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June 10, 2010

TRACE RELEASES FIRST SUMMARY OF GLOBAL ANTI-BRIBERY ACTIVITY

Posted by wrageblog under FCPA, OECD, TRACE, TRACE Compendium, UK Government, US Government, enforcement | Tags: , , |
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Global Enforcement Report 2010 Is First of Planned Annual Releases

The good news is enforcement of international anti-bribery laws is increasing. The bad news is many countries have yet to leave the anti-bribery enforcement starting line.

TRACE International released its first-ever summary of worldwide anti-bribery activity today, and it is evident from its data that enforcement is gaining momentum. The TRACE Global Enforcement Report (GER) 2010 summarizes 33 years of enforcement activity by nations around the world.

The TRACE GER 2010 is based on data collected in the TRACE Compendium, a compilation of information about international anti-bribery investigations, formal cases and legal decisions the organization maintains as a public, online tracking tool. The enforcement activities collected date to 1977, when the United States passed and began to enforce the Foreign Corrupt Practices Act (FCPA).

“There is considerable activity to report, which means that transparency is being prioritized and laws prohibiting bribery of foreign officials are increasingly being enforced,” said Alexandra Wrage, President of TRACE. “Although some of the conclusions from our analysis merely confirm expected enforcement trends, TRACE GER 2010 includes some surprises.”

One of those unexpected findings is that in terms of enforcing so-called “inbound” bribery – or enforcement actions brought against a foreign company or individual for offering a bribe to a country’s own officials – South Korea and Italy are the most aggressive enforcers. South Korea leads the enforcement pack in this category, with 12 of the 96 inbound global enforcements recorded; Italy has recorded nine.

The TRACE GER 2010 shows that the U.S.’s role as the anti-bribery first mover has given it a clear lead in terms of the number of total enforcement actions to date for “outbound” bribery; that is, cases and investigations brought against companies and individuals for offering to bribe government officials of other countries. Of the 515 outbound, or foreign, enforcement actions reported in the TRACE Compendium, more than 75 percent, representing 390 bribery enforcement actions, are U.S. matters. The remaining 25 percent are the result of the combined efforts of 21 other nations.

The United Kingdom ranks a distant second highest in the number of outbound bribery actions, with 4.3 percent of the total, comprising 22 bribery enforcement reports.

Although anti-bribery enforcement activity is increasing, and new entrants in the enforcement arena have emerged, much work remains. Of the 193 nations recognized by the United Nations, only 22 have enforced a foreign anti-bribery law in the past 25 years.

According to Wrage, TRACE will publish the GER on an annual basis, with TRACE GER 2010 serving as the organization’s baseline measurement.

“This report summarizes data on the key dimensions of international bribery enforcement, including outbound bribery, inbound bribery, the countries in which alleged bribes are most frequently paid, and the industries in which bribery enforcement cases originate,” she said. “Future Global Enforcement Reports will identify and update the trends in these areas, as well as include other timely analyses of emerging patterns of enforcement as such actions continue to increase around the world.”

To view the TRACE Global Enforcement Report 2010, please visit https://secure.traceinternational.org/documents/TRACEGlobalEnforcementReport2010.pdf.

 

March 4, 2010

OECD Issues Good Practice Guidance

Posted by wrageblog under Compliance Strategies, OECD | Tags: , , |
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TRACE welcomes the practical guidance provided by the OECD in its March 3rd release of a “Good Practice Guidance on Internal Controls, Ethics, and Compliance,” which now forms Annex II to the Working Group on Bribery’s Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions initially issued on November 29, 2009.  The Good Practice Guidance was negotiated and agreed by the 38 member states comprising the Working Group and, as such, represents the first real attempt to conform anti-bribery compliance expectations across borders.  Going forward, the Working Group’s monitoring mechanism will include monitoring countries’ progress in encouraging their respective private sectors to implement the document’s principles.

As emphasized in the OECD press release, the Good Practice Guidance calls on companies and organizations to: (i) adopt a clear and visible anti-bribery policy that is strongly supported by senior management; (ii) instill a sense of responsibility for compliance with the policy at all levels of the company, as well as independent compliance structures; (iii) keep up regular communication and training on foreign bribery for all employees, as well as with business partners; and (iv) encourage observance of anti-bribery compliance measures, and disciplinary procedures to address their violations.  The document also recommends that companies implement compliance procedures specifically addressing due diligence on business partners, gifts, hospitality and travel, political contributions, charitable donations and sponsorships, facilitation payments, and solicitation and extortion.

The Good Practice Guidance also contains a section on “Actions by Business Organisations and Professional Associations.”  The section discusses the important role business organizations and professional associations can play in supporting companies’ efforts to develop and implement effective compliance programs by (i) disseminating information on foreign bribery issues, including regarding relevant developments in international and regional forums, and access to relevant databases; (ii) making training, prevention, due diligence, and other compliance tools available; (iii) providing general advice on carrying out due diligence; and (iv) providing general advice and support on resisting extortion and solicitation.  TRACE is proud to be an active member of the community of organizations supporting businesses in these crucial areas.

 

December 11, 2009

TRACE Compendium Update: German Authorities Impose EUR 150.6 Million in Fines Against MAN Group

Posted by wrageblog under Germany, OECD, enforcement | Tags: , , , |
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On December 10, 2009, public prosecution authorities at the Munich District Court imposed a EUR 75.3 million fine against each of two MAN subgroups – MAN Nutzfahrzeuge AG (the Group’s commercial vehicles division) and MAN Turbo AG (the Group’s compressors/turbines division) – in connection with improper payments made to foreign officials in various undisclosed countries between 2002 and 2009. This settlement marks the conclusion of the Munich Public Prosecutor’s Office’s investigation into wrongdoing by the corporate entities. The investigations into several former managers in the MAN Group continue. According to MAN, it was able to reach settlement with the government as a result of the company’s extensive internal investigations into the alleged bribery and its cooperation with prosecutors. MAN’s internal investigations are reported to have cost a total of EUR 50 million since May 2009.

For more information on this and other international anti-bribery enforcement actions, please visit the TRACE Compendium.

 

December 9, 2009

Good News at Today’s OECD Celebration

Posted by wrageblog under Facilitating Payments, OECD | Tags: , |
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TRACE received an early Christmas present today when the OECD announced a new recommendation on facilitation payments more closely aligned with TRACE’s longstanding position on this form of business bribery. The recommendation was made at the OECD’s celebration of “International Anti-Corruption Day” and the Tenth Anniversary of the Entry into Force of the OECD Anti-Bribery Convention. The OECD also used the forum to introduce its Initiative to Raise Global Awareness of Foreign Bribery.

This is a timely and welcome move by the OECD that brings the considerable problems associated with facilitation (or ‘grease’ or ‘expediting’ payments) in the international business arena into keener focus. Just like large commercial bribes, grease payments abuse the public trust and corrode corporate governance. Treating them as anything other than outright bribery muddies the compliance waters and adds confusion where there should be clarity. We are delighted to see the OECD take a stronger stance.

OECD Secretary-General Angel Gurría and U.S. Secretary of Commerce Gary Locke jointly unveiled the OECD’s new Recommendation for Further Combating Bribery of Foreign Public Officials via video-link from Washington, D.C. during the celebration, opened by remarks from U.S. Secretary of State Hillary Clinton.

TRACE has worked with companies for eight years to help them voluntarily end their reliance on facilitation payments. With management support, a clear message, careful planning and good internal controls, companies tell us avoiding this form of bribery is no more challenging than avoiding any other form – and the benefits are considerable. Of the companies that have moved away from reliance on these payments, none has reported a significant delay or disruption to their business.

Both the 2009 Facilitation Payments Survey Results and The High Cost of Small Bribes are available on the TRACE website. The High Cost of Small Bribes is available in English and French.

 

December 9, 2009

International Anti-Corruption Day

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December 9th marks the United Nations’ International Anti-Corruption Day. The OECD celebrates the 10th Anniversary of the Entry into Force of its Anti-Bribery Convention with, among other things, a new set of recommendations addressing the Convention. The OECD and UN both launch initiatives today to raise awareness of the cost of corruption. These efforts reinforce recent speeches by President Obama and Secretary of State Clinton that have called for reform in kleptocratic regimes and demanded greater transparency in resource-rich countries. Attitudes are shifting quickly against the grasping, thuggish greed that was once seen as regrettable, but unavoidable.

December 9th is also a good day to remember the more than 100 journalists who have, according to the Committee to Protect Journalists, Reporters Without Borders and others, been murdered worldwide over the same ten year period while investigating corruption. Anti-corruption efforts owe much to these reporters, without whom little would be known about the true extent of this global problem.

 

December 3, 2009

Australia Poised to Bring Foreign Bribery Prosecution

Posted by wrageblog under Australia, OECD, TRACE Compendium, enforcement | Tags: , |
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On November 19, 2009, the Australian Federal Police (“AFP”) raided the Melbourne offices of Securency International Pty Ltd, as well as the homes of two Securency executives, in connection with an investigation into potential bribery of foreign officials in Vietnam, Nigeria and Malaysia, among other countries. Securency is a supplier of secure polymer substrate technology and other unique substrates used in the printing of banknotes and other security documents. The company was formed in 1996 as a joint venture between the Australia’s central bank, the Reserve Bank of Australia, and Innovia Films. The AFP investigation reportedly began following news reports published in May 2009 concerning alleged bribes made to Vietnamese government officials through a local agent in order to secure a contract in 2002 to supply polymer banknotes to the Vietnamese government. The UK Serious Fraud Office is also reportedly involved in the investigation, as two of Securency’s sales executives conducted much of their work from England. The investigations are ongoing at this time.

To read more about this and other international anti-bribery investigations and prosecutions, please visit the TRACE Compendium.

 

November 17, 2009

TRACE LAUNCHES ANTI-BRIBERY COMPENDIUM

Posted by wrageblog under Compliance monitors, FCPA, Gift Hospitality & Travel, OECD, TRACE, charitable contributions | Tags: , |
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Today, TRACE launched The TRACE Compendium, the only online, fully-searchable database containing summaries and analyses of international anti-bribery enforcement actions and investigations in the U.S. and throughout the world. Users can quickly bring themselves up-to-speed on the latest enforcement trends by pulling up summaries based on categories, such as cases involving gifts and hospitality, cases resulting in the imposition of a compliance monitor or all cases involving a specific country.

The TRACE Compendium contains summaries of all U.S. Foreign Corrupt Practices Act (FCPA) enforcement actions, as well as summaries of cases and ongoing investigations by authorities outside of the U.S. The TRACE Compendium will initially contain summaries of hundreds of enforcement actions by agencies such as the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the United Kingdom’s Serious Fraud Office, the Munich Public Prosecutor’s Office, the Swedish Prosecution Authority and the Public Prosecutor’s Office of Japan. The TRACE Compendium will be kept current, with new summaries published as soon as the latest developments are announced.

In creating the TRACE Compendium, TRACE collaborated with many different partners, including international law firms and many of the companies involved in particular bribery investigations. The goal is to produce and maintain the most accurate and thorough review of international anti-bribery enforcement activity available.

Visit the TRACE Compendium to stay on top of the latest international anti-bribery enforcement activity.

 

October 5, 2009

TRACE Benchmarking Survey: Facilitation Payments

Posted by wrageblog under Compliance Strategies, FCPA, Facilitating Payments, OECD, TRACE, enforcement | Tags: , , |
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In the recent TRACE benchmarking survey on facilitating payments, more than 45 percent of respondents said that if such payments were prohibited everywhere, their jobs would be easier, and another 48 percent said such a prohibition would not affect their jobs at all. Fewer than 7 percent of those responding said their jobs would be more difficult if facilitation payments were banned. Our finding that 93 percent of respondents’ jobs would be easier or unaffected if facilitation payments were banned confirms the growing recognition worldwide that what grease payments tend to facilitate is more demands and, in many cases, they make doing business even more difficult.

Seventy-six percent of respondents stated that they believe it is possible to do business successfully without making facilitation payments if there is sufficient management support and careful planning.  Buttressing this, 71% believe the employees of their company either never, or only rarely, make facilitation payments, regardless of whether facilitation payments are permitted under their corporate policies.  When respondents were asked to gauge the level of risk facilitation payments pose to a company with respect to books and records violations or violations of other internal accounting controls, 58% assess such risk level as medium to high.   Asked to assess how likely their company is to face a governmental investigation or prosecution related to facilitation payments, just over half believe they are moderately or highly likely to face such an investigation in the country where they are headquartered, and 40% believe they are likely to be investigated or prosecuted in the country where the payment is made. 

To see the full report, please visit the TRACE website.