Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary resources. This month we ask: How has the U.S. Department of Justice (DOJ) increased the incentives for companies to self-report misconduct? Which countries are perceived to be the most and least corrupt? What anti-corruption reform measures were proposed in the European Parliament? The answers to these questions and more are here in our January 2023 Top 10 list.
1. DOJ Increases Incentives for Corporate Voluntary Self-Disclosure and Cooperation
On January 17, 2023, the Assistant Attorney General for DOJ’s Criminal Division, Kenneth Polite, announced changes to the Criminal Division’s Corporate Enforcement Policy (CEP). According to Polite, these revisions represent the “first significant changes” to the CEP since 2017. (The CEP was also revised in 2019.) Most notably, the revisions expand incentives for companies to self-disclose misconduct, cooperate with DOJ investigations, and implement timely and appropriate remediation by expanding the population of companies that are eligible for declinations and by increasing potential fine reductions for companies that are not. As to the former, the revised CEP provides that a company can receive a declination even when “aggravating circumstances” are present, if the company can demonstrate that it (1) immediately made a voluntary self-disclosure upon learning of the misconduct; (2) had an effective compliance program and system of internal accounting controls that enabled the identification of the misconduct; and (3) provided extraordinary cooperation and undertook extraordinary remediation. As to the latter, the revised CEP provides for a 25 percent increase in the potential fine reductions that companies can receive—in some cases, up to 75 percent off the low end of the fine range calculated under the U.S. Sentencing Guidelines. The revisions reflect DOJ’s recognition that a company’s decision to self-report misconduct can be difficult and demonstrate DOJ’s willingness to refine its policies, but the new standards still leave room for disagreements between companies and prosecutors over whether the company “immediately” reported or provided “extraordinary” cooperation. (For more in-depth analysis of the revised CEP, see our full Client Alert.)
2. Transparency International Releases Annual Corruption Perceptions Index
On January 31, 2023, Transparency International (TI) published its annual Corruption Perceptions Index (CPI) for 2022. The CPI, which measures the perceived levels of public-sector corruption in 180 countries and territories, provides one of the major data points used by compliance professionals, outside counsel, and enforcement officials in assessing the anti-corruption risk of doing business in particular countries. Countries and territories receive scores ranging between 0 (highly corrupt) and 100 (very clean). TI considers scores below 50 to be failing scores, while scores below 30 indicate severe systemic corruption. Denmark (scoring 90) remains the top country on the CPI 2022, a position it has held since 2017. It is followed by Finland and New Zealand, both with a score of 87, while Norway, Singapore, Sweden, Switzerland, the Netherlands, Germany, Ireland, and Luxembourg round out 2022’s top 10. This year, Somalia (scoring 12; ranking 180), Syria, and South Sudan (both scoring 13; jointly ranking 178) occupy the bottom of the index. Venezuela (scoring 14; ranking 177) and Yemen (scoring 16; ranking 176) are next, with Libya, North Korea, Haiti, Equatorial Guinea, and Burundi (all scoring 17; jointly ranking 171) completing the bottom 10. The United States (scoring 69, a 2-point increase; ranking 24, a 3-rank increase) reversed a four-year decline, rising in score and rank for the first time since 2017. As discussed in our client alert examining CPI results in the Asia-Pacific region (APAC), Vietnam made significant gains in 2022 (scoring 42, a 3-point increase; ranking 77) while Indonesia (Southeast Asia’s largest economy) had a significant drop (scoring 34, a 4-point decrease; ranking 110). China maintained a score of 45 but recent government statements and corresponding legislation suggest the stagnation is not due to a slowdown in anti-corruption efforts. Corruption remains a global threat, with 68 percent of countries scoring below 50 and an average score of 43 that has remained unchanged for eleven years in a row. TI warned that the dangers of corruption can lead to kleptocracy, social unrest, and authoritarianism that in turn threaten both domestic and global security.
3. Two Individuals Sentenced in Connection with Venezuela Bribery and Money Laundering Scheme
On January 25, 2023, Jose Luis De Jongh-Atencio was sentenced to four years in prison, and Roberto Enrique Rincón-Fernández was sentenced to 18 months minus time served, in the Southern District of Texas. DOJ announced De Jongh’s guilty plea in March 2021, alleging that the former official at Citgo Petroleum Corporation, a Houston-based subsidiary of Venezuela's national oil company, Petróleos de Venezuela S.A. (PDVSA), took more than $7 million in bribes that included tickets to the Super Bowl, World Series, and a U2 concert, in exchange for procuring contracts with Citgo and other business perks. DOJ announced Rincón’s guilty plea nearly six years ago, in June 2016, alleging that he paid bribes to PDVSA officials to secure contracts and other benefits and failed to report nearly $6 million in foreign dividend income from a Venezuelan corporation he owned. Sentencing memos were sealed, meaning that the extent of either defendant’s potential cooperation with the government is unknown. However, both received significantly shorter sentences than statutory maximums.
4. Former Bolivian Official Sentenced for Laundering Bribery Proceeds Related to Bolivian Defense Contract
On January 4, 2023, DOJ announced that Arturo Carlos Murillo Prijic, the former minister of the government of Bolivia, was sentenced to 70 months in prison for conspiracy to launder bribes he received in exchange for helping a U.S. company win Bolivian defense contracts. Between 2019 and 2020, Murillo accepted at least $532,000 from a Florida-based company to help it secure a $5.6 million contract to provide tear gas and other non-lethal equipment to the Bolivian Ministry of Defense. Murillo pleaded guilty to one count of conspiracy to commit money laundering in October 2022, and his four co-conspirators (including three U.S. citizens) pleaded guilty to related charges in September 2021. All were originally charged in May 2021.
5. Former Unaoil Chief Operating Officer Sentenced for Wide-Ranging Bribery Scheme
On January 30, 2023, Saman Ahsani, former COO of energy consultancy Unaoil, was sentenced in the Southern District of Texas to 12 months and one day in prison and, the next day, an order imposing a $1.5 million money judgment against him was entered. In October 2019, DOJ announced that Ahsani and his brother, Cyrus Ahsani, former Unaoil CEO, had both pleaded guilty to one count of conspiracy to violate the FCPA by conspiring to secure oil and gas contracts through the bribery of government officials in Algeria, Angola, Azerbaijan, the Democratic Republic of Congo, Iran, Iraq, Kazakhstan, Libya, and Syria. (For more information on the Unaoil prosecutions by DOJ and the UK’s Serious Fraud Office, please see our November 2017, May 2018, June 2018, December 2018, July 2019, October 2019, July 2020, August 2020, June 2021, November 2021, and July 2022 Top 10s. Also listen to our discussion of the Ahsani case on The World.)
6. The United States Announces New Corruption-Related Sanctions Involving Paraguay
On January 26, 2023, the U.S. Department of State (DoS) announced that the former president of Paraguay, Horacio Manuel Cartes Jara (“Cartes”), the current Paraguayan vice president, Hugo Adalberto Velazquez Moreno (“Velazquez”), and four entities owned or controlled by Cartes were being sanctioned for their involvement in systemic corruption. The DoS had previously designated Cartes as a corrupt politician, and said that he used his significant wealth and five-year term as president (from 2013 to 2018) to engage in widespread bribery of government officials and legislators. The DoS also stated that Velazquez is currently engaged in bribery to protect himself and his associates from criminal investigations.
7. Canada Announces New Corruption-Related Sanctions Involving Haiti
On January 13, 2023, Canada announced sanctions against Haitian elites Arnel Belizaire, a former legislator, and Charles Saint-Remy, adviser and brother-in-law of former President Michel Martelly. The Canadian government stated that both men protected violent gangs and enabled drug trafficking, and the sanctions were aimed at pressuring individuals to stop funding and supplying weapons to criminal gangs. These sanctions are part of a growing list of sanctions on Haitians associated with corruption and armed criminal gangs, and part of Canada’s recent efforts to remedy and highlight the governmental crisis in Haiti. Haiti is reportedly at a breaking point, with most lawmaker positions unfilled and no elections having taken place since 2016.
8. Singapore Charges Two Employees of Oil Rig Builder with Corruption, Issues Stern Warning to Six Others
On January 6, 2023, the Singapore Corrupt Practices Investigation Bureau (CPIB) announced charges under the Prevention of Corruption Act (PCA) against two former managers at a subsidiary of Keppel Offshore & Marine Limited (KOM). According to the CPIB, the two managers received paid international travel in exchange for awarding a contract to purchase scrap steel to a third party. On January 12, 2023, the CPIB announced that it issued stern warnings in lieu of prosecution to six unnamed individuals who were formerly senior managers at KOM. Minister Idranee Rajah subsequently addressed the Singapore Parliament regarding the decision not to prosecute, citing a lack of sufficient evidence to establish criminal charges and clarifying that KOM’s December 2017 deferred prosecution agreement with DOJ did not factor into the decision. Singapore’s actions are the latest developments in an international investigation concerning KOM’s activities from 2001 to 2014, which also resulted in a recent settlement with Brazilian authorities (see our December 2022 Top 10).
9. Chinese President Warns Officials Against “Colluding” with Businesses
On January 9, 2023, Chinese President Xi Jinping warned a meeting of anti-corruption regulators that action should be taken to prevent “collusion” between officials and businesspeople. He further warned against “any infiltration of capital into politics,” signaling his government’s continued focus on battling corruption.
10. European Parliament President Proposes Anti-Corruption Reform Plan
On January 12, 2023, European Parliament President Roberta Metsola proposed a 14-point anti-corruption reform plan that, among other changes, would prevent former Members of the European Parliament (MEPs) from lobbying for two years after they leave office, require public disclosure of meetings between lobbyists and MEPs, and ban “Friendship Groups,” unofficial parliamentary bodies that discuss EU policies with non-member states and are often directly funded by foreign governments. According to Metsola, the new measures will “strengthen the institution’s tools in terms of ethics, transparency, and conduct, and improve working relations with third countries.” Metsola’s proposal was a response to a corruption probe launched in December 2022 by Belgian authorities into former MEPs accused of taking bribes in exchange for legislative support for Qatar and Morocco. Qatar and Morocco, as well as the accused MEPs, including former Parliament Vice President Eva Kaili, deny the accusations.
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