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 Microsoft's settlement for FCPA violations. Read the full story and more news below:
- Microsoft Settles FCPA Violations for USD 25 Million: Microsoft agreed on Monday to pay a combined USD 25.3 million to the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) in relation to its operations in Hungary, Saudi Arabia, Thailand, Turkey.In Hungary, a Microsoft subsidiary named Microsoft Magyarorszag Kft. paid a criminal of USD 8.75 million and agreed to enter into a non-prosecution agreement for three years with the DOJ. Microsoft also disgorged USD 13.78 million to the SEC plus prejudgment interest of USD 2.78 million, corresponding to the amount of business won in Hungary though the use of “improper payments”. The SEC said that Microsoft cooperated with the investigation and took remedial action, including strengthening its internal accounting controls and compliance programs. The company also took disciplinary action against four Microsoft Hungary employees, terminated four licensing partners in the country, and it began using data analytics to identify high-risk transactions, among other measures taken. READ MORE
- SFO puts De La Rue under investigation for suspected corruption: The U.K’s Serious Fraud Office (SFO) said this week that it is investigating De La Rue, the world’s biggest printer of banknotes in the world, over suspected corruption in South Sudan. The SFO said it is looking into how De La Rue conducted business in the African country. De La Rue has done business with South Sudan since the country was founded in 2011; it designed and prints the country’s banknotes. The company said that it is cooperating with the SFO, but declined to give further details beyond saying that “given the early stage of these matters, it is not possible to predict reliably what effect their outcome may have on De La Rue.” The company have been the subject of an SFO investigation twice before in the last 12 years. In 2010, it told the SFO that some of its employees had falsified paper specification certificates. Another investigation was launched in 2007, but was closed without any action taken against the company or its employees.
- SEC rewards overseas whistleblower: The U.S. Securities and Exchange Commission announced an award for USD 500,000 to an overseas whistleblower this week. The award was given after the whistleblower gave the agency crucial information for the prosecution of an overseas case. Whistleblowing awards given by the SEC can amount to 10 to 30 percent of the collected money when the fine exceeds USD 1 million. In 2018, the agency awarded a single whistleblower USD 4 million for providing the SEC with information leading to a successful enforcement action. Since the SEC began awarding whistleblowing in 2012, USD 385 million have been given to 65 individuals.
- World Bank debars Merck unit: The World Bank said on Wednesday that it hasdebarred a business unit of Merck for 12 months over a “fraudulent practice” related to a public health project in Bangladesh. The USD 360 million project was conceived to help the country strengthen its health systems. The unit, named Institutional Family Planning Services Department (IFPSD), will be ineligible to participate in World Bank-financed projects during the debarments. IFPSD failed to disclose the full commision amount its predecessor had agreed to pay its local agent in a contract to supply contraceptives used for the project. The debarment is not eligible for cross-debarment by other development banks, as the debarment does not exceed a year.
- Former Unaoil executive pleads guilty to bribery: After a three year criminal investigation led by Britain’s Serious Fraud Office (SFO), Basis Al Jara, a former partner at Unaoil, pled guilty to five counts of bribery. Unaoil is a Monaco-based oil and gas consultancy firm with operation branches in the Middle East, Central Asia and Africa. Al Jara, who was a partner in Unaoil’s branch in Iraq, admitted to making corrupt payments in order to secure contracts in the country. The contracts were reportedly related to oil supply as well as to the instalment of single point moorings and oil pipelines in Southern Iraq.
- South Africa's President Cyril Ramaphosa accused in corruption row: The president of South Africa is being accused of money laundering and of misleading parliament by South Africa’s watchdog. According to the allegations, Ramaphosa received election campaign donations from a controversial local company when bidding for the rule of the African National Congress (ANC). The president has denied all allegations and his supporters have asserted that the allegations are politically motivated. The accusations also come after previous South Africa president Jacob Zuma was forced to resign from his position in February 2018 after hefty corruption allegations.
- Kenyan finance minister arrested in corruption case: After a few months of releasing a newspaper ad to defend himself, Kenyan finance minister Henry Rotich, turned himself over to the authorities for corruption charges. The Kenyan Public Prosecutions office stated that Rotich’s charges were related to widespread corruption in the procurement process of the construction of two hydro-electric dams in the country. The contracts to build were awarded to CMC di Ravenna, at the reportedly inflated price of USD 456 million. While Kenya’s prosecutors are planning on charging 27 more people for violating anti-corruption laws, the Italian company, CMC di Ravenna has denied all allegations.
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