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 an investigation into Ericsson's compliance to the FCPA. Read the full story and more news below:
Ericsson makes USD 1.2 billion provision to settle U.S. probes:
- U.S. investigations into Ericsson, the Swedish Mobile telecom gear maker, have revealed lapses in the company’s compliance with the FCPA. According to the inquiry, which began in 2017, the company failed to comply with their own Code of Business Ethics and the FCPA in Indonesia, Saudi Arabia, Vietnam, Djibouti and China. The CEO admitted that the company “has failed in the past” and that they are still in the process of finding a resolution to the charges. While Ericsson’s inability of reacting to red flags and imposing adequate internal controls has been criticized by the SEC, analysts highlight that the USD 1 billion fine was in accordance with market expectations.
TechnipFMC pays SEC USD 5 million to settle FCPA violations:
- This Monday, TechnipFMC paid USD 5 million to settle FCPA charges for violating FCPA accounting standards and controls provisions as well as engaging in bribery in their operations in Iraq. According to the investigations, a predecessor company called FMC Technologies disbursed around USD 794 thousand in payments to a third-party consultant who reportedly used some of the money to pay bribes for contracts to Iraqi officials from 2008 to 2013. The bribes were reportedly given by TechnipFMC to win contracts with Iraq state-owned oil companies. The settlement comes after TechnipFMC paid USD 296 million to the DOJ for FCPA related offenses in Brazil in June of this year.
Dutch bank ABN Amro subject to money laundering investigation:
- One of the Netherlands’ largest banks, ABN Amro, is being investigated for money laundering as it reportedly failed to conduct appropriate due diligence on its clients for years. Prosecutors are investigating ABN’s failure of reporting suspicious activities on time and for failing to terminate relationships with suspect clients in due time. The probe has been attributed to a recent push by Dutch prosecutors who have been investigating illegal transactions in Dutch banks. As a part of the push, ABN was informed it would be subjected to possible money laundering investigations in the beginning of the year. As a response to that, ABN had reportedly already increased its anti-money laundering operations dedicating more than 1,000 of its staff to this issue since. After the news on the most recent probe went public, the bank’s shares dropped more than 9%.
SEC charges Nissan and Ghosn with concealing USD 140 million in deferred compensation:
- Nissan and its former CEO Carlos Ghosn were charged with fraud for failing to disclose USD 140 million paid out to Ghosn as a part of his retirement plan. In 2004, Ghosn was given the authority to set executive compensation levels including his own. As a result, he was able to conceal more than USD 90 million of compensation from public disclosure from 2009 to 2018. The money was allegedly concealed with the help of others at Nissan via accounting fraud, “secret contracts”, and backdating letters to change Ghosn’s pension plan and provide an additional USD 50 million in benefits. Both Nissan and Ghosn have agreed to pay the SEC for violating the SEC’s anti-fraud provisions without admitting or denying the allegations and findings. While Nissan will pay USD 15 million, the former CEO agreed to a civil penalty of USD 1 million and a ban from serving as a company executive for ten years.
Whistleblower accuses White House of Ukraine call cover-up:
- A whistleblower has accused the Trump administration of covering up the details of a call in which Trump allegedly encouraged Ukraine president, Volodymyr Zelensky, to help him investigate Joe Biden and his son. The allegations, are also in the heart of an official inquiry for impeachment made at the U.S House of Representatives earlier this week. The whistleblower provided extensive details about the phone call in which Trump attempted to influence the leader of a foreign nation to investigate one of his potential rivals for the 2020 elections. According to the complaint, several U.S. officials were complicit in locking down the phone call by moving the transcript of the conversation to a secret computer system among other measures. While the whistleblower’s allegations are still under investigation, Trump has publicly dismissed the accusations as politically motivated via Twitter.
Somali president signs anti-corruption law:
- Somalia, a conflict ridden country with high risks of corruption, has recently passed a long awaited anti-graft bill. The new piece of legislation is paving the way to create independent anti-corruption bodies at the regional and federal level. While the country earned the lowest score on Transparency International’s corruption perceptions index in 2018, the president is allegedly attempting to regain the confidence of international monetary institutions in order to secure a formal debt relief plan after years of conflict.
Corruption allegations drive protest arrests in the streets of Egypt:
- Egypt is now facing its second week of protests against President Abdel Fattah al-Sisi after corruption allegations came to light. The protests were sparked after a series of videos in which the president was being accused of personally benefiting from government corruption was made public by a prominent military contractor, Mohamed Ali. The videos described Sisi’s lavish spending habits on luxury residences and hotels. While Sisi has denied all corruption allegations; protests have been met with around 2,000 civil arrests and protestors are now demanding the resignation of al-Sisi.
DOJ issues further guidance, warnings on ephemeral messaging apps
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs