Top 10 International Anti-Corruption Developments for December 2018

Morrison & Foerster LLP
Contact

Morrison & Foerster LLP

[co-author: Adam Rosenberg]

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments in the past month, with links to primary resources. This month we ask: What were the final Foreign Corrupt Practices Act (FCPA) resolutions of 2018? Who was convicted by a New York jury for violating the FCPA? How often are public officials sanctioned in foreign bribery cases? The answers to these questions and more are here in our December 2018 Top 10 list.

  1. American Telecommunications Company Settles China FCPA Charges with SEC, Receives Declination With Disgorgement From DOJ. On December 26, 2018, the U.S. Securities and Exchange Commission (SEC) announced that Polycom, Inc. had agreed to pay more than $16 million in disgorgement, prejudgment interest, and a civil penalty to resolve allegations that it violated the FCPA’s accounting provisions with regard to its Chinese sales operations. According to SEC, from 2006 to 2014, the company’s Chinese subsidiary provided significant discounts to its distributors and resellers, intending that the discounts would be used to make payments to officials at Chinese government agencies and state-owned businesses in exchange for those officials’ assistance in purchasing the company’s products. Managers of the Chinese subsidiary allegedly provided false justifications for the discounts when recording details about the deals in the company’s systems. According to the SEC order, the parent company did not have sufficient accounting controls or an effective anti-corruption program in place for its Chinese sales operations. In a letter dated December 20, 2018, DOJ informed the company that it had “declined prosecution consistent with the FCPA Corporate Enforcement Policy.” According to the letter, the company agreed to disgorge over $30 million, including the approximately $10.7 million it agreed to disgorge as part of the SEC resolution. The Polycom resolution is one example of how DOJ and SEC are reacting to the Supreme Court’s June 2017 holding in Kokesh v. SEC that SEC’s ability to disgorge allegedly ill-gotten gains from defendants was subject to the five-year statute of limitations set out in 28 U.S.C. § 2462. Here, DOJ required the company to disgorge profits earned beyond the limitations period, and SEC also used its authority to impose a civil penalty.
  2. Brazil-based Electric Company Resolves SEC FCPA Investigation. On December 26, 2018, SEC announced that Centrais Elétricas Brasileiras S.A., also known as Eletrobras, had agreed to pay a $2.5 million civil penalty to resolve charges that it violated the FCPA’s accounting provisions in connection with the construction of a nuclear power plant in Brazil. According to the SEC order, former officers at the company’s majority-owned subsidiary were involved in an illicit bid-rigging and bribery scheme in which they used their influence to favor specific private Brazilian construction companies, authorized unnecessary contractors, and inflated the subsidiary’s costs for the project. In exchange, the construction companies allegedly paid the former officers approximately $9 million. In August 2018, the company disclosed that DOJ had declined to prosecute the company.
  3. Former Hong Kong Official Convicted by New York Jury of Africa FCPA and Money Laundering Charges. On December 5, 2018, DOJ announced that Chi Ping Patrick Ho, the former Hong Kong home secretary and head of a Hong Kong and Virginia-based non-governmental organization (NGO), had been convicted by a jury in the Southern District of New York of FCPA and money laundering offenses related to an alleged scheme to pay millions of dollars in bribes to foreign leaders in Chad and Uganda in order to secure contracts for a Chinese energy conglomerate. In November 2017, DOJ unsealed a criminal complaint against Ho and Cheikh Gadio, the former foreign minister of Senegal. In September 2018, DOJ moved to dismiss the charges against Gadio, who was called to testify by the government during Ho’s trial. Ho is scheduled to be sentenced on March 14, 2019. The Ho trial continues a run of trial victories for DOJ’s FCPA Unit since 2017.
  4. Former Aerospace Executive Sentenced to Time Served and Fined $25,000 After Aiding DOJ in Saudi Arabia Bribery Investigation. On December 12, 2018, Colin Steven, a former sales executive of Brazilian aerospace company Embraer S.A., was sentenced in the Southern District of New York to time served and fined $25,000 following his December 2017 guilty plea to charges of FCPA violations, wire fraud, money laundering, false statement, and conspiracy. As part of his plea agreement, Steven admitted that he engaged in a scheme to bribe a Saudi official in exchange for assistance in obtaining an aircraft sales contract. He also admitted that he had lied to law enforcement about receiving a kickback. In October 2016, the company reached a $205 million settlement with American and Brazilian authorities to resolve charges related to alleged corrupt conduct in Saudi Arabia, as well as the Dominican Republic, Mozambique, and India.
  5. Executives Settle FCPA Charges with SEC Related to State-Owned Airline. On December 18, 2018, SEC announced that Paul A. Margis and Takeshi Uonaga—former executives of a Panasonic Corporation subsidiary—had settled charges that they knowingly violated the FCPA’s accounting provisions in connection with obtaining business from a state-owned airline. As part of the resolutions, Margis was ordered to pay a $75,000 penalty, while Uonaga was ordered to pay $50,000 and was barred from participating in the financial auditing or reporting of public companies for five years. These individual settlements follow April 2018 resolutions with DOJ and SEC in which the company and its subsidiary agreed to pay a combined $280 million.
  6. Texas Businessman and Former Venezuelan Official Pleads Guilty to Conspiracy to Obstruct Justice in Connection with PDVSA Corruption Investigation. On December 10, 2018, DOJ announced that Alfonso Eliezer Gravina Munoz, a former procurement officer at Venezuela’s national oil company, Petroleos de Venezuela S.A. (PDVSA), had pleaded guilty in the Southern District of Texas to conspiracy to obstruct justice. Gravina had previously pleaded guilty to one count of conspiracy to launder money and one count of making false statements on his federal income tax return. The new charges stemmed from Gravina’s alleged role in a scheme to obstruct an investigation by U.S. authorities into improper payments to Venezuelan government officials. According to his plea, Gravina concealed information about the bribe payments during his interviews with the government and provided information to a target of the government’s investigation, which resulted in the target destroying evidence and attempting to flee the country. Gravina is scheduled to be sentenced on February 19, 2019.
  7. SFO Announces New Charges Against Former Oil Executive in Connection with Iraq Pipeline Project. On December 21, 2018, the UK Serious Fraud Office (SFO) announced that it had brought additional charges against Stephen Whiteley, a former executive at SBM Offshore and Unaoil Limited, for allegedly assisting Unaoil in becoming a subcontractor for an oil pipeline project in Iraq between March 2009 and May 2010. In November 2017, the SFO announced that Whiteley had been charged with conspiracy to make corrupt payments in Iraq, allegedly to secure the award of contracts in Iraq for SBM Offshore. In June 2018, the SFO announced that it had commenced criminal proceedings against Unaoil Ltd. and Unaoil Monaco SAM as part of its ongoing prosecution of alleged corruption in Iraq. SBM Offshore resolved FCPA allegations with DOJ in November 2017. Whiteley is scheduled to appear before the Westminster Magistrates’ Court on January 9, 2019.
  8. Power Company and its Executives Convicted for Lithuania Bribery Schemes; Transportation Company Convicted for Tunisia Bribery Scheme, but Acquitted, Along with its Executives, of Hungary, India, and Poland Bribery Schemes. On December 19, 2018, the SFO announced that Nicholas Reynolds, former Global Sales Director for Alstom Power Ltd.’s Boiler Retrofits unit, had been convicted of conspiracy to corrupt for his role in an alleged scheme to bribe officials in a Lithuanian power station and senior Lithuanian politicians in order to win two contracts worth €240 million. On December 21, 2018, the SFO announced that Reynolds had been sentenced to 4.5 years in prison and fined £50,000. In its December 19 announcement, the SFO also noted that the company and two other former executives had previously pleaded guilty in connection with the same alleged scheme. The company was ordered to pay £18,038,000 in connection with its plea. The SFO also announced that another Alstom entity, Alstom Network UK Ltd, had been found guilty of one count of conspiracy to corrupt in April 2018 for making corrupt payments to win an €85 million tram and infrastructure contract in Tunisia. The company has yet to be sentenced for this conviction. Finally, the SFO also announced that Alstom Network UK Ltd and five of its executives were acquitted of charges related to alleged bribery in Hungary, India, and Poland.
  9. French Oil and Gas Company Fined by French Court for Iranian Bribes. On December 21, 2018, a Paris court fined French oil and gas group Total €500,000 for allegedly bribing Iranian officials in order to secure a contract for an Iranian oil field in 1997. The company allegedly paid $30 million in bribes under the guise of a consulting contract. The court rejected the prosecutors’ request that the company’s assets be seized in an amount equivalent to the estimated value of the proceeds of the corruption, €250 million. In 2013, the company agreed to pay more than $398 million to resolve FCPA charges with SEC and DOJ.
  10. OECD Reports Lack of Sanctions Against Bribe Takers in Foreign Bribery Cases. On December 11, 2018, the Organisation for Economic Cooperation and Development (OECD) Working Group on Bribery released a report concluding that “[p]ublic officials accepting bribes from OECD-based companies run little risk of being punished.” The report, called “Foreign Bribery Enforcement: What Happens to the Public Officials on the Receiving End?” determined that, although investigations of public officials were conducted in more than half of the 55 cases in which OECD-based companies were punished for foreign bribery between 2008 and 2013, formal sanctions were imposed on the officials in only one-fifth of those cases. The report concluded that there is a lack of international cooperation on the “demand side” of foreign bribery and determined that the media plays a major role in the international flow of information.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:

Morrison & Foerster LLP
Contact
more
less

Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

Related Case Law

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.