Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week we cover the EU's new antitrust probes into Apple. Read the full story and more news below:
Apple Faces Two EU Antitrust Probes:
EU antitrust authorities announced the launch of two probes into Apple's compliance with its antitrust laws. The EU is going to investigate the treatment of rival companies in the app store and Apple's mobile payments service. Margrethe Vestager, EU's competition commissioner, stated that officials are concerned with Apple's role as service gatekeeper and will determine if the tech giant distorted competition in any way. The investigations are poised to take two years each. If proven guilty, Apple could face a fine of up to 10% of its annual revenue.
U.K SFO Drops Probe Into Banknote Producer:
The U.K. Serious Fraud Office (SFO) dropped a probe into banknote producer De La Rue PLC after stating that the collected evidence did not meet their threshold for prosecution. The investigation was connected to corruption allegations in South Sudan and was opened by the SFO in July 2019. While the watchdog did not specify which aspect of their prosecution test this investigation failed to meet, they stated that the evidence was not sufficient to conclude a 'realistic prospect of conviction'. The closure of this case comes after the SFO also closed another probe into ABB Ltd.'s dealings with Unaoil. The SFO has reportedly been looking into new ways of bettering their management of cases after an independent government inspector drafted a report criticizing its leadership and case management.
Germany's Commerzbank Fined GBP 38M by U.K.’s FCA:
The U.K.'s Financial Conduct Authority (FCA) fined German business bank Commerzbank GBP 38 million for failing to comply with money laundering regulations. According to the FCA, the German bank did not implement money-laundering controls for a period of five years. The FCA also described the bank's client background check system as 'out of control.' While this fine is one of the largest ones imposed by the U.K.'s financial watchdog, the initial fine was reduced by 30% after Commerzbank agreed to cooperate in the investigation. The FCA found that the bank's due diligence procedures were inadequate and that it had failed to conduct due diligence checks on more than 1,700 clients. The investigation also found that the bank's automated tool for monitoring money laundering risks was not updated and was missing 40 high-risk jurisdictions. Commerzbank has stated that since the period of the investigation (2012-2017), the bank had bettered its compliance procedures significantly.
New Swiss Investigation Targets Ex-FIFA President Blatter:
A new investigation by Swiss Financial authorities is accusing former FIFA president Joseph Blatter of mismanaging USD 1 million in funds. The funds were reportedly given out as a loan to the Trinidad and Tobago Football Association in 2010. FIFA disclosed that the payment was documented as a gift and that it came interest-free and unsecured. Authorities are investigating whether the payment was linked to Jack Warner, who held a high-ranking position in FIFA and was later elected to become a government minister in Trinidad. Warner is currently fighting extradition on charges of receiving more than USD 15 million in bribes from South Africa and Russia to support the countries’ bid to host the World Cup.
Former Managers of Chinese Bank Jailed for Money Laundering in Spain:
Four former executives of the Spanish subsidiary of China's largest state-owned bank ICBC were fined USD 24.52 million collectively for money laundering charges by Spain's Anti-Corruption Prosecutor's Office. The executives, who were found to have laundered tens of millions of euros that are suspected to have originated from Chinese organized crime groups, were also given jail sentences of three to five months. A Spanish newspaper reported that the Spanish branch had deposited more than EUR 90 million brought into the country in cash. ICBC ranked as the largest bank in terms of assets in 2017 and 2018. The bank was also subject to previous investigations by the Chinese and American authorities in 2005 and 2018.
Policy & Guidance Updates
France's Ministry of Justice Releases New Guidance on Foreign Bribery:
France's Ministry of Justice released new guidance on how they plan to prosecute and investigate cases of foreign corporate bribery by French companies. The guidance suggests that state prosecutors might begin taking a new approach that resembles the approach taken by U.S. prosecutors with the U.S.'s Foreign Corrupt Practices Act (FCPA). This hints that French prosecutors might begin prosecuting not only bribery of French companies overseas but also companies with weaker ties to France. For example, it could mean that firms that aren't even legally incorporated in France might be able to be prosecuted based on other records. The memo discloses tools and techniques including voluntary disclosure of bribery allegations and more lenient settlements for companies that do voluntarily disclose violations, similar to what the U.S. began using in the 2000s. All in all, the guidance also suggests greater alignment between France, the U.S., and other countries.
EUROPOL Launches New Unit to Address Crime Related to COVID-19:
EUROPOL, the EU's law enforcement agency, announced the creation of a new unit designated to help EU countries fight fraud and crime related to the COVID-19 pandemic. The unit, named the European Financial and Economic Crime Centre (EFECC), is going to help EU countries and bodies fight economic and financial crime and encourage financial investigations. The EFECC will be staffed with 65 experts and analysts tasked with investigating new fraudulent means criminals have adopted during the pandemic.
Ukraine’s Anti-Graft Officers Offered Record $6M Bribe to Drop Case:
Ukraine's Anti-Corruption Bureau (NABU) detained three individuals that offered them a USD 5 million bribe to drop a criminal case against former minister Mykola Zlochevsky. The former minister, who is also the owner of a natural gas company, is being investigated by NABU for having used his position as Ecology and Natural Resources Minister for personal gains. Ukrainian authorities seized USD 5 million in assets from a car owned by the detained deputy chief of the country's State Fiscal Service. Zlochevsky has denied all allegations.