ Relatives, Richard Smith and Paul Sumilas, Law360, September 25, 2013, http://www.law360.com/articles/474947/how-to-avoid-pitfalls-of-hiring-gov-t-officials-relatives.
First director of the CFPB receives Senate confirmation, Bob Pratte, Layne Kruse and Richard Smith, July 23, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/101551/first-director-of-the-cfpb-receives-senate-confirmation.
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Publications (cont.) 2013
No More SEC Resource Extraction Rule –For Now, Marsha Gerber, Law360, July 18, 2013, http://www.law360.com/articles/458382/no-more-sec-resource-extraction-rule-for-now.
CFPB brings first complaint alleging abusive conduct, Susan Ross, Richard Smith and Layne Kruse, June 11, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/99616/cfpb-brings-first-complaint-alleging-iabusivei-conduct.
CFPB moving in another direction: Criminal referrals to US Attorney, Bob Pratte, Richard Smith and Layne Kruse, May 29, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/99917/cfpb-moving-in-another-direction-criminal-referrals-to-us-attorney.
Without any allegations of bribery, SEC charges company and executives under FCPA’s accounting provisions, Marsha Gerber and Richard Smith, May 21, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/100174/without-any-allegations-of-bribery-sec-charges-company-and-executives-under-fcpas-accounting-provisions.
US and EU disclosures and requirements for the extractive industries, Marsha Gerber and Cristina Lunders, May 16, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/100204/us-and-eu-disclosure-and-requirements-for-the-extractive-industries.
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Publications (cont.)
2013
4 Takeaways From 2nd Highest FCPA Penalty, Richard Smith, Marsha Gerber, Guy Singer, Cristina Lunders and Samuel August, Law360, May 14, 2013, http://www.law360.com/articles/436959/4-takeaways-from-2nd-highest-fcpa-penalty.
Lessons From Philips FCPA Settlement Over Polish Bribes, Richard Smith, Marsha Gerber, Guy Singer, Cristina Lunders, Tracy DeMarco, Law360, May 7, 2013, http://www.law360.com/articles/436956/lessons-from-philips-fcpa-settlement-over-polish-bribes.
Protect Your Company From FCPA Risks in Latin America, Richard Smith, Marsha Gerber, Guy Singer and Cristina Lunders, Law360, April 29, 2013, http://www.law360.com/articles/436763/protect-your-company-from-fcpa-risks-in-latin-america.
In SEC’s first ever FCPA non-prosecution agreement, SEC and DOJ enter into parallel agreements
with Ralph Lauren Corporation; total of $1.6 million in fines and penalties, Marsha Gerber, Cristina
Lunders and Richard Smith, April 25, 2013,
http://www.nortonrosefulbright.com/us/knowledge/publications/100225/in-secs-first-ever-fcpa-non-
prosecution-agreement-sec-and-doj-enter-into-parallel-agreements-with-ralph-lauren-corporation-
total-of-16-million-in-fines-and-penalties.
Second highest FCPA civil penalty handed down for Siemens executive, Samuel August, Marsha
Gerber, Cristina Lunders and Richard Smith, April 18, 2013,
http://www.nortonrosefulbright.com/us/knowledge/publications/100229/second-highest-fcpa-civil-
penalty-handed-down-for-siemens-executive.
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Publications (cont.)
2013
Four former Bizjet employees charged for FCPA violations, two plead guilty, Marsha Gerber,
Christina Lunders, and Richard Smith, April 9, 2013,
http://www.nortonrosefulbright.com/us/knowledge/publications/100232/four-former-bizjet-
employees-charged-for-fcpa-violations-two-plead-guilty.
10 Anti-Corruption Developments to Expect This Year, Richard Smith, Lista Cannon, Marsha
Gerber, Guy Singer, Don DeGabrielle, Bill Leone and Chris Warren-Smith, Law360, March 6, 2013,
http://www.law360.com/articles/420864/10-anti-corruption-developments-to-expect-this-year.
Anti-Corruption Regulation in 2013 and a Review of 2012 Major Developments, Richard Smith,
Marsha Gerber, Lista Cannon, Bill Leone, Chris Warren-Smith and Paul Sumilas, March 4, 2013,
http://www.nortonrosefulbright.com/us/knowledge/publications/94617/anti-corruption-regulation-in-
2013-and-a-review-of-2012-major-developments.
OFAC Publishes Final Rule Amending the Iranian Transactions and Sanctions Regulations to
Codify Existing Sanctions, Marsha Gerber, Gwen Green, Stefan Reisinger and Stephen McNabb,
January 4, 2013, http://www.nortonrosefulbright.com/us/knowledge/publications/93810/ofac-
publishes-final-rule-amending-the-iranian-transactions-and-sanctions-regulations-to-codify-existing-
sanctions.
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