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 updated version of the FCPA Resource Guide. Read the full story and more news below:
U.S. DOJ and SEC Release Second Edition of FCPA Resource Guide:
The U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) released an updated second version of the resource guide to the U.S. Foreign Corrupt Practices Act (FCPA) after its publication in 2012. The guide provides information and analysis of the FCPA and its enforcement by providing hypothetical examples and case material on the applicability of the law and legal opinions on enforcement decisions. Among other things, the updated guide contains a new case law definition of the term 'foreign official', as well as updated information on the assessment of the effectiveness of a compliance program. The guide also covers successor liability in M&As, jurisdictional reach issues, accounting provisions, and information on the factors considered by the DOJ and SEC when raising charges or opening a probe. Some of the factors considered include timely and appropriate remediation, self-disclosure, and cooperation with authorities.
Second Wirecard Executive Arrested and Questioned by Prosecutors:
After German Wirecard's CEO was arrested for corruption, the company's head of Dubai was detained by German prosecutors as part of their investigation into potential fraud. The managing director of Wirecard's Dubai-based business, Cardsystems Middle East FZ LLC, was arrested under a warrant of 'urgent suspicion of conspiracy to commit fraud.' The arrest comes a few weeks after Wirecard made headlines for admitting to having a USD 2 billion hole in its balance sheet last June. According to German prosecutors, the Dubai branch was involved in managing third-party acquirers, which were companies Wirecard used to process payments in countries they did not have a license to operate in. Three of these companies are now at the center of the investigation. Since the scandal, several of Wirecard's affiliated firms have faced insolvency, and the firm has experienced a significant decline in its market value.
Deutsche Bank Faces USD 150M Fine for Jeffrey Epstein Ties:
Deutsche Bank was fined USD 150 million for failing to monitor its relationship with the convicted sex offender, Jeffrey Epstein. According to prosecutors, the bank assisted the criminal in transferring millions of dollars from 2013 to 2018 with little scrutiny. New York authorities stated Deutsche experienced 'significant compliance failures' as it failed to report several suspicious payments including a USD 800,000 cash withdrawal. The bank has acknowledged the weaknesses in their onboarding and monitoring processes and stated that they have spent more than USD 1 billion in improving compliance and internal training.
Policy & Guidance Updates
NCPA Updates Global Mapping of Anti-Corruption Authorities:
The Network of Corruption Prevention authorities, a network of different anti-corruption agencies affiliated to GRECO (the European Council), published an updated report mapping anti-corruption authorities across the world. The data is meant to help anti-corruption practitioners identify common challenges in anti-corruption enforcement across the world to provide a precedent for better cooperation across international authorities. Besides compiling a directory of national anti-corruption authorities and how they operate and differ compared to one another, the report found that in the private sector, the adoption of codes of conduct and risk mapping are both rarely mandatory.
EU Sues Austria, Belgium, and the Netherlands Over Non-Compliance with AML Rules:
The EU Commission is suing the Netherlands, Belgium, and Austria at the European Court of Justice (ECJ) for failing to comply with the EU's laws on anti-money laundering. The EU's 4th AML Directive was introduced in 2015 and was supposed to be implemented into national legal frameworks by June 2017. The Commission accused the countries of failing to implement the appropriate provisions in different areas that include gambling legislation, information exchange, and corporate governance provisions. The ECJ is to approve financial transactions against the three countries. Dutch authorities have stated that the required legal changes to implement the Directive were accepted by the Dutch Senate in June and are going to be implemented soon. No other authority has commented on the Commission's decision.
Two Panamanian Ex-Presidents Questioned Over Graft, Money Laundering:
Ricardo Martinelli and Juan Carlos Varela, two of Panama's former presidents, are being investigated by Panama's Special Anticorruption Prosecutor's Office and its Specialized First Superior Prosecutor's Office against Organized Crime for money laundering and corruption crimes. Former president Ricardo Martinelli is accused of diverting public funds during his presidency from 2009 to 2014. Varela, who held the post from 2014 to 2019, is accused of corruption in relation to Odebrecht. The Odebrecht corruption case, which spans across Latin America, involves several high-ranking public officials in the region who have been found guilty of receiving bribes in exchange for public contracts.
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs
Founder and former FTX CEO arrested, indicted on eight fraud charges