ANTI-BRIBERY AND CORRUPTION REVIEW JUNE 2017 CONTENTS Global contacts 3 World Map 4 Foreword 6 Europe, the Middle East and Africa 7 Belgium 8 Czech Republic 10 France 12 Germany 14 Italy 18 Luxembourg 19 Poland 20 Romania 21 Russia 24 Slovak Republic 27 Spain 29 The Netherlands 30 Turkey 32 Ukraine 33 United Arab Emirates 35 United Kingdom 37 The Americas 40 Brazil 41 United States of America 43 Asia Pacific 47 Australia 48 Hong Kong 50 Indonesia 52 Japan 54 South Korea 55 People’s Republic of China 57 Singapore 59 Thailand 61 ANTI-BRIBERY AND CORRUPTION REVIEW
GLOBAL CONTACTS
EUROPE, THE MIDDLE EAST AND AFRICA United Arab Emirates Belgium James Abbott +971 4503 2608 Sébastien Ryelandt +32 2533 5988 Matthew Shanahan +971 4503 2723 Dorothée Vermeiren +32 2533 5063 United Kingdom Czech Republic Roger Best +44 20 7006 1640 Jan Dobrý +420 22255 5252 Luke Tolaini +44 20 7006 4666 France Patricia Barratt +44 20 7006 8853 Thomas Baudesson +33 14405 5443 Judith Seddon +44 20 7006 4820 Charles-Henri Boeringer +33 14405 2464 THE AMERICAS Arthur Millerand +33 14405 5446 Brazil Germany Anthony Oldfield +55 113019 6010 Heiner Hugger +49 697199 1283 Patrick Jackson +55 113019 6017 David Pasewaldt +49 697199 1453 United States of America Gerson Raiser +49 697199 1450 David DiBari +1 202912 5098 Jochen Pörtge +49 2114355 5459 Megan Gordon +1 202912 5021 Italy Catherine Ennis +1 202912 5009 Antonio Golino +39 028063 4509 ASIA PACIFIC Luxembourg Australia Albert Moro +352 485050 204 Diana Chang +61 28922 8003 Olivier Poelmans +352 485050 421 Jenni Hill +61 89262 5582 Morocco Kirsten Scott +61 89262 5517 Mustapha Mourahib +212 52264 4310 Kate Godhard +61 28922 8021 Poland Hong Kong Marcin Cieminski +48 22429 9515 Wendy Wysong +852 2826 3460 Pawel Pogorzelski +48 22429 9508 Richard Sharpe +852 2826 2427 Romania Indonesia*** Daniel Badea +40 216666 101 Linda Widyati +62 21 2988 8301 Bianca Alecu +40 216666 127 Gideon Manullang +62 21 2988 8348 Russia Japan Timur Aitkulov +7 495725 6415 Michelle Mizutani +81 36632 6646 Olga Semushina +7 495725 6418 Masayuki Okamoto +81 36632 6665 Saudi Arabia People’s Republic of China Khalid Al-Abdulkareem +966 11481 9740 Wendy Wysong +852 2826 3460 Slovak Republic* Lei Shi +852 2826 3547 Alex Cook +420 22255 5212 Tina Wu +86 106535 2264 Stanislav Holec +420 22255 5251 Feifei Yu +852 2825 8091 Spain Singapore**** Bernardo Del Rosal +34 91590 7566 Kabir Singh +65 6410 2273 Sonia Trendafilova +34 91590 4172 Shobna Chandran +65 6410 2281 Andrew Foo +65 6506 2790 The Netherlands Jeroen Ouwehand +31 20711 9130 South Korea Simone Peek +31 20711 9182 Thomas Walsh +852 2825 8052 Nicholas Turner +852 2825 8854 Turkey** Mete Yegin +90 212339 0012 Thailand Andrew Matthews +66 2401 8822 Seda Işınman +90 212339 0074 Jared Grubb +90 212339 0007 Vipavee Kaosala +66 2401 8829 Ukraine – Redcliffe Partners Sergiy Gryshko +38 044 390 22 19
* Contributed by lawyers from our Czech Republic office. ** Contributed by Yegin Ciftci Attorney Partnership, our associated firm in Turkey. *** Contributed by Linda Widyati & Partners, our associated firm in Indonesia. **** Contributed by Cavenagh Law LLP, our Formal Law Alliance partner in Singapore.
June 2017 3 ANTI-BRIBERY AND CORRUPTION REVIEW
WORLD MAP
Please click on the country name on the interactive map below to take you directly to the relevant chapter.
CZECH REPUBLIC
GERMANY
THE NETHERLANDS UNITED KINGDOM BELGIUM FRANCE UNITED STATES OF AMERICA SPAIN
LUXEMBOURG
ITALY
BRAZIL
4 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
RUSSIA
CZECH POLAND REPUBLIC SLOVAK REPUBLIC
GERMANY
UKRAINE
ROMANIA PEOPLE’S REPUBLIC OF CHINA
TURKEY JAPAN SOUTH KOREA HONG KONG ITALY THAILAND UNITED ARAB EMIRATES INDONESIA
SINGAPORE
AUSTRALIA
June 2017 5 ANTI-BRIBERY AND CORRUPTION REVIEW
FOREWORD
The spotlight on anti-bribery and corruption compliance programmes continues to intensify as a number of countries adopt measures designed to make it easier to prosecute companies. Most significantly, France’s Sapin II law requires companies subject to the provisions to adopt effective anti-corruption procedures, and has created a new agency to monitor compliance with these new requirements. The Netherlands has introduced requirements for certain companies to describe their anti-corruption procedures in their directors’ report (or to explain why they do not have any), while Thailand has published a Handbook setting out measures which should be adopted by companies to prevent bribery, in the context of Thai corporate liability. Australia meanwhile is consulting on a proposed corporate offence of failing to prevent foreign bribery, with a defence of having a proper system of internal controls and compliance in place – similar to the offence, and related ‘appropriate procedures’ defence, of failure to prevent bribery under section 7 of the UK Bribery Act.
The corporate liability theme is further developed in new initiatives on different forms of deferred prosecution agreements/plea bargains (in France, Australia and Japan), while transparency in respect of corporate ownership, or in respect of the assets of public officials, is the subject of new legislation in the UK, the Slovak Republic and Ukraine.
Elsewhere, in a clear recognition of the benefits for prosecutors of encouraging individuals to report suspicions of bribery, there are developments in relation to protections for whistleblowers in the Czech Republic, the UAE, Russia, Germany and Australia.
The bar on anti-corruption compliance continues to be raised, and it is important for international companies to continue to review what they have to do to address the risks to their business, and to their reputation, and for them to keep up-to-date with ABC developments in the jurisdictions in which they operate.
Patricia Barratt and David Pasewaldt, Editors
Patricia Barratt David Pasewaldt Director of Anti‑Bribery Counsel Compliance Frankfurt London T: +49 697199 1453 T: +44 20 7006 8853 E: david.pasewaldt@ E: patricia.barratt@ cliffordchance.com cliffordchance.com
6 June 2017 EUROPE, THE MIDDLE EAST AND AFRICA ANTI-BRIBERY AND CORRUPTION REVIEW
BELGIUM
Changes to legislation Prosecutions and investigative measures against a Increased penalties for officials enforcement actions magistrate involved in the negotiation of the criminal settlement with the Belgian In 2016, Belgium substantially increased In terms of enforcement actions and national. It is alleged that this magistrate the criminal fines for bribery of public prosecutions, several high profile cases obtained a gift of favour to a non-profit officials of a foreign state or an have made headlines in 2016. intergovernmental organisation. Previously, organisation that he is in charge of, in exchange for the conclusion of the foreign bribery was sanctioned with the In early 2016, the Brussels Court of criminal settlement agreement. In addition, same criminal penalty as bribery involving Appeal issued a judgment confirming the the matter has led to the creation of a a Belgian public official. The minimum fine convictions of 14 public officials, 35 parliamentary investigation commission. has now tripled and the maximum has contractors and 24 companies involved quintupled. The prison sentences for in a high profile corruption case relating In another high-profile case, the former foreign bribery remain unchanged. This to contracts tendered by the Belgian head of the Belgian judicial police in change in legislation is a response to the Buildings Agency (Régie des bâtiments). Brussels was briefly detained and held for OECD’s criticism on this point in its report The Court of Appeal pronounced interrogation on charges of bribery and issued in February 2016. (suspended) prison sentences of up to corruption within the police force, following three years and fines of up to his indictment in 2015 for passive Mandatory exclusion period for EUR 110,000. An amount of EUR corruption and money laundering. companies 100,000 was confiscated as being the In June 2016, Belgium, implementing instrument of the bribery. The total three EU Directives, passed a law which amount of bribes leading up to these Enforcement trends provides that companies that have been convictions was estimated at EUR Statistics definitively convicted of bribery offences 380,135.85 and the value of the Generally speaking, there have been few (including bribery of a foreign public contracts awarded at EUR 16,633,306. enforcement cases in Belgium and there official) must be excluded from public is very little case law. Recent years have procurement award procedures unless Furthermore, several Belgian nationals seen even less activity due to relocations they can show that they took sufficient have become implicated in the so-called of staff and budget cuts in the judiciary. measures to demonstrate their reliability. ‘Kazakhgate’ scandal involving the (suspiciously) expeditious passing of a Bill According to statistics published by the Draft law on the abolition of the in Parliament to extend the possibilities for Belgian Service for Criminal Policy, there principle of mutually exclusive liability settlement in criminal cases. It is said that were 14 convictions for private corruption A draft Bill designed to amend the the law was adopted to allow a Belgian and 56 convictions for public bribery in current Belgian legal principle of mutually national of Kazakh origin to avoid 2015. No distinction is made between exclusive liability of natural and legal prosecution. It is also alleged that the foreign bribery and domestic bribery. persons, further to a recommendation by former French president, Mr. Sarkozy, the OECD, remains pending before pushed for the adoption of the new law In addition, the records of the Belgian Parliament. Although the Bill was and that a former president of the Belgian Financial Intelligence Processing Unit submitted to the Council of State for an Senate, a lawyer who advised the Belgian (Cellule de Traitement des Informations opinion and was discussed in the national, traded in influence to push for Financières/Cel voor Financiële relevant parliamentary commission in late the adoption of the new law. The matter is Informatieverwerking, or CTIF-CFI), which 2015, no further steps appear to have currently under investigation. At the processes suspicious financial been taken to pass the law. It is therefore beginning of this year, new information transactions related to money laundering unclear when the Bill may be approved surfaced which has led to additional and terrorist financing, show that in 2014 and enter into force. it reported twelve cases of embezzlement
8 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
and corruption to the judicial authorities, implement its recommendations, assigning cases between judges, representing a total amount of EUR 8.9 particularly with regard to improving the standardisation of the rules of professional million, compared to eight cases in 2015, arrangements regarding the declaration conduct and more detailed information on representing a total amount of of assets, monitoring compliance with the disciplinary proceedings concerning EUR 23.3 million. rules of integrity by the parliamentary judges and prosecutors, including by chambers, and the training of Members means of a specific publication on case Other developments of Parliament in matters of integrity. law in this area”. GRECO report On 11 January 2017, the Group of States With regard to judges and prosecutors, In light of the foregoing, GRECO against Corruption (GRECO) published a GRECO welcomes certain actions which considers that the measures taken by the report evaluating Belgium’s implementation have been taken, such as the adoption of Belgian authorities to implement its of the recommendations in GRECO’s standard profiles for managerial positions recommendations are very limited and Fourth Round Evaluation Report dated and the proposal of measures to remedy concludes that the currently very low level 28 August 2014 on the prevention of the lack of periodic general reports on the of compliance with these corruption in respect of Members of functioning of the courts and the recommendations is unsatisfactory. It has Parliament, judges and prosecutors. prosecution service. The activity report of therefore called on the head of the the francophone disciplinary body Belgian delegation to submit a report on GRECO concludes that Belgium has not containing some statistics on disciplinary progress in implementing the outstanding satisfactorily implemented or dealt with any proceedings is also considered to be a recommendations (i.e. all the of the 15 recommendations contained in positive element. Nevertheless, GRECO recommendations) as soon as possible the 2014 Report. Four recommendations considers that “more substantive work is and by 31 October 2017 at the latest. have been partly implemented and 11 have required on various aspects, including the not been implemented. rules and guarantees applicable to judges GRECO also invited the Belgian in the administrative courts, over and authorities to authorise, at their earliest Insofar as Members of Parliament are above the Council of State, the conditions convenience, the publication of this concerned, GRECO expresses its regret under which use is made of substitute report, which has been done. that no measures have been taken to judges, evaluating the arrangements for BACK TO MAP
June 2017 9 ANTI-BRIBERY AND CORRUPTION REVIEW
CZECH REPUBLIC
Changes to legislation institutions are obliged to collect basic companies to create several A number of measures aimed at enhancing information on the accounts owned by cooperative anti‑corruption schemes transparency or otherwise combating their customers; the Czech National Bank that promote transparency, especially in corruption have recently been proposed or is responsible for administering the relation to transactions between passed. In January 2017, Parliament Central Registry of Accounts. The aim is healthcare professionals and approved an amendment to the Act on to support certain state authorities in the pharmaceutical companies. Conflicts of Interest, a change that has detection and prosecution of offences, been widely discussed, particularly in light especially in relation to economic crimes. The implementation of the Act on the of the fact that a well-known business Civil Service also continues. To enhance leader currently also holds the portfolio of In April 2016, Parliament enacted the the transparency of the civil service, the Minister of Finance. The Act provides that new Public Procurement Act to reflect professional résumés of all senior civil a company which is more than 25% European Union legislation. The Act servants will be published online. owned by a member of the government is relaxes some of the strict rules contained Moreover, civil servants will have their not eligible to bid for public procurement in current legislation on the one hand, bonuses reduced to prevent corruption contracts. In addition, members of the and makes it easier to blacklist and misuse of public money. Additionally, government and of Parliament will no contractors for misconduct on the other. the Bill on the Public Prosecutor’s Office, longer be able to own, hold shares in, or The Act also focuses on the digitisation which has already been approved by the control any legal entity engaged in radio or of public procurement. In addition, as government and is now going through television broadcasting. from 1 July 2016, all state and public Parliament, aims to increase the institutions, local government units, public effectiveness of the public prosecution The disputed Act on Electronic Records enterprises and legal entities in which a service by creating a Special Public of Sales was approved by Parliament in state or local government authority has a Prosecutor who will not fall under the September 2015 and became effective majority stake are obliged to publish all supervision of the Supreme Public on 1 December 2016 (to be phased in newly concluded contracts with a value Prosecutor, with the aim of making the gradually). The Act places an obligation of over CZK 50,000 (approximately EUR office more independent. on all sellers and service providers (with 1,900), excluding VAT, in the Registry of some exceptions) to report information Contracts. Contracts (and contract Prosecutions and on all sales generating cash revenues to metadata) must be published in an open enforcement actions and machine-readable format. Otherwise, the local financial administration body. In April 2017, a well-known lobbyist was they will be considered ineffective. Many Such measures are aimed at minimising released from prison following a decision NGOs perceive this to be a strong tax fraud. of the Supreme Court. The lobbyist had anti‑corruption measure. been sentenced to four years in prison In August 2016, the Act on Association in for corruption, later changed to fraud, in In February 2017, the government Political Parties and Political Movements relation to the purchase of military approved a draft Act on Protection of was amended to make the funding of equipment. The media were taken aback Whistleblowers, which protects – within political parties more transparent. The by the Supreme Court’s decision, which the framework of employment law – those amendment creates a new Authority for is yet to be published. the Supervision of the Funding of Political who report unlawful conduct in the public interest. The absence of such protection Parties, and sets further limits on In June 2015, one Member of Parliament has long been criticised by many NGOs. donations made to political parties by charged in May 2012 with taking bribes companies or private persons. and stripped of his parliamentary immunity Further initiatives later that year, was sentenced to eight and One issue currently under discussion is In September 2016, Parliament enacted half years in prison. The verdict has not corruption in healthcare. The Ministry of the Act on the Central Registry of yet taken effect. In autumn 2016, a court Health is trying to cooperate with health Accounts as a means of fighting ruled that the wiretappings that formed the insurance and pharmaceutical corruption. Banks and other credit main evidence in the case were illegal and
10 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
the case has been sent back to the to eight and a half years in prison. few of these prosecutions have resulted investigation phase for the gathering of She was charged with professional in final sentences. Combating corruption further evidence. misconduct in relation to licences issued is a stated priority of the current to unauthorised solar plants. The verdict government and various anti-corruption In September 2016, two former Mayors has not yet taken effect and will be policies have been newly established at and several city councillors of Prague were reviewed by the Court of Appeal. central and local levels. The sitting accused and found guilty of having Minister of Finance named combating tax launched an illegal public procurement In March 2015, a former head of the elite fraud as his top priority and during the procedure for Opencard (the public Na Homolce hospital in Prague, and last three years the newly established transportation operation system in Prague), several others were accused of Special Tax Fraud Unit has revealed tax causing damage to the city of Prague of corruption, bribery and manipulation of fraud amounting to EUR 300 million. CZK 25 million (approximately EUR public procurement. The criminal 970,000). All of the accused were given proceedings are still pending before the Public officials are required to report the suspended sentences of two to three court and all of those charged have been receipt of all possessions, gifts, income years. The verdict has not yet taken effect. released on bail. and obligations to a publicly accessible Register of Conflicts of Interest. There are In March 2016, the European Anti-Fraud Criminal proceedings against a former also plans to place the same obligation Office (Office Européen de Lutte Defence Minister charged in June 2012 on judges. A significant number of civil Anti‑Fraude – OLAF) initiated a formal with the misuse of power have been servants have been found to be in breach investigation into a Czech company close referred back to the State Prosecutor for of this reporting duty, but a failure to to the Minister of Finance for suspected further investigation. She was stripped of report is only subject to a relatively EU subsidy-fraud of CZK 50 million, her parliamentary immunity later that year. small fine. (approximately EUR 1.9 million). The Minister of Finance has denied any links Enforcement trends BACK TO MAP to the company and all related There has been a significant increase in accusations. The police decision is high-profile corruption investigations expected in spring 2017. during the last few years and a number of high-profile politicians, lobbyists and In February 2016, the director of the business leaders have been accused of Energy Regulatory Office was sentenced corruption and bribery. To date, however,
June 2017 11 ANTI-BRIBERY AND CORRUPTION REVIEW
FRANCE
Changes to legislation area in which the company pursues but applies to wrongful conduct outside Sapin II its activities; France by “persons habitually residing in France” or “having all or part of their A statute dealing with transparency, the • accounting control procedures to economic activity in France.” fight against corruption and the ensure that the company’s books and modernization of economic life (Sapin II) accounts are not used for fraud or Furthermore, where the offence is was enacted in December 2016. concealment of corruption or committed abroad, Sapin II removes the It completely overhauls anti-corruption influence peddling; compliance in France, and brings it in line traditional preconditions for prosecution in with international standards. • training programmes to prevent France, i.e. that the conduct at issue be corruption and influence peddling; prohibited under the law of the country in which it was committed and that the Sapin II creates an obligation to prevent • disciplinary sanctions for violations of prosecution be instigated only at the corruption risks for French companies company rules on corruption. with at least 500 employees, or belonging behest of the Prosecutor. This is likely to increase the number of cases which French to a group of companies which has at Sapin II also created a new administrative authorities may investigate and prosecute. least 500 employees, and a turnover or Agency (the Agence française group turnover of more than EUR 100 anticorruption or French anti-corruption Sapin II introuces a new criminal million. To fulfil this obligation, these agency) tasked with monitoring the sanction, which is similar to the companies are required to adopt effective compliance of French companies with monitorship procedure imposed by U.S. anti-corruption procedures, including: these new obligations. authorities and aims at ensuring future • a code of conduct that provides to all compliance: in the event of a conviction To this end, the Agency has certain employees a clear and accessible or judgment for corruption or influence investigative powers (in particular, to definition of the different types of peddling a company may be forced to conduct on-site review, make document behaviour which are prohibited as implement a compliance programme requests and conduct interviews). In the potentially constituting acts of under the supervision of the Agency, at event of a violation, or if a company’s corruption or influence peddling; its own expense, within a maximum anti-corruption procedures are deemed period of three years. • an internal whistleblowing system that insufficient or ineffective, the Agency’s enables employees to report code of enforcement committee has the power to Finally, and most importantly, Sapin II conduct violations; issue warnings or orders to comply, or to introduces the Convention judiciaire impose administrative sanctions (up to • due diligence procedures to verify the d’intérêt public (judicial agreement of EUR 1 million for companies and EUR integrity of partners (clients, public interest or CJIP), a French 200,000 for individuals, together with the suppliers, intermediaries); equivalent of a DPA. More specifically, the possible publication of the sanction). • a risk map, i.e. a document which Act gives the Prosecutor, which in many instances will be the Parquet National identifies, analyses and prioritises the Sapin II also expands the extraterritorial Financier (national financial prosecutor or company’s risk exposure to external application of French law with regards to PNF), the power to negotiate CJIPs with corrupt solicitations, notably regarding corruption. It is no longer limited to legal persons under investigation for the business sector and geographic corruption or influence peddling engaged corruption, influence peddling or in by French nationals outside France, laundering of tax evasion proceeds.
12 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
Under a CJIP, the suspect would Prosecutions and defendants and negotiating sanctions are undertake to (i) pay a fine in proportion enforcement actions alien to the culture of French prosecutors. with the profit derived from the This new tool will therefore require a There have been no noteworthy cases wrongdoing, capped at 30% of the period of adaptation, in which the PNF involving bribery or corruption since our company’s average annual turnover over develops its understanding of how to use last Anti-Bribery and Corruption Review the past three years, and (ii) implement a it and in what circumstances. in May 2016.1 compliance programme for a maximum period of three years under the control BACK TO MAP of the Agency. The CJIP itself would be Enforcement trends The creation of the CJIP is likely to published on the Agency’s website. modify the PNF’s approach to Importantly, however, the legal person is investigation and prosecution of not required to admit its guilt, and the corruption-related offences, and to CJIP does not amount to a conviction. increase the efficiency of the French If it successfully carries out all of its response to these crimes. However, for undertakings, it can no longer the most part, co-operating with be prosecuted.
1 For further details, please visit the French section of our Anti-Bribery and Corruption Review 2016 (pages 10 et seq.) at https://www.cliffordchance.com/ briefings/2016/05/anti-bribery_andcorruptionreview-may20160.html.
June 2017 13 ANTI-BRIBERY AND CORRUPTION REVIEW
GERMANY
Changes to legislation medical aids or medical devices, which Federal Court of Justice Following the 2015 changes to criminal are intended for direct application on (Bundesgerichtshof) dated 29 March anti-corruption legislation by the German the patient by the medical professional 2012. In this decision, the court found Law on Fighting Corruption,2 the focus of or his assistant, or (iii) referral of that contract doctors in private practice anti-corruption legislation has now patients or examination material. (niedergelassene Vertragsärzte) were neither “public officials” nor “agents”. expanded to other sectors. In this regard, • Section 299b of the German Criminal According to this case law, illegal benefits the German Law on Fighting Corruption Code sets out a mirror offence for the granted to contract doctors in private in the Healthcare Sector as well as the “donors”. Thus, a person is criminally practice in order to influence their German Law on Combating Betting liable for the offence of giving bribes in behaviour were not prohibited under Fraud and Manipulation in the Sport the healthcare sector (Bestechung im German criminal anti-corruption law, Sector have now entered into effect, and Gesundheitswesen) if he offers, specifically neither under sections 331 et there are further draft laws in the pipeline. promises or grants a benefit to certain seqq. of the German Criminal Code, members of the medical profession in which stipulate the criminal offences for German Law on Fighting Corruption connection with the exercise of their the public sector, nor under section 299 in the Healthcare Sector now in force profession, for them or a third person of the German Criminal Code, which On 4 June 2016, the German Law on on the basis of an agreement of stipulates the criminal offence of taking Fighting Corruption in the Healthcare wrongdoing in return for obtaining an and giving bribes in commercial practice. Sector (Gesetz zur Bekämpfung von unfair advantage in competition in the Korruption im Gesundheitswesen) context of the cases described above. entered into effect. The key elements of However, the implementation of the this new law are the new criminal • Criminal offences under sections 299a German Law on Fighting Corruption in offences of taking and giving bribes in the and 299b of the German Criminal Code the Healthcare Sector has been criticised healthcare sector in sections 299a and carry a potential penalty of up to three for excluding pharmacists. As explained 299b German Criminal Code years’ imprisonment or a pecuniary above, section 299a of the German (Strafgesetzbuch): penalty (Geldstrafe). In especially Criminal Code now provides for criminal serious cases, stipulated in section 300 liability of certain members of the medical • Under section 299a of the German of the German Criminal Code, the profession for the offence of taking bribes Criminal Code, certain members of the maximum penalty is imprisonment for a in the healthcare sector where they medical profession are criminally liable term of five years. An especially serious demand, allow themselves to be for the offence of taking bribes in the case occurs if the offence relates to a promised or accept a benefit in return for healthcare sector (Bestechlichkeit im significant benefit (Vorteil großen granting, an unfair advantage in Gesundheitswesen) if they (as Ausmaßes) – neither German statutory competition in the context of the act of “receivers”), in connection with the provisions nor German case law “prescribing” (verschreiben) exercise of their profession, demand, provides a relevant threshold in this pharmaceuticals, remedies, medical aids allow themselves to be promised or regard – or the offender acts on a or medical devices. In contrast, the first accept a benefit for themselves or a commercial basis (gewerbsmäßig) or as draft version of this new law provided third person on the basis of an – a member of a gang (bandenmäßig). similar criminal liability in the context of expressed or implied – agreement of the act of “delivering” (abgeben) such wrongdoing (Unrechtsvereinbarung) in The German Law on Fighting Corruption medical goods and, thus, included the return for granting an unfair advantage in the Healthcare Sector was pharmacists’ profession. According to the in competition in the context of implemented to close a gap in the explanatory notes to the first draft version (i) prescribing pharmaceuticals, criminal liability under German criminal of the new law, “delivery” was supposed remedies, medical aids or medical anti-corruption law which had been to encompass any kind of handing over devices, (ii) obtaining pharmaceuticals, highlighted by a decision of the German to a patient, including administering
2 For further details, please visit the German section of our Anti-Bribery and Corruption Review 2016 (pages 12 et seqq.) at https://www.cliffordchance.com/ briefings/2016/05/anti-bribery_andcorruptionreview-may20160.html.
14 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
(verabreichen) medication. The deletion of that include corrupt agreements Gesetzes zur Einführung eines this term has meant that pharmacists regarding professional sport Wettbewerbsregisters) to fight corrupt and now fall outside the scope of competitions even if there is no illegal business practices and to facilitate section 299a of the German Criminal special relation to sporting bets. fair competition, which is currently being Code, and has led to the criticism that discussed by the German Federal gaps in criminal liability remain. This new law has to be seen against the Parliament. The draft law would require background of the so-called football companies that had engaged in corrupt German Law on Combating Betting betting scandal involving the former activities or other economic crime to be Fraud and Manipulation in the umpire Robert Hoyzer, which emerged in listed on the new nation-wide register. Sports Sector 2005, and which revealed manipulation of Public sector customers would be On 19 April 2017, the German Law on numerous football games in the German required to review this register before Combating Betting Fraud and second football league, the German awarding a relevant contract in order to Manipulation in the Sport Sector Football Association Cup Competition exclude “unfair” companies from the (Einundfünfzigstes Gesetz zur Änderung (DFB-Pokal) and the regional football public procurement process. Under des Strafgesetzbuches – Strafbarkeit von league through “bribery” of umpires and certain conditions, exclusion would Sportwettbetrug und der Manipulation von football players. According to be mandatory. berufssportlichen Wettbewerben) came investigators, the individuals involved in into effect. In particular, this law sets out the manipulation generated high profits Currently, there are similar registers in new criminal offences in sections 265c by placing bets on the relevant matches. nine of Germany’s 16 Federal States and 265d of the German Criminal Code: The explanatory notes to the new law (Bundesländer), including Hesse, state that the criminal law in respect of North‑Rhine-Westphalia, Bavaria, Berlin • Under the new section 265c such acts was previously inadequate. In and Hamburg. Such registers are the paragraph 1 of the German Criminal particular, fraud under section 263 of the subject of some controversy, partly Code, athletes or coaches are German Criminal Code requires proof of because companies may be listed for criminally liable if they (as “receivers”) a specific pecuniary loss, which is often offences other than corruption, and also demand, allow themselves to be difficult to assess in cases of the because companies may be listed even promised or accept a benefit for manipulation of sporting competitions. before a final conviction. A number of themselves or a third person on the Furthermore, the criminal offence of registers list companies as soon as basis of an – expressed or implied – taking and giving bribes in commercial investigation proceedings are agreement of wrongdoing practice under section 299 of the commenced or even where investigation (Unrechtsvereinbarung) that the athlete German Criminal Code does not apply proceedings have ended without a or coach will, in return, influence the either because it requires acts in conviction, which has been criticized by course or the result of a competition to connection with the receipt of goods and some as being contrary to the principle of the advantage of the opponent and, services (bei dem Bezug von Waren oder the presumption of innocence. thereby, an illegal benefit will be Dienstleistungen), which would not apply received from a public sport bet in to sporting bets. In particular, the current draft law proposes: relation to that competition. The new section 265c paragraph 2 of the • that companies may be listed following Draft law to establish a nation-wide German Criminal Code mirrors the a final conviction; central competition register offence for the “donor”. The criminal On 22 February 2017, following calls • that companies may be listed following offence under 265c of the German from, amongst others, the German conviction for a variety of offences, Criminal Code (Sportwettbetrug) is conference of the Ministers of Justice including corruption in the public and limited to agreements in connection (Justizministerkonferenz) and the German private sector, money laundering, tax with sports competitions which relate conference of the Ministers of Economics evasion and other economic crimes; to sporting bets. (Wirtschaftsministerkonferenz), the • a potential mandatory ban from all • In contrast, section 265d of the German Ministry of Economics public procurement contracts for a German Criminal Code (Manipulation (Bundeswirtschaftsministerium) presented maximum term of five years; von berufssportlichen Wettbewerben) a draft law to establish a nation-wide introduced similar criminal offences central competition register (Entwurf eines
June 2017 15 ANTI-BRIBERY AND CORRUPTION REVIEW
• that companies be able to apply for with allegations of giving bribes to foreign (section 299 of the German Criminal early de-listing through a public officials in return for the conclusion Code) in connection with the construction “self‑cleansing” (Selbstreinigung) of purchase agreements. The of the new Berlin city airport. In addition, procedure that would include, in investigation proceedings initially the court ordered the defendant to pay particular, cooperation with the encompassed fourteen individuals under EUR 150,000 equivalent to the amount of enforcement authorities in the investigation (this increased to nineteen the relevant economic benefit he investigation of the violation. individuals under investigation by received. Two further defendants, the September 2016), most of whom are CEO and one other employee of a Dutch Calls for a law to protect employees of the relevant armament construction company, were sentenced whistleblowers enterprise. Later in 2016, these to imprisonment of 23 months and In the context of a Parliamentary investigation proceedings were expanded 15 months, respectively, on probation, Investigation Committee to the parent company of the armament for (aiding and abetting) the giving of (Parlamentarischer enterprise, which was also searched in bribes in commercial practice Untersuchungsausschuss) by the June 2016 and again in March 2017. (section 299 of the German Criminal German Federal Parliament (Bundestag) In particular, the former General Counsel Code). According to the prosecutors, into so-called cum/ex-trades, various and Chief Compliance Officer of that the former division manager of the Berlin politicians have called again for the parent company was put under airport company received a cash implementation of a new law to promote investigation on the grounds that he was payment of EUR 150,000 in return for transparency and protect whistleblowers aware of, but did not intervene and stop, approving the payment of invoices by the from discrimination. They argue that relevant payments. Dutch construction company amounting whistleblowers are essential for the to EUR 65 million without further disclosure of offences in banks and In September 2016, the Erfurt verification. The judgment is not yet final companies and thus, have to be prosecution authority charged six as the former division manager of the protected. According to supporters of individuals with corruption in the public Berlin airport company has filed an this initiative, such protection requires sector and other offences in connection appeal against his conviction with the changes to German labour law and civil with the purchase and equipment of court of higher instance. service law in order to provide certain buses. The proceedings relate to, privileges to whistleblowers in the future. amongst other matters, 66 cases of Further prosecutions and enforcement In particular, they are calling for giving bribes (section 334 of the German actions relate to a multi-million corruption employees to have the right to report Criminal Code) to representatives of two affair concerning public construction violations of legal obligations in public transportation companies in the projects in the German Federal State of connection with the employer’s business German Federal State of Thuringia. In the North Rhine-Westphalia. Ferdinand activities to external authorities or, under months before indictment, several flats Tiggemann, former Chief Executive certain conditions, to the public, and to and offices were searched and several Officer of the North Rhine-Westphalian be entitled to protection against individuals were arrested. According to building and real estate managing detrimental treatment for having done so. prosecutors, investigation proceedings authority, was given a prison sentence of against further individuals are being seven years and six months (without Prosecutions and conducted in parallel. probation) (more than the six year enforcement actions sentence sought by the prosecution) for In October 2016, after almost two years taking bribes (section 332 German Several investigations and court cases of court proceedings,3 the Cottbus Criminal Code) and breach of trust have caught the attention of the media. regional court (Landgericht) sentenced (section 266 German Criminal Code). the former division manager of the Berlin According to the prosecutors, In January 2016, several offices of a airport company to a prison sentence of Mr Tiggemann had disclosed information German armament enterprise were three and a half years (without probation) about upcoming construction projects to searched by prosecutors in connection for taking bribes in commercial practice intermediate buyers over a period of
3 In December 2014, the Neuruppin prosecution authority commenced an investigation into alleged corruption offences in connection with the construction of the new Berlin city airport. For further details, please visit the German section of our Anti-Bribery and Corruption Review July 2015 (page 13) at https://www.cliffordchance.com/ briefings/2015/07/anti-bribery_andcorruptionreview-july2015.html.
16 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
several years in return for payments proceedings due to alleged violations of Act” (Karenzzeitgesetz) which came into amounting to at least EUR 178,000. the provisions under the new German effect on 2 July 2015.5 This new law Following such information, the Law on Fighting Corruption in the enabled the German Federal Government intermediate buyers were able to buy the Healthcare Sector regarding to impose a waiting period of up to relevant properties in advance and then representatives of a hospital and a eighteen months on certain public resell them to the German Federal State medical centre already. According to officials after resigning from public office of North Rhine-Westphalia with statements from the leading prosecutor and before starting a new job in the surcharges of millions of Euros. of this Central Office, the medical care private sector under certain industry, including hospitals, has a circumstances, in order to reduce the risk Enforcement trends considerable backlog regarding relevant of granting (illegal) benefits to (former) As a general trend, the focus of necessary compliance standards, public officials by way of highly corruption investigation proceedings whereas pharmaceutical companies remunerated positions in the private continues to expand further from generally apply such standards already. sector. These amendments have to be industrial companies in the last decade to seen against the background of the other sectors, including the financial Furthermore, German prosecution moves by various politicians to private sector, in more recent years. In particular, authorities are increasingly tending to companies after resigning from their following the major strengthening of bring corruption charges not just against public functions, which raised concerns German criminal anti-corruption employees in sales or other business with regard to corruption. The new law legislation in 2014 and 2015 by, amongst departments of companies, but also provides that an expert committee must others, the German Law on Fighting against members of legal and compliance make a recommendation to the German Corruption,4 the focus of the legislator departments for aiding and abetting, by Federal Government in each case as to has shifted to specific sectors, namely failing to prevent corrupt acts committed whether a waiting period should be the healthcare and sports sectors. In this by others. imposed. The relevant committee was regard, the Central Office for Combating established in July 2016, one year after Property Crimes and Corruption in the There are other areas in which the the “Waiting Period Act” had come into Healthcare Sector (Zentralstelle zur German legislator appears to be less effect, leading to public criticism of delays Bekämpfung von Vermögensstraftaten eager to enforce applicable criminal in implementing the new legislation. und Korruption im Gesundheitswesen) at anti‑corruption laws and relevant the Frankfurt General Prosecution regulations. This is particularly true BACK TO MAP authority, initiated investigation regarding the so-called “Waiting Period
4 For further details, please visit the German section of our Anti-Bribery and Corruption Review 2016 (pages 12 et seq.) at https://www.cliffordchance.com/ briefings/2016/05/anti-bribery_andcorruptionreview-may20160.html. 5 For further details, please visit the German section of our Anti-Bribery and Corruption Review 2015 (page 12) at https://www.cliffordchance.com/briefings/2015/07/anti- bribery_andcorruptionreview-july2015.html.
June 2017 17 ANTI-BRIBERY AND CORRUPTION REVIEW
ITALY
Changes to legislation These amendments have implications in 2010 to obtain oil and gas contracts. Italy has adopted new legislation under Law No. 231/2001 on criminal The trial was due to start on 5 December extending the range of its commercial corporate liability, in that both the revised 2016. Eni and two ex-Eni senior bribery offences. Law No. 38/2017 offence under Article 2635, and the new executives had been acquitted by an (which was published on 30 March 2017 offence under Article 2635bis will be Italian judge in October 2015 on the in the Official Gazette and came into predicate offences triggering vicarious same charges, but a higher court force on 14 April 2017) aims to ensure corporate liability. overturned that judgment in February that Italian law is fully consistent with EU 2016 and sent the case back to Framework Decision 2003/568/JHA on Corporate entities, if found guilty of these prosecutors for further investigation. combating corruption in the private offences, are subject to a fine of between A number of other companies being sector. In particular this law includes EUR 100,000 to EUR 930,000 for Private investigated in connection with the (i) a revised version of Article 2635 Civil Corruption and a fine of between allegations were apparently set up by Code (Private Corruption) and (ii) the EUR 52,000 to 620,000 for Instigation to Mossack Fonseca, according to papers introduction of a new offence under Private Corruption, along with bans, published by the International Consortium Article 2635bis Civil Code (Instigation to including, debarment from public sector of Investigative Journalists, as part of the Private Corruption). procurement, which can be applied on a Panama Papers. It was also reported that precautionary basis, for a time period Eni and Shell had been charged in In particular, Article 2635 of the Civil ranging from three months to two years. connection with a controversial Code has been amended as follows: acquisition of an offshore block in Nigeria Prosecutions and in 2011. However, Eni announced in • it will apply not only to the top enforcement actions December 2016 that the investigation managers within companies, but also had been closed, indicating “the propriety Political corruption has dominated to persons who carry out activities with of the transaction”. de facto executive functions; headlines in Italy in recent years, focused on ongoing criminal investigations in • it is extended to intermediaries; Venice (Mose), Milan (Expo) and Rome Enforcement trends The Italian government continues to • it will apply not only to promising and (Mafia Capitale and, more recently, focus on the prevention of corruption. paying, but also to requesting money Consip). In these proceedings several The National Anti-corruption Authority or other undue benefit; managers and politicians were arrested for alleged corruption and conspiracy (ANAC) has often been appointed by the • an offence may be committed even if and, in Mafia Capitale, also for government to carry out a preliminary the company has not suffered membership in the Mafia. Additionally, the review and analysis of the main Italian damages (previously damages were an Prosecution Service has seized a large public tenders (i.e. Milan’s Expo trade fair express requirement); number of bank accounts, business and Jubilee 2016). activities and real estate assets. Article 2635bis Civil Code makes it an BACK TO MAP offence to attempt to corrupt a top In July 2016 a Milan court indicted Eni, manager or a person with executive Saipem and the former chief executive of functions if the promise, payment or Eni, in relation to allegations that Saipem, request is not accepted. or an intermediary, paid bribes in Algeria
18 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
LUXEMBOURG
There have been no changes to anti‑corruption legislation, or any significant corruption prosecutions or enforcement actions since our last Anti-Bribery and Corruption Review in May 2016.6
BACK TO MAP
6 For further details, please visit the Luxembourg section of our Anti-Bribery and Corruption Review 2016 (page 16) at https://www.cliffordchance.com/briefings/2016/05/ anti-bribery_andcorruptionreview-may20160.html.
June 2017 19 ANTI-BRIBERY AND CORRUPTION REVIEW
POLAND
Changes to legislation This legislation implements Directive individuals and legal entities. A decision Recent months have seen a number of 2014/42/EU of the European Parliament to put an enterprise into compulsory changes and proposals for new and of the Council of 3 April 2014 on administration may be issued by a legislation in the area of criminal law, the freezing and confiscation of public prosecutor and take effect, including regulations that may affect the instrumentalities and proceeds of crime subject to court approval, during the enforcement of anti-corruption laws. in the European Union. The following criminal investigation. The owner of the three key changes are to be introduced: enterprise has no influence on the choice of the administrator. Corporate criminal liability • Confiscation of an enterprise belonging In May 2016, the Polish Ministry of Justice to a perpetrator or to a third party that Falsifying invoices presented draft guidelines on proposed intentionally allowed the enterprise to be The Polish Criminal Code has also been changes to the Act on the Liability of used to commit a crime. Three amended to increase the penalties for Collective Entities for Acts Prohibited under prerequisites will need to be fulfilled for falsifying invoices. Falsifying invoices is Penalty (the Liability Act). According to the confiscation of an enterprise: (i) the now a criminal offence subject to a these guidelines, the criminal liability of an enterprise must have been used to penalty of up to 25 years of imprisonment entity will no longer be secondary to the commit a criminal offence or to hide the and a fine of up to PLN 6 million, in cases criminal liability of an individual acting on its proceeds of crime; (ii) the perpetrator where the value of the falsified invoice or behalf. In order to start criminal must have obtained proceeds of a invoices exceeds PLN 10 million. proceedings against a corporate entity it will significant value (i.e. more than PLN be sufficient to establish that an individual 200,000 – approximately EUR 50,000); acting on its behalf committed an offence and (iii) the enterprise must be owned Prosecution and which has brought or could bring benefit to by an individual. The confiscated enforcement actions the corporate entity. This would allow enterprise will become the property of No significant prosecutions or criminal proceedings against corporate the State Treasury. enforcement actions have been reported. entities to run in parallel with criminal • Extended confiscation. This is a proceedings against individuals. The Enforcement trends guidelines also suggest an increase of fines presumption that the assets that a The Polish Minister of Justice together (but without providing numbers), which perpetrator obtained during the last five with the Polish Special Forces would not be dependent on the corporate years before a final verdict is issued, Coordinator announced that the plans for entity’s revenue. There have been no further originated from or in connection with 2017 are to unify the anti-corruption updates on possible changes to the Liability crime. This covers not only benefits regulations, but no details have been Act since the May 2016 guidelines. derived by the perpetrator from the criminal offences, but generally all provided so far. Extended confiscation assets of the perpetrator. BACK TO MAP On 27 April 2017, amendments to the • Compulsory administration of an Polish Criminal Code regarding enterprise during criminal proceedings. extended confiscation came into force. This security measure applies both to
20 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
ROMANIA
Changes to legislation had an important impact on the criminal Expected pardon law Constitutional Court decisions offence of abuse in office. The court A collective pardon law for certain crimes Decisions of the Romanian Constitutional considered that the terminology “duty sanctioned by a maximum five-year prison Court continue to have far-reaching faultily performed” should be interpreted sentence was debated at the beginning of implications for criminal law generally. as meaning “performed by breaching a the year but approval has been postponed As described in our May 2016 law” stricto sensu (i.e. a law directly as a result of public protests. There are Anti‑Bribery and Corruption Review,7 the issued by Parliament, a Government rumours that the pardon could extend to Constitutional Court has the power to Emergency Ordinance or simple corruption offences. require the legislature to amend aspects Government Ordinance) and not in of criminal law that it has found to be breach of rules that do not meet the Prosecutions and unconstitutional. Recent decisions of the threshold of being considered a law, such enforcement actions as internal regulations, government Constitutional Court are mainly aimed at A number of high-profile cases were decisions or administrative acts which set reinforcing observance of fair trial rights in prosecuted and/or sent to trial in the last personal conduct requirements. line with European Court of Human few months (end of 2016/beginning of Rights case law, but a number of recent 2017), involving several Ministers and Furthermore, the Constitutional Court decisions also have ramifications for other public officials. anti‑bribery and corruption investigations. found that the lack of a threshold for damages to the rights or interest of an Microsoft II individual/entity meant that the legislation Enforcement of interception warrants In November 2016, the National setting out the offence of abuse in office by the Intelligence Services Anti‑Corruption Directorate (DNA) was unconstitutional. As reported in our May 2016 Review, launched a criminal investigation against Decision 51 (Constitutional Court two former Microsoft directors and a The government tried to amend the Decision No. 51 of 16 February 2015) representative of Fujitsu Siemens criminal legislation following Decision 405 established that the delegation of the Computers GmbH. The three are by issuing Emergency Ordinance 13 enforcement of interception warrants and accused of being accomplices to (No. 13/01.02.2017). However, this was recording activity to the Intelligence repeated abuses of office by a public immediately repealed following strong Services (the SRI) was unconstitutional. official, in relation to the acquisition of IT protests against the changes. licences by various Ministries in Romania. As part of this clear finding that the SRI had The current situation is further confused systematically overreached in criminal The DNA alleges that the total amount of by indications that some courts are proceedings, the Constitutional Court damages caused to the national budget treating abuse in office as having been expressly left open the right of those because of the IT licensing contracts partially abolished and are acquitting already subject to a final judgment to obtain between 2004 and 2008 is approximately persons charged with breaching the benefit of the Constitutional Court’s USD 67 million. decision by way of bringing an extraordinary regulations that do not constitute a “law” stricto sensu. appeal/revision application. The wider The criminal case is still at an investigative implications of this decision are therefore stage and there are procedural matters The Minister of Justice announced that a potentially very significant (see also below). preventing the DNA from investigating the draft law to change the Criminal Code in former Ministers involved in the approval accordance with Decision 405 is being Unconstitutionality of the “abuse in of the IT contracts (i.e. lack of consent prepared and will be submitted to office” criminal offence from the Presidency or the Parliament to Parliament shortly. Decision 405 (Constitutional Court the commencement of the criminal Decision No. 405 of 15 June 2016) has investigation against the former Ministers).
7 For further details, please visit the Romanian section of our Anti-Bribery and Corruption Review 2016 (pages 18 et seq.) at https://www.cliffordchance.com/ briefings/2016/05/anti-bribery_andcorruptionreview-may20160.html.
June 2017 21 ANTI-BRIBERY AND CORRUPTION REVIEW
Bute Boxing Gala and Child Protection (DGASPC) at the In addition, the General Prosecutor of In March 2017 the Supreme Court time to commit abuse of office. Romania stated that fighting against sentenced former Regional Development corruption, addressing tax evasion, Minister Elena Udrea to six years in According to the DNA, Mr Dragnea took recovering prejudices/proceeds of crime prison for passive bribery and abuse of action to arrange for two employees of and providing a framework for office, and acquitted her of the charge of DGASPC in Teleorman to keep their fundamental rights will continue to be attempted use of false or incomplete positions with the institution and receive a priorities of the Public Ministry in 2017. statements. The ruling of the Supreme salary, although he knew that they Court is not final and may be appealed to actually worked for the Teleorman branch The General Prosecutor also said that the the five-judge panel of the High Court of of the Social Democrat Party. National Agency for the Management of Cassation and Justice. Impounded Assets is now operational Enforcement trends and will help the Public Ministry to seize The Supreme Court ordered the former According to the DNA’s report of activity and recover the proceeds of crime. minister to pay RON 8.1 million in 2016, identification of fraud and (approximately EUR 1.7 million) to the corruption in the field of public However, it is difficult to predict National Tourism Authority, as well as procurement was a priority in 2016. anti‑corruption trends given the recent EUR 900,000 to two witnesses. The court Investigations focused particularly on and current criticisms, both external and also ordered the seizure of approximately infrastructure-related acquisitions, IT internal, and the disclosures about the RON 1 million (approximately EUR services, health, restitution of state methods used by the DNA to investigate 200,000) from the assets of the former owned property and public services. and obtain evidence in criminal cases by Tourism and Development Minister. More than a quarter of the defendants working with the Romanian Intelligence sent to trial in 2016 had committed Services (see below). The prosecutors alleged that a services criminal offences consisting of abuse of contract signed on 24 June 2011, and office. Damages calculated by the DNA Other developments awarded by way of negotiation, in the to have been caused by acts of abuse of The DNA has been closely involved in absence of a tender announcement, office in 2016 alone amount to over prosecuting high-profile criminal cases. between the Regional Development and EUR 260 million. However, in the context of considerable Tourism Ministry and another company contentious public debate about the role for the provision of advertisement The value of fines levied in 2016 amounts of the SRI in corruption cases, the services at events associated with an to EUR 667 million, and a third of the National Union of Judges of Romania international professional boxing gala individuals sent to trial had held a (UNJR) published a document on organised by the Romanian Boxing managerial position. More than 1,270 16 January 2017 (previously sent to it by Federation, was the result of bribery. defendants were sent to trial for high and the Supreme Council of National Defence medium level corruption offences. (CSAT) on 16 February 2016) concerning Romanian Social Democrat leader These included three Ministers, six the SRI’s competences within the criminal Liviu Dragnea Senators, 11 Deputies, 47 Mayors, justice system. The CSAT went on to Liviu Dragnea, a key figure in the current 16 Magistrates and 21 CEOs of acknowledge that the relationship government, was indicted by DNA national companies. between prosecutors and the security prosecutors on 15 July 2016 for instigating services was such that it had indeed abuse of office and instigating forgery. The DNA’s priorities for 2017 are to resulted in “the creation of mixed teams continue investigations in high-level consisting of representatives of criminal According to the prosecutors, from corruption cases, as well as fraud and prosecution authorities, with the view to July 2006 to December 2012, in his corruption investigations in the fields of counterbalancing the risks sprung from capacity as President of Teleorman public procurement, health and the conduct of certain criminal activities”. County Council and President of Social infrastructure. The DNA will also focus on This has also been acknowledged by Democrat Party, Liviu Dragnea incited the the EU funds-related fraud, corruption in former Romanian President, Traian Executive Director of Teleorman County’s the judiciary, the recovery of damages Băsescu, Romania’s General Prosecutor General Directorate for Social Security and extended confiscation. and by the head of the SRI. Calls for an
22 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
investigation into the detail of the high-ranking officials over the past five to (the Romanian Parliament), found that the membership or competence of such joint ten years, including that of former Prime DNA had no legal basis to act in prosecutor/intelligence service teams Minister Adrian Nastase. examining whether the government was have so far been refused. justified in issuing Ordinance 13, and that The DNA was reported to be its investigation of members of the There have been a number of press investigating members of the current government in relation to the enactment reports based on disclosures by government who enacted Ordinance 13 of Ordinance 13 was therefore illegal. Sebastian Ghita, about alleged SRI (which, as above, sought to amend interference. Mr Ghita, a former member aspects of Romanian criminal law, BACK TO MAP of the Lower Chamber, and a member of including redefining the abuse in office the Parliamentary Commission for the criminal offence). However, the Supervision of the Secret Services, was Constitutional Court, in a dramatic ruling reported to have confirmed that the on a potential conflict between the intelligence services played a role in executive power (the Romanian important corruption prosecutions of government) and the legislative power
June 2017 23 ANTI-BRIBERY AND CORRUPTION REVIEW
RUSSIA
Changes to legislation the employer is only possible with the Amendments to the Anti-Corruption Law – compensation approval of a special review panel or provisions on penalties for for damages collective anti-corruption body at corruption-related offences On 10 August 2016 a draft law the employer). First, the penalties for commercial bribery introducing amendments to Federal Law (Article 204) under the Criminal Code have No. 273-FZ On Preventing Corruption The draft law is currently in the process been made dependent on the amount of (the Anti-Corruption Law) was submitted of being amended. the bribe, the categories being “significant” to the Russian State Duma. This draft law (exceeding RUB 25,000, approximately contemplates that compensation for Criminal Code USD 435), “large” (exceeding damages will be payable not only by the On 15 July 2016, amendments to the RUB 150,000, approximately USD 2,610) person who committed the corruption Criminal Code of the Russian Federation or “very large” (exceeding RUB 1 million, offence, but also by his immediate family, came into effect, aimed at increasing the approximately USD 17,425). These relatives and close friends if there is penalties for corruption-related offences. amendments mirror similar provisions sufficient evidence that money, valuables related to giving and accepting a bribe Amendments to the definitions of or other property were obtained by them (Articles 290 and 291 of the Criminal corruption-related offences as a result of the corruption offence or Code) and acting as an intermediary for a In the Criminal Code, the definitions of constitute the proceeds from the sale of bribe (Article 291.1 of the Criminal Code). offences such as accepting a bribe such property. Claims for compensation (Article 290) and giving a bribe (Article in respect of such damages are not Second, the Criminal Code provisions 291) were amended in line with Article 1 subject to any limitation period. This draft were amended by adding alternative of the OECD Convention on Combating law is currently being considered by the types of penalties, reducing the Bribery of Foreign Public Officials in Russian State Duma. applicable fines and lengthening the International Business Transactions, terms of imprisonment. Protection for whistleblowers which obliges States parties to the On 7 February 2017, the Ministry of Convention to criminalise the offering, Generally speaking, the rationale for Labour and Social Protection of the promising or giving of any undue these amendments was that in most Russian Federation announced a new pecuniary or other advantage to a foreign cases persons found guilty of the above draft law amending the Anti-Corruption public official, not only for that official, but corruption-related offences have been Law. This draft law is intended to also for a third party. The definition of sentenced to extremely high fines, introduce measures to protect people commercial bribery (Article 204) under the calculated as a multiple of the value of who report corruption offences. The draft Criminal Code was also brought into the bribe, as this was the only alternative law would provide protection for people conformity with the above definitions of to imprisonment. Ultimately such who report corruption offences or accepting and giving a bribe. sentences were often unenforceable otherwise assist in preventing corruption, because offenders were unable to pay Finally, the definition of incitement to bribe including the following measures: the full amount of the fines, and court (Article 304) under the Criminal Code was bailiffs had to apply to the courts to • keeping the person’s identity and amended: the range of persons who can change the sentences from fines to the content of the report on the be deemed incited to accept a bribe was imprisonment. In view of this, legislators offence confidential; made consistent with the range of are seeking to give the courts greater • provision of free legal aid; persons who can be deemed to accept discretion in determining the penalty for bribes. These amendments mean that criminal offences. • protection from unauthorised dismissal incitement to bribe may be committed and other infringements of the not only in relation to public officials, but New corruption-related offences employment rights of the person also in relation to foreign public officials Three new corruption-related offences reporting the offence (e.g. dismissal by and officials of international organisations. have been added to the Criminal Code:
24 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
acting as an intermediary for a commercial Information on a beneficial owner must The list of bodies authorised to request bribe (Article 204.1), small‑scale include his/her name, surname and that legal entities disclose their beneficial commercial bribery (Article 204.2), and patronymic (if applicable), citizenship, owners and the procedure governing the small-scale bribery (Article 291.2). date of birth, passport (or other identity disclosure of such information were to be document) details, migration card adopted by the Russian government by Small-scale commercial bribery and details, data of the document 7 September 2016, but are still pending. small-scale bribery are applicable confirming the right of a foreign national Until they are adopted, the provisions of when the amount of the bribe/ or stateless person to stay (reside) in the Anti-Mo0Service issued a non- commercial bribe does not exceed the Russian Federation, address of the binding information letter indicating that it RUB 10,000 (approximately USD 175). place of residence, and taxpayer has the authority to request the above The criminalisation of small-scale identification number. information from legal entities about their corruption‑related offences was driven beneficial owners and the steps they The above obligation applies to all by the fact that in the period from 2012 have taken to establish the identity of legal entities with a few exceptions. to 2015, an overwhelming number of all their beneficial owners. The letter also State and municipal agencies, and criminal cases related to bribery and explains that legal entities may prove that legal entities established under their commercial bribery involved bribes/ they have taken steps to obtain authority, state corporations, commercial bribes of less than information about their beneficial owners organisations in which the Russian RUB 10,000 (approximately USD 175). by providing requests sent to Federation has a 50% or more stake shareholders or other controlling persons and issuers of securities admitted to The penalties for small-scale bribery are and the respective responses. trading on a regulated financial market lower than those for bribery. that are subject to disclosure In light of the above obligations, There is a simplified procedure for obligations under the Russian legal entities are entitled to request that investigating small-scale corruption‑related securities law are not obliged to their shareholders/controlling persons offences, and they fall within the comply with this obligation. provide information required to determine the beneficial owners of the competence of the magistrates’ courts. • Legal entities are obliged to: regularly, requesting company. In turn, in any case at least once per year, shareholders/controlling persons of Anti-money laundering law update and document information on Russian companies are obliged to On 21 December 2016, new their beneficial owners; and store provide such information. amendments to Federal Law No. 115-FZ information on their beneficial owners dated 7 August 2001 On Preventing the and on the steps that they have taken On 21 December 2016, the Legalisation (Laundering) of the Proceeds to establish the identity of their Administrative Offences Code of the of Crime and the Financing of Terrorism beneficial owners for a period of at Russian Federation was amended by (the Anti-Money Laundering Law) entered least five years after the date that they adding Article 14.25.1, envisaging the into force, imposing new obligations on obtained the information. Russian legal entities to disclose following sanctions for non-compliance information on their beneficial owners, • Information about beneficial owners is with Article 6.1 of the Anti-Money which is an important anti-corruption to be disclosed in legal entities’ regular Laundering Law, which establishes an measure. In particular: reports as set out by Russian law. obligation for legal entities to disclose information on their beneficial owners: • Legal entities are obliged to provide • Legal entities are obliged to hold (i) an administrative penalty on officials of information on their beneficial owners information on their beneficial owners up to RUB 40,000 (approximately or steps taken to establish the identity (an individual who directly or indirectly USD 700), and on legal entities of up of their beneficial owners, confirmed by holds a stake of 25% or more in a to RUB 500,000 (approximately the relevant underlying documents, at Russian company or otherwise controls USD 8,700). its actions) and to take appropriate and the request of an authorised agency or reasonable steps to establish the the tax authorities. identity of their beneficial owners.
June 2017 25 ANTI-BRIBERY AND CORRUPTION REVIEW
Prosecutions and On 24 June 2016, the governor of the accused of embezzling RUB 56 million enforcement actions Kirov region, Nikita Belykh, was arrested (approximately USD 976,000) given to on a charge of accepting a OJSC GSK in connection with a public In recent months, there has been a EUR 400,000 bribe. He was caught in a contract for construction of the largest significant increase in corruption-related Moscow restaurant accepting the bribe detention centres in Europe, Kresty-2. investigations into the conduct of public from a German businessman, Yuri In a separate case, the head of the local officials, a number of which have caught Zudhaimer. Mr Belykh allegedly received branch of Rosselkhozbank in North the attention of the media. the bribe to protect the interests of two Ossetia, Georgy Kalaev, was charged in On 14 November 2016, Economic companies based in the Kirov region June 2016, with accepting a commercial Development Minister Alexei Ulyukaev and controlled by Mr Zudhaimer: JSC bribe of RUB 5.5 million (approximately was arrested on suspicion of accepting a Novovyatsky Ski Factory and LLC USD 96,000). Mr Kalaev is alleged to bribe of USD 2 million. It is reported that Forestry Management Company. have been given the bribe by the head of the bribe was given to him for facilitating an agricultural company for the illegal On 4 April 2017, an investigation was a positive opinion of the Ministry of provision of a RUB 10 million launched against the head of the Udmurt Economic Development allowing PJSC (approximately USD 174,000) loan on the Republic, Alexander Solovyov, based on Rosneft Oil Company to enter into an basis of fabricated financial statements. allegations that he took bribes totalling agreement on the acquisition of the more than RUB 140 million government’s 50% stake in PJSC Enforcement trends (approximately USD 2.4 million). Bashneft Oil Company. Mr Ulyukaev is Given the above, it appears that the Mr Solovyov allegedly received the the first public official at such a high level Russian law-enforcement authorities are money from companies involved in to have been arrested for a currently more focused on investigating building bridges over the Kama River and corruption‑related offence since 1953. corruption offences committed by public the Bui River near the town of Kambarka officials rather than commercial bribery. On 8 September 2016 the deputy head in the Udmurt Republic. In return, it is This is also evidenced by the fact that the of “T” Department (a unit focusing on alleged that Mr Solovyov was expected recent amendments to the law, which offences in the fuel and energy sector) of to ensure the prompt allocation of public require more transparency in relation to the Interior Ministry’s Anti-Corruption funds from the federal and regional the ownership of assets, are mainly Directorate, Dmitry Zakharchenko, was budgets to pay for the construction work, aimed at banning or preventing the arrested on suspicion of accepting a and also to procure the issuance of illegitimate practice of public officials bribe of RUB 7 million (approximately licences for geological surveying of the concealing their ownership of assets by USD 122,000) through an intermediary area, sand mining and sand gravel the assistance of foreign law instruments, from an unknown person. He was production. He also reportedly received a such as trusts, etc. ultimately charged with accepting a stake worth RUB 2.7 million “very large” bribe, abusing powers and (approximately USD 47,000) in a BACK TO MAP obstructing justice and pre-trial commercial company. investigation. It was also reported that Recent notable examples of during a search of an apartment owned corruption‑related cases against officials by a relative of Mr Zakharchenko, an of commercial organisations include unprecedented amount of cash equal to criminal proceedings initiated in USD 120 million and EUR 2 billion, March 2017 against the general director weighing approximately 1.2 tonnes of OJSC GSK, Viktor Kudrin. He is was found.
26 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
SLOVAK REPUBLIC
Changes to legislation into any public sector agreement. ban on practising as a doctor for three Register of public sector partners A person who entered into a relevant years. Dr. Fischer entered into a plea In November 2016, as part of the agreement prior to 1 February 2017 has bargain with the prosecutor and as a government’s efforts to increase until 31 July 2017 to fulfil the registration result, he has avoided a prison sentence transparency with regard to public obligation. The public sector partner has of between three and eight years. expenditure, the National Council of the to appoint an “authorised person” (who Slovak Republic adopted Act No. must be an attorney, notary, bank, In mid December 2014, the police 315/2016 Coll., on the Register of Public auditor or tax advisor) to procure the detained the head of the Pediatric Clinic Sector Partners, which became effective registration on its behalf. The authorised of the Children’s Faculty Hospital in on 1 February 2017. person will have an important role in the Bratislava. Mr. Vladimir Polák was caught registration process, being the only in the act of bribery as he accepted EUR The new legislation means that the public person able to initiate the registration 500 and a bottle of alcohol from the sector (central government, local procedure. The authorised person is also father of a patient in exchange for government and entities controlled by required to verify the information on consent to treatment in another member central or local government) may only ultimate beneficial ownership recorded in state of the European Union. He was transfer funds and property to persons the register at least once a year. given a suspended sentence of two years who are registered in a public register and he also received a fine of EUR 5,000 and who have disclosed their ultimate Non-compliance with the obligations and a ban on practising as a doctor for beneficial owner(s). Recipients of funds or under the new Act can result in severe two years. Mr. Polák also lost his licence property from the public sector are sanctions. A person (either the public to practise medicine. referred to as public sector partners. sector partner or the ultimate beneficial owner) in breach of the obligation to In December 2016, the National Criminal All individuals and legal entities that have register correct and complete information Agency (NAKA) launched a criminal entered or will enter into any agreement faces a potential fine of up to the prosecution in the Bašternák case. with the State or local government, or equivalent of the economic benefit Bašternák’s firm, BL-202, allegedly with any legal entity financed or obtained in connection with the breach or received excessive VAT refunds after it controlled by the State or local up to EUR 1 million. If a public sector bought and sold seven apartments in the government, are considered to be public partner fails to satisfy its registration residential complex Bonaparte (where sector partners. According to this requirements, there is also the risk that its Slovak Prime Minister has a flat) in 2012. legislation, a public sector partner is any contractual party may be entitled to Interior Minister, Robert Kaliňák, is facing natural or legal person that receives terminate the agreement. A member of suspicions that he has been helping funds, assets or other property rights the statutory body of the partner which businessman Ladislav Bašternák to avoid from public resources, including EU funds fails to comply with the obligations under criminal prosecution. (with certain narrow exemptions). The the Act also risks being disqualified from new register will contain data on the acting as a member of a statutory or Bašternák reportedly bought the beneficial owners of public sector supervisory body. apartments for EUR 12 million, which the partners, i.e. any natural persons who criminal office at the Financial actually control another person that does Prosecutions and Administration considers to be an business with the State, as well as any excessive price. The company then enforcement actions applied for a VAT refund of EUR 2 million, natural person for whom such entity In February 2015, Dr. Viliam Fischer, a which the State paid, in spite of suspicion carries out business or trade. The law high-profile cardiologist, was accused by that the transaction was fictitious. The provides an exhaustive list of all persons the family of a deceased patient of real value of the property is likely to have who are deemed to be beneficial owners. accepting EUR 3,000 in cash. Fischer been around EUR 1.5 million, which received a suspended sentence of two would mean that Bašternák illegally Each public sector partner has to be years and probation of four years. He obtained over EUR 1.7 million on the registered in the register prior to entering was given a fine of EUR 15,000 and a
June 2017 27 ANTI-BRIBERY AND CORRUPTION REVIEW
deal. However, the charge made by the This case was among the issues that the Enforcement trends investigator of the financial police U.S. Department of State highlighted in The cases highlighted above indicate an department at the National Criminal its 2016 annual report on the state of increasing focus in the Slovak Republic Agency against Bašternák was failing to human rights in Slovakia. The report on corruption in the healthcare sector. pay tax and insurance, despite tax fraud mentions the allegations that Mr Kaliňák The focus on healthcare is also being on the table since the start of the used his influence to stop the suggested by recent attempts by the case. Later, police chief Tibor Gašpar investigation into Bašternák for tax fraud. Ministry of Health to cooperate with explained that NAKA had no other option The report observes that he publicly health insurance and pharmaceutical because legislation in 2012 did not denied any connection with Bašternák at companies in order to create several recognise the crime of tax fraud. first, but that a leak of the Minister’s bank cooperative anti-corruption schemes that records by a bank officer indicated that promote transparency, especially in Where a person is charged with the he had received EUR 260,000 from a relation to payments made between criminal offence of failing to pay tax, a company in which he had purchased health care professionals and criminal penalty may be avoided where shares from Bašternák, the former pharmaceutical companies. the person “legally regrets” the act, and co-owner of the shares. The report adds pays the unpaid tax. In 2011, the that there have been suggestions that BACK TO MAP Constitutional Court confirmed that this payment was “a kickback Kaliňák legislation provides for criminal offences – received for shielding Bašternák from including tax fraud – to be legally criminal investigation”. regretted in order to avoid a jail sentence.
28 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
SPAIN
Changes to legislation In addition, as a consequence of the 2015 have an effective compliance programme The Spanish Criminal Code (SCC) was OECD Report which criticised Spain for not in place in order to avoid liability for a amended on 1 July 2015 by Organic Law focusing enough on prosecuting bribery in criminal offence, compliance focus on 1/2015, which introduced significant international commercial transactions crime prevention has become changes in relation to corporate criminal (section 286 ter SCC), the first investigations increasingly important. liability8. There have been no further related to this offence have been launched material legislative developments since over the past few years. In particular, there Therefore, over the past year, a group of those changes. are two important cases: (i) the Apyce case, compliance specialists has been working in which a Spanish publisher was accused on Spanish Standard Project 19601 or Prosecutions and of bribing public officials from Equatorial UNE 19601 which is expected to be Guinea in a contract for supplying books published in the Spanish Official Gazette enforcement actions and course materials to this country; and (ii) (Boletín Oficial del Estado) in May 2017. In recent years, the Pujol case, involving the Angola case, involving directors of the When it is published this will be the first the former president of Catalonia and his semi-public company from the defence time that Spain will have an official family, the Noós case, involving sector, Defex, regarding a contract for certifiable standard providing general members of the Royal Family, the supplying military equipment to Angola, guidelines for compliance systems in order Tarjetas Black case, involving the which has recently been extended to other to prevent criminal offences by companies. directors of Bankia, one of the most similar contracts in Egypt, Brazil, Cameroon important Spanish Saving Banks and the and Saudi Arabia. In February 2017 the first This project is the Spanish response to the former president of the IMF, the conviction regarding bribery in international international standardization process of ISO Bárcenas case, involving the former commercial transactions was issued in the 19600 on Compliance Management treasurer of the Popular party Group, the Apyce case. Systems (CMS), as well as the ISO 37001 Púnica case, involving public officials of standard on Anti-Bribery Management the Madrid Regional Government and Other developments Systems. Like these international standards, significant private and listed companies, Transparency International report the UNE 19601 contains requirements and and the ERE case in Sevilla, involving In January 2017, Transparency guidelines for implementing, evaluating, officials of the Andalusia Regional International presented the results of its maintaining and improving an effective Government, have all attracted Corruption Perceptions Index 2016, which compliance management system as well as widespread media attention. classifies 176 countries according to their recommendations regarding the elements perceived level of corruption. Spain is an organisation should rely on to ensure Enforcement trends ranked 41st, and even though it is not compliance with an adequate general Since the beginning of the economic categorized as a country with systemic compliance policy. crisis in 2008, there has been a notable corruption, the report mentions Spain’s increase in corruption cases brought recent political and business scandals. It should be noted that, while the adoption before the courts involving both of a Criminal Compliance Management politicians and private sector company In addition, Transparency International System certified as being in accordance executives accused of bribery. proposed a number of measures to with UNE 19601 Standard does not reduce corruption in Spain, such as guarantee the exclusion of corporate liability, The introduction of corporate criminal improving legal provisions in relation to the it will significantly reduce the risk of the liability in the SCC in 2010 has led to a offence of illicit enrichment and developing company being held criminally liable for parallel increase in the number of a law to protect whistleblowers. criminal offences committed by its cases where Spanish courts are managers or employees, since it constitutes investigating legal entities, both UNE 19601 Certifiable standard evidence of responsible management. companies from the private sector and Since the introduction of corporate political parties. criminal liability and the requirement to BACK TO MAP
8 For further details, please see the Spanish section of our Anti-Bribery and Corruption Review 2015 (page 20 et seq.) at: https://www.cliffordchance.com/ briefings/2015/07/anti-bribery_andcorruptionreview-july2015.html
June 2017 29 ANTI-BRIBERY AND CORRUPTION REVIEW
THE NETHERLANDS
Changes to legislation Anti-bribery and corruption is for the Dutch police and military in the Information on bribery and corruption focus area of new Corporate period from 2001 to 2012. prevention to be included in Governance Code directors’ report To reflect the growing focus by corporate The settlements consisted of two Listed companies and certain other legal enterprises on anti-bribery and corruption elements: (i) a fine and (ii) the confiscation entities will have to include information measures, this has been included as a of the proceeds of the bribery. According about their anti-bribery and corruption topic in the new Dutch Corporate to the Public Prosecutor, the following efforts in their directors’ report, with Governance Code (DCGC) as part of the factors were taken into account when regard to reporting periods commencing long-term value creation principle. determining the amount of the penalties: on or after 1 January 2017. • the period during which gifts were This principle requires management provided to public officials; The new reporting obligation applies to boards to develop a view on long-term legal entities that are listed, certain credit value creation by the company and its • the number of employees and public institutions and insurance companies and affiliates and formulate a strategy in line officials involved; with this view. One of the main topics legal entities that are designated based • the amount spent on gifts; on their size and function in society that management boards need to pay meet the following conditions: attention to when developing the strategy • the fact that the car importers all is the fight against corruption and bribery. cooperated with the investigation; • the average number of employees • the fact that the current management exceeds 500 in a financial year; and Compliance with the DCGC is based on boards of the car importers distanced the “comply or explain” principle, so if • the legal entity does not meet the themselves from the alleged conduct; conditions to fall within the scope of the management boards do not take the fight ‘medium-size companies’ exemption. against corruption and bribery into • the measures taken to strengthen the account when developing the strategy, compliance systems and ensure The relevant legal entities must include the they will need to explain why they did so compliance with anti-corruption following elements in their directors’ report in the annual report. legislation within the companies. regarding anti-bribery and corruption: Prosecutions and Other developments • a description of the business model of Auditors to assess corruption risks the legal entity; enforcement actions Settlements with car importers for During recent years there has been a • the anti-bribery and corruption policy, improperly influencing police and strong focus on the role of auditors in including the applicable procedures, military officials the prevention of bribery and corruption and the effects of this policy on the Recently the Dutch Public Prosecutor’s in the Netherlands. At the beginning of fight against bribery and corruption; Office (Openbaar Ministerie) announced 2016 the Netherlands Authority for the Financial Markets wrote to audit firms • the main anti-bribery and corruption that a number of car importers had asking them to focus on corruption risks risks that relate to the business activities reached settlement agreements involving when performing financial audits. of the legal entity and how these risks the payment of amounts ranging from To provide guidance to auditors on how are managed by the legal entity. EUR 2 million to EUR 12 million. The Public Prosecutor accused the car to address corruption risks during audits, the Netherlands Institute of Chartered If the relevant legal entity does not have importers of bribing one or more public Accountants (NBA) published Guide an anti-bribery and corruption policy in officials who were involved in fleet 1137 regarding corruption and the work place, it must explain why there is no management or procurement of vehicles of an auditor. such policy in place.
30 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
The Guide provides guidelines which elements focus on gaining insight in monitoring is an essential measure to auditors can use to assess risks and relation to internal controls addressing control these integrity risks. To provide identify corruption during the (annual) corruption risks. guidance to trust offices on how financial audit and other audit-related transaction monitoring needs to be activities. The Guide seeks to raise Trust offices to monitor integrity risk organised and executed, DNB published awareness with regard to corruption, The Dutch central bank (De Nederlansche Good Practices for transaction monitoring especially in the context of high-risk Bank, DNB) identified corruption, money by trust offices on 30 March 2017. countries, sectors and transactions. laundering, and terrorist financing, Furthermore, the Guide provides circumventing sanctions, (tax) fraud and BACK TO MAP guidelines with regard to elements that conflict of interests as the most auditors need to focus on when prominent integrity risks for trust offices performing financial audits. Most of these and, according to DNB, transaction
June 2017 31 ANTI-BRIBERY AND CORRUPTION REVIEW
TURKEY
Changes to legislation following the detention, in June 2015, the company and former managers of In April 2016, the Prime Minister of of 41 employees of the Turkish Aviation the Social Insurance Institute, were Turkey introduced Circular No. 2016/10 Institution (Türk Hava Kurumu), including sentenced to five years imprisonment, on Increasing Transparency and the former president of the Institution, which was subsequently decreased to Strengthening the Combat against on suspicion of accepting bribes from a four years and two months for good Corruption which also set out an action French firm in order to execute behaviour during the proceedings. plan for the years 2016 to 2019. agreements for purchasing certain However, following a change in the Prime helicopters from their firm. According to In February 2017, fourteen people Minister’s office in May 2016, the the indictment, the detained persons working at Adana Metropolitan Commission on Increasing Transparency laundered the illegitimate money Municipality, including the Mayor himself, and Strengthening the Combat against through a shell company, owned by were sentenced to five years Corruption was excluded from Circular the president’s son, by purchasing imprisonment for corruption and bribery. No. 2016/13 on Delegating Commission industrial oil. Duties to Members of Parliament which Other developments was issued by the new Prime Minister. In March 2016, a corruption case known Turkey continues to descend in the Therefore, it remains to be seen whether to the public as the Roche case was ranking of countries according to the action plan introduced by the Circular resolved after 12 years. This was initiated perceived levels of public corruption. on corruption will be implemented. back in 2004 following a tip-off by an In the most recent Corruption employee to the public prosecutor’s Perceptions Index published by Prosecutions and office about an issue involving the Transparency International in January difference in medicine prices between 2017, Turkey was ranked 75th among enforcement actions public and private hospitals. Although 176 countries (from 66th position last Investigations remain ongoing in relation the case had been dismissed due to the year), having fallen 22 places in this index to the bribery investigation launched in statute of limitations, the High Court of since 2013. This result suggests that the October 2014 into allegations that Appeals decided that the alleged crimes prosecutions of high-ranking public officials of the Fire Fighting Department of attracted a potential penalty of over ten officials in December 2013 and ongoing the Istanbul Metropolitan Municipality years imprisonment, resulting in the case investigations and prosecutions since took bribes from business owners in being reopened in order to be have reverberated in the public and the order to grant workplace permits for adjudicated before high criminal courts international arena. premises that did not meet the required instead of the criminal courts of first conditions for obtaining workplace instance. In March 2016, ten people, BACK TO MAP permits. Investigations also continue including the former general manager of
32 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
UKRAINE
Changes to legislation In March 2017, the Ukraine Parliament are vulnerable to threats or influence from Recent anti-corruption legislative changes extended the requirement to submit high-ranking corrupt officials who may in Ukraine have included the establishment E-Declarations to members of anti- be charged with bribery or other of specialised anti-corruption courts, corruption NGOs, presidential candidates corruption offences. electronic wealth declarations for public and parliamentary candidates, who were officials (E-Declarations) and a range of ordered to comply by 1 May 2017. Prosecutions and other anti-corruption preventive measures. These measures are controversial since enforcement actions they appear specifically to target anti- During 2016 the National Anti-Corruption corruption NGOs which receive foreign E-Declarations Bureau of Ukraine (the NABU) funding. Parliament also abolished an E-Declarations for public officials were investigated a constantly increasing obligation to submit E-Declarations for introduced in April 2016, and number of cases. The most recent and some categories of military servicemen implemented in practice in August 2016. famous cases are described below. The new E-Declarations measure requires participating in the Anti-Terrorist Operation in the East of Ukraine. all state officials, Members of Parliament New investigations based on the data and officials of local government bodies to provided in electronic declarations Other anti-corruption submit annual online reports setting out The total number of current investigations preventive measures details of their assets, income, based on the information set out in the In October 2016, the Cabinet of Ministers expenditure and financial obligations to E-Declarations is 34. Out of these, adopted “Measures for the prevention of the National Agency for Preventing 25 criminal proceedings have been corruption in the Ministries and other Corruption (the NAPC). In June 2016, the commenced so far. The subjects of these central executive bodies” which sets out NAPC adopted the standard form of the investigations are mainly judges, MPs a roadmap for each Ministry and agency E-Declarations, the procedure for and heads of local authorities. completing the form and the procedure of the Ukrainian government to implement anti-corruption measures. for maintaining the E-Declarations register. Arrest of the Head of State Fiscal As part of this roadmap, the NAPC Service of Ukraine published a model anti-corruption In addition to criminal liability, hefty In March 2017 NABU investigators programme for legal entities in March administrative fines of up to UAH 42,500 arrested the Head of the State Fiscal 2017. All entities participating in Ukrainian (approximately EUR 1,435) were Service of Ukraine (Mr. Roman Nasirov) public procurement tenders where the introduced for submitting false information on suspicion of abuse of office. in the E-Declarations in March 2016. expected value of the contract is equal to or exceeds UAH 20 million (approximately Later in March NABU investigators, in All senior Ukrainian government and EUR 675,676) are expected to follow this cooperation with the Prosecutor’s Office, parliamentary officials had to complete model anti-corruption programme. issued a notice of suspicion to and and submit their E-Declarations by arrested Mr. Nasirov and his alleged Anti-corruption courts 30 October 2016. Around 50,000 accomplice, the Head of Department of A new law “On the Judicial System and E-Declarations were filed, revealing that a debt recovery of the State Fiscal Service Status of the Judges” (adopted in June large number of Ukrainian top officials/ of Ukraine. politicians and their family members keep 2016) provides a basis for the millions of dollars in cash and own introduction of specialised anti-corruption Charges against them are related to the valuables such as luxury watches, courts, in particular, the Higher Anti- case of Mr. Oleksandr Onishchenko, an expensive cars and vintage wine Corruption Court. The draft law “On Anti- MP. The latter is suspected of a criminal collections. Ukraine’s Prosecutor General Corruption Courts” has been introduced, enterprise aimed at misappropriating announced that his office will investigate but has not yet been adopted. The funds in the course of natural gas all politicians/officials who declared rationale for the introduction of anti- production and sale under joint venture savings in excess of USD 100,000 and/or corruption courts is that the general agreements with the state company gifts of over USD 10,000. courts are too overloaded with cases and Ukrgasvydobuvannya. Damages to the
June 2017 33 ANTI-BRIBERY AND CORRUPTION REVIEW
State as a result of the suspected Bribery cases indictments remain unscheduled for criminal enterprise have been estimated In January 2017 NABU investigators hearing for over ten months, highlighting at EUR 102 million. arrested an assistant of a judge on the urgent need for the introduction of suspicion of receiving a bribe in the the anti-corruption courts. Charges against the Head of amount of USD 23,000 and fraud. Audit Chamber of Ukraine and The investigation continues. BACK TO MAP other authorities In March 2017 the NABU brought Enforcement trends charges against the Head of the Audit The NABU continues to focus on Chamber of Ukraine and the chief auditor allegations of corruption, particularly by of the Audit Chamber of Ukraine. The Ukrainian officials. However, there have charges against the two are based on the been no investigations resulting in alleged unlawful transfer of official convictions. Moreover, based on a recent housing into private property. NABU report, most corruption
34 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
UNITED ARAB EMIRATES
Changes to legislation • coordinate with international – if committed against UAE public The Emirate of Dubai issued a law (Dubai organisations in matters negatively funds or assets; and impacting Dubai’s economy. Law No.4 of 2016), establishing a new • the criminal and civil claims in relation “economic crimes super regulator”, the to a crime of bribery cannot be time- The DESC has yet to become operational Dubai Economic Security Centre (DESC), barred, nor does a sentence issued in at the time of writing this report, although which came into effect on 15 May 2016. relation to such claims fall away over its board and CEO have been appointed. time (Article 239bis 2). The UAE also introduced a number of Relevant amendments to the UAE changes to the Penal Code (Federal Law Prosecutions and No.3 of 1987) by Federal Decree-Law Penal Code No. 7 of 2016 dated 18 September The main amendments to the bribery enforcement actions 2016; these changes came into effect on offences are: The UAE authorities do not typically publish information on prosecutions or 29 October 2016. • the definition of a public official enforcement actions. However, the (Article 5), has been widened/clarified following cases of corruption made the Dubai’s new super regulator to include board chairmen and headlines in the local media. The DESC’s main objectives are to members, directors, managers and all maintain the Emirate’s position as a employees working in companies Fallout from the 1MDB Malaysia global financial and economic hub, to owned by the Federal or Emirate corruption scandal protect investors and to deal with issues governments (whether partly or wholly); such as fraud, bribery, money laundering In April 2016, it was reported that the UAE and terrorist financing. The law • an Employee of an international Central Bank ordered major UAE banks to establishing the DESC also contains the organisation is now expressly prohibited freeze the accounts of two former senior first UAE whistleblower protection from soliciting or accepting bribes officials in Abu Dhabi’s state-owned scheme, which includes protection from (Article 234). An Employee of an International Petroleum Investment Co discrimination in the workplace. The international organisation is now defined (IPIC), and to provide information about DESC has jurisdiction across the Emirate as “any person who occupies a position their deposits and transactions. The UAE of Dubai, including the Dubai International in an international organisation or is Central Bank did not set out the reasons Financial Centre (DIFC). authorised to act on its behalf” for issuing its order. (Article 6bis (1)), although an international The DESC’s powers allow it to: organisation is still not defined; IPIC has close business links to Malaysia’s scandal-hit sovereign wealth • the minimum amount of the fine for • make rules, including in relation to fund 1MDB, which is at the centre of breaches of any of the bribery imposing administrative penalties. corruption and money laundering provisions has been raised (Article A breach of the DESC law is subject to investigations in the U.S., Switzerland, 238) from AED 1,000 (approximately a fine of between AED 10,000 and Singapore and Luxembourg. AED 500,000 (approximately USD USD 271) to AED 5,000 (approximately USD 1,360); 2,720 to USD 135,900); UAE police officers • suspend trading on exchanges and the • a degree of extra-territorial application In March 2017, a Dubai police officer was application of trading rules; was introduced (Article 239bis 1) by sentenced to three years imprisonment applying the bribery provisions to acts for taking AED 30,000 (approximately • request the freezing of assets; committed outside the UAE: USD 8,150) in bribes for cancelling fines which had been issued to persons who • request police assistance and the – if either the perpetrator or the victim overstayed their UAE visas. The officer production of information; is a UAE national; was also fined AED 975,700 • monitor donations, commodities, – if committed by a UAE public servant (approximately USD 265,900) and securities and cash trades; and or a private sector employee; or ordered to repay AED 445,700
June 2017 35 ANTI-BRIBERY AND CORRUPTION REVIEW
(approximately USD 121,500) to the sting operation by the Dubai police who Enforcement trends Dubai immigration authority. The nine suspected the two of regularly While general enforcement outcomes are bribe-givers were convicted in absentia blackmailing persons who were in breach typically not made public or discussed, and sentenced to three years of immigration laws. the published reports on law enforcement imprisonment, a fine of AED 500,000 officers taking bribes suggests that this is (approximately USD 136,240) each and In June 2016, a Sharjah police officer an increasing focus for local authorities, ordered to repay the amounts lost by the was found guilty of taking a bribe of AED where anti-corruption units seem to be Dubai immigration authority. 3,000 (approximately USD 820) for particularly active. releasing a prisoner he was ordered to In February 2017, a Dubai police officer escort. The prisoner was charged with It has also been reported that the current was charged with bribery for soliciting two others with aiding and abetting. trend is towards proactive enforcement of money from a man suspected of the UAE Penal Code’s anti-bribery breaching UAE residency law instead of Abu Dhabi engineer corruption case provisions, as the UAE seeks to promote taking the man into custody. The officer In June 2016, the Abu Dhabi police transparency in business, to maintain its had demanded bribes ranging from AED arrested a soil expert on charges of position as a favoured international 500 and AED 1,000 (approximately USD taking a bribe of AED 15,000 business hub. 136 to USD 272). A second officer was (approximately USD 4,090) to finalise a charged with aiding and abetting. soil clearance transaction at a BACK TO MAP The officers were arrested following a government laboratory.
36 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
UNITED KINGDOM
Changes to legislation civil recovery action, and the court can entity with some nexus to the UK fails to The Criminal Finances Act, which received issue an interim freezing order preventing prevent a person associated with it from Royal Assent on 27 April 2017, introduces the respondent from dealing with it. facilitating the evasion of foreign taxes. a number of anti-bribery related measures. Where the property is located outside the It is a defence for the entity to have such Measures in the Act include the UK, the enforcement authority can ask prevention procedures in place as it was introduction of a new anti-corruption tool, the Secretary of State to request reasonable in all the circumstances for the unexplained wealth order, an extension assistance from the government of the that entity to have in place. of the powers of the Serious Fraud Office relevant country. The Act also provides and the introduction of the much for a criminal offence of making false or The government confirmed (in a letter anticipated offence of failing to prevent the misleading statements in response to a from the Minster of State for Security facilitation of tax evasion. Although the Act UWO. This measure “reflects the concern dated 9 November 2016) that it would has been passed, these measures have about those involved in corruption not extend the “failure to prevent” model not yet been brought into force. overseas laundering the proceeds of (pioneered by the UK Bribery Act) to crime in the UK”, according to the other types of financial crime without Unexplained wealth orders Explanatory Notes to the Act. appropriate public consultation. The Criminal Finances Act provides that an enforcement authority (including the Extension of the powers of Prosecutions and Financial Conduct Authority and the enforcement authorities enforcement actions The Act extends powers already available Serious Fraud Office (SFO) would be able Rolls-Royce to the National Crime Agency (NCA), the to apply to the court for an unexplained The most significant bribery related SFO and the Crown Prosecution Service wealth order (UWO). This would require enforcement action in recent months is (CPS) to the Financial Conduct Authority the respondent to provide a statement the deferred prosecution agreement (FCA) and Her Majesty’s Revenue and setting out the nature and extent of their (DPA) reached between the SFO and Customs (HMRC) to allow proceedings to interest in the property and explaining Rolls-Royce, which was approved by the be taken in the High Court to recover how the respondent obtained the Crown Court on 17 January 2017. criminal property, without the need for the property. There must be reasonable According to the court judgment the owner of the property to be convicted of grounds for suspecting that the known conduct (which took place in Nigeria, a criminal offence. The Act also gives sources of the respondent’s lawful Indonesia, Russia, Thailand, India, China staff at the SFO direct access to the income would be insufficient to obtain the and Malaysia) involved: property, and the respondent must either investigative powers granted to officers of be a politically exposed person (PEP), or other national law enforcement agencies • agreements to make corrupt payments there must be reasonable grounds for in the Proceeds of Crime Act 2002. to agents in connection with the sale of suspecting that the respondent (or a Trent aero engines for civil aircraft in person connected with the respondent) Corporate failure to prevent Indonesia and Thailand between 1989 is, or has been, involved in serious crime, tax evasion and 2006; Following a commitment in April 2016 by either in the UK or elsewhere. For these • concealment or obfuscation of the use the then UK Prime Minister, David purposes, a PEP means a person of intermediaries involved in its defence Cameron, to clamp down on tax evasion, entrusted with a prominent public business in India between 2005 and in the wake of the “Panama Papers” function by an international organisation 2009 when the use of intermediaries furore, the Criminal Finances Act or a state, other than the UK or another was restricted; EEA State, or a family member or close introduces a number of new offences. • an agreement to make a corrupt associate of a PEP. If the respondent fails The first offence is committed where a payment in 2006/2007 to recover a list to comply with the UWO, the property relevant legal entity fails to prevent a of intermediaries that had been taken which is the subject of the UWO (which person associated with it from facilitating by a tax inspector from Rolls-Royce may be in the UK or outside) is presumed the evasion of UK taxes, while the in India; to be recoverable for the purposes of a second offence is committed where an
June 2017 37 ANTI-BRIBERY AND CORRUPTION REVIEW
• an agreement to make corrupt to bribe, contrary to section 1 of the The parent company had implemented a payments to agents in connection with Criminal Law Act 1977, and failure to global compliance programme in late the supply of gas compression prevent bribery, contrary to section 7 of 2011, which had directly led to concerns equipment in Russia between January the Bribery Act 2010, in connection with within the subsidiary about the way in 2008 and December 2009; contracts to supply its products to which some contracts had been obtained. customers in a number of foreign XYZ had immediately instructed lawyers to • failing to prevent bribery by employees jurisdictions. XYZ was not named in the carry out an internal investigation. The law or intermediaries in conducting its proceedings because of ongoing, related firm made an initial self-report on behalf of energy business in Nigeria and legal proceedings. XYZ, and continued to investigate, making Indonesia between the commencement two further self-reports. The SFO, in a of the Bribery Act 2010 and May 2013 Under the terms of the DPA, which is to two‑year investigation, concluded that, and July 2013 respectively, with similar last for at least three years and up to five out of 74 contracts examined, 28 had failures in relation to its civil business in years, the company agreed to pay been procured as a result of bribes. Indonesia; and approximately GBP 6.5 million The judgment found that there was no • failing to prevent the provision by (approximately EUR 7.7 million) to question of the parent company knowingly Rolls‑Royce employees of inducements co-operate with the SFO and to carry out making profit from its subsidiary’s which constituted bribery in its civil an internal compliance review in light of criminality, indeed there was no suggestion business in China and Malaysia the UK Bribery Act and other applicable that the parent company should have between the commencement of the anti-corruption law, and to provide a known about the conduct, or that it had Bribery Act 201 and December 2013. report annually (to be compiled by XYZ’s behaved otherwise than with complete Chief Compliance Officer) to the SFO propriety when it was discovered. Under the terms of the DPA Rolls-Royce addressing all third party intermediary agreed to pay GBP 497,252,645 transactions and the completion and The judge (the Rt Hon Sir Brian Leveson) (approximately EUR 580 million) in effectiveness of its existing anti-bribery in the XYZ case reiterated that “…it is disgorgement of profits plus a financial and corruption controls, policies and important to send a clear message, penalty (plus interest), as well as around procedures. A portion of the penalty was reflecting a policy choice in bringing DPAs GBP 13 million in reimbursement of the to be paid by the UK company’s U.S. into the law of England and Wales, that a SFO’s costs. The DPA is effective for five registered parent company as repayment company’s shareholders, customers and years (which can be reduced to four years) of a significant proportion of the employees (as well as all those with and no protection is offered against the dividends it had received from the UK whom it deals) are far better served by prosecution of any present or former officer, subsidiary over the indictment period. self-reporting and putting in place employee or agent or against Rolls-Royce The SFO agreed not to seek costs in light effective compliance structures. When it for any undisclosed conduct. Rolls-Royce of XYZ’s means and ability to pay. does so, that openness must be must also complete a compliance rewarded and be seen to be worthwhile”. programme following the recommendations According to SFO Director, David Green, of the reviews commissioned by the case “raised the issue about how the HBOS bankers Rolls‑Royce from Lord Gold. interests of justice are served in Six people, including two former bankers circumstances where the company at HBOS, were found guilty on 30 SFO v XYZ Ltd accused of criminality has limited financial January 2017 of bribery and fraud, The UK’s second DPA (after the DPA with means with which to fulfil the terms of a following one of the largest and most Standard Bank9) was approved on 8 July DPA but demonstrates exemplary complex investigations the special fraud 2016 between the SFO and an unnamed co-operation. The decision as to whether division of the CPS had ever prosecuted, UK company, known as XYZ Limited and to force a company into insolvency must according to a press report quoting the described as a UK SME. XYZ was the be balanced with the level and nature of CPS special prosecutor. The case subject of an indictment alleging co-operation and this case provides a involved excessive levels of hospitality, conspiracy to corruption and conspiracy clear example to corporates”. foreign holidays, sex parties and cash in
9 For further details, please visit the UK section of our Anti-Bribery and Corruption Review 2016 (pages 31 et seqq.) at https://www.cliffordchance.com/ briefings/2016/05/anti-bribery_andcorruptionreview-may20160.html.
38 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
envelopes, given to two officers at HBOS million). The four individuals were better intelligence sharing, so we uncover in the bank’s distressed assets division, in sentenced to terms of imprisonment criminality, and better evidence sharing return for requiring small business varying from seven to fifteen years. so the perpetrators can be held to customers to use a particular firm of account whatever role they have had to consultants as a condition of obtaining Enforcement trends play in the cycle of corruption – corporate further credit from HBOS. The With three DPAs now in the bag, the SFO payer, knowing executive, facilitating consultants, however, demanded huge has itself been identifying some middle-man or corrupt decision maker”. fees and in some cases even took over developing trends. In a speech on 7 some of the businesses they were March 2017, Ben Morgan, Joint Head of In a speech in October 2016 on the purporting to help, in order to benefit Bribery and Corruption at the SFO, SFO’s current direction and enforcement themselves. The accused were found highlighted the differences between the priorities, Hannah von Dadelszen, Joint guilty variously of conspiracy to corrupt, three DPAs the SFO has so far agreed, Head of Fraud, said the SFO currently fraudulent trading and conspiracy to but stressed that a DPA was the had around 60 active investigations as conceal criminal property; one of the appropriate resolution in each case, and well as Proceeds of Crime cases, civil “consultants” was sentenced to 15 years said that “the disposal of corporate recovery cases and strategic intelligence in prison while the former head of the criminal risk through resolutions like those projects. The investigations included live impaired assets division was jailed for in Standard Bank, XYZ and Rolls-Royce cases in a wide range of sectors, 11 years and three months. will become increasingly common”. including pharmaceuticals, financial Mr Morgan also spoke of the benchmark services, defence, aerospace, transport, H20 and Total Asset Finance for co-operation with the SFO that was construction, retail, commodities, natural On 7 February 2017, following an necessary to qualify for a DPA, describing resources and professional services. investigation by the SFO, four individuals it as “a high bar”. were found guilty of conspiracy to make While there had been an increase in corrupt payments and conspiracy to On self-reporting, he said there was a self‑reporting, Ms Dadelszen said that commit fraud against two business “steady flow of engagement from cases that were not self-reported still lenders, Barclays Bank and KBC Lease companies… and new cases coming on formed the majority of the SFO’s work. (UK) Limited (KBC), a subsidiary of a to the operational divisions all the time”. Ms Dadelszen, however, indicated that Belgian banking group, in order to obtain Self-reporting would remain an important the SFO would be “less sympathetic to almost GBP 160 million (approximately consideration in the availability of DPAs. those businesses who sit back and wait EUR 190 million). The case involved a While, in the case of Rolls-Royce, the for us to come knocking” and said that number of long-term broadband SFO had first heard of the conduct from “the DPA process is not there for a contracts that H20 Networks (which an anonymous blog in China, and not company who leaves it to us to find supplied fibre-optic internet cable from Rolls-Royce, the information had them.” This attitude was also reflected in connections, particularly to public been of a very limited nature and Mr Morgan’s speech, who stressed that institutions) had entered into with councils Rolls‑Royce had ultimately reported on “it is only right that those who do not and universities. The contracts were sold conduct that ranged far beyond that. cooperate receive the most punitive on to a company called Total Asset sanction available … if they are convicted Finance (TAF). Individuals at TAF Mr Morgan also said that the SFO was after trial”. conspired to obtain loans from Barclays “becoming more sophisticated in our and KBC on the basis of falsely inflated understanding of how particular BACK TO MAP or entirely false contracts. An ‘inside man’ industries work, cultivating intelligence, at KBC approved funding by KBC to TAF joining the dots”, and referred to the (where two of those convicted worked), “irresistible, double-edged trend of closer in return for payments of almost GBP and better international cooperation when 900,000 (approximately EUR 1.05 it comes to enforcement [meaning] …
June 2017 39 THE AMERICAS ANTI-BRIBERY AND CORRUPTION REVIEW
BRAZIL
Changes to legislation stage of Operação Recebedor, which, third Brazilian nuclear powerplant, Brazil’s main anti-bribery legislation is in turn, is investigating cartels, and from Eletronuclear. bid‑rigging, corruption, money- Law No. 12,846/2013, referred to as the • Operação Greenfield – laundering and other crimes involving Lei Anticorrupção (the Brazilian September 2016. This operation is transportation infrastructure projects. Anti‑Corruption Law), and various being conducted by the Brazilian associated regulations and rules made • Operação Recomeço – June 2016. Federal Police and is investigating the since 2013. There have been no new An operation conducted by the embezzlement of approximately USD laws or substantive changes to the Brazilian Federal Police and the Public 2.5 billion from pension funds, public 10 Brazilian Anti-Corruption Law since our Prosecutor’s Office that is investigating banks and state owned companies. last Anti-Bribery and Corruption Review the alleged embezzlement of Also involved in the investigation are in May 2016. approximately USD 35 million from the Previc (Superintendência Nacional Petrobras and Correios pension funds. de Previdência Complementar) and Prosecutions and CVM (Comissão de Valores Mobiliários • Operação Pripyat – July 2016. – the Brazilian Securities and Exchange enforcement actions An operation conducted by the Commission). Authorities believe that There has been a significant number of Brazilian Federal Police and the partners of one of the biggest company investigations and prosecutions involving Public Prosecutor’s Office that derived conglomerates under investigation corruption in the past year; some of from Operação Lava Jato and is have entered into an agreement these stemmed from the well-known investigating embezzlement, involving a payment of USD 60 million Operação Lava Jato (Car Wash corruption, money-laundering and to a competitor businessman in order Investigation), which started in March criminal collusion at Eletrobras and to conceal bribery and to persuade him 2015 and reached its 37th stage as of Eletronuclear, major Brazilian not to disclose material information to April 2017, while others involved other electricity companies. instances of corruption in the country.11 the authorities. • Operação Abismo – July 2016. • Operação Calicute – November 2016. An operation aimed at investigating These have included: The main target of this operation is the criminal organisations, bid-rigging, ex-governor of Rio de Janeiro Sergio • Operação Mar de Lama – April 2016. cartels, corruption, money-laundering Cabral. It is investigating corruption, A task force created by the Brazilian and bribery through contracts with money-laundering, and criminal Federal Police, GAECO (Group of Petrobras and a research centre. associations involving infrastructure Special Action against Organized According to the investigations, there projects in Rio de Janeiro, such as the Crime), and the Public Prosecutor’s was a USD 10 million bribe to induce a remodelling of the Maracana Stadium Office to investigate a criminal competitor to withdraw from a tender for the 2014 World Cup. Investigations organisation of public agents that exercise and payments to a political showed that from August 2014 allegedly embezzled USD 350 million party and to Petrobras’ officers. from the city of Governador Valadares, through July 2015, more than USD State of Minas Gerais. • Operação Irmandade – August 2016. 100 million in gold, money and An operation conducted by the diamonds were the subject of • Operação Tabela Periódica – Brazilian Federal Police and the Public transactions in Brazil and abroad. June 2016. An operation conducted by Prosecutor’s Office that was • Operação Eficiência – January 2017. the Brazilian Federal Police to commenced following discoveries As a consequence of Operação investigate fraud in major infrastructure made in Operação Pripyat and is Calicute, the Brazilian Federal Police project bids. This operation derived investigating bribery and started the Operação Eficiência, which from Operação Lava Jato and is a new embezzlement of funds from Angra 3, is investigating the concealment of a
10 We note that Medida Provisória 703 (Provisional Measure) from 2015, partially altered Law No. 12,846/2013 temporarily but was revoked on 29 May 2016. 11 For example, an investigation conducted by Transparency International found that in São Paulo 3,452 properties worth at least USD 2.7 billion are linked to offshore secret companies, raising red flags about the use of real estate for money laundering in Brazil’s largest city.
June 2017 41 ANTI-BRIBERY AND CORRUPTION REVIEW
payment of USD 100 million and The operation involves public agents determine that 108 people must be bribery. The ex-governor of Rio de accused of allowing the scheme, and investigated, including 24 Senators, Janeiro was targeted, as well as a more than thirty food companies 39 Federal Deputies, the President of the Brazilian businessman accused of accused of selling rotten meat, Congress and of the Senate, a Minister of bribery in order to win contracts with changing the valid expiry date and of the Federal Court of Auditors and eight the state of Rio de Janeiro. using harmful products. Ministers of President Michel Temer. The most common crimes described in the • Operação Leviatã – February 2017. bargains were corruption, money- This operation, which derived from Enforcement trends laundering, fraudulent misrepresentation, Operação Lava Jato and is being Plea bargains were introduced into collusion, and bid-rigging. conducted by the Brazilian Federal Brazilian legislation through Law No. Police, is investigating corruption, 12,850/2013. Since then, approximately Brazilian President Temer was also money laundering, criminal fifty plea bargains have been made and mentioned in the plea bargains, but the organisations and bribes to political six have been approved and accepted by Public Prosecutor’s Office did not include parties worth 1% or more of the the Brazilian Supreme Court. him in the investigations because he is contract value of projects in the Belo entitled to a temporary immunity due to Monte hydroelectric plant from the The most famous of these, and one his current position as President of Brazil, companies in the consortium which attracted the attention of the which means he cannot be investigated responsible for construction of worldwide media in April 2017, was the for crimes that are not a consequence of said plant. plea bargain relating to the Odebrecht Group, which involved 78 officers and his mandated activities. • Operação Carne Fraca – March 2017. ex-officers of the engineering and The Brazilian Federal Police are construction global business. BACK TO MAP investigating major multinational companies accused of altering meat Supreme Court Justice Edson Fachin sold for domestic use and for exports. used this plea bargain as grounds to
42 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
UNITED STATES OF AMERICA
Changes to legislation or retaining business, and (ii) assisted bribery scheme.13 The DOJ previously Repeal of oil and gas the defendant in obtaining or retaining entered a deferred prosecution agreement transparency requirements such business. Congressman Perlmutter (DPA), including a USD 17.1 million fine, 14 On 14 February President Trump signed a has introduced similar legislation on with Louis Berger in July 2015. Both joint resolution of Congress repealing the several occasions over the past nine actions stemmed from an alleged scheme Cardin-Lugar regulations, which were due years – none of which have been to bribe Indonesian and Vietnamese to come into effect in 2018. These adopted – based on the rationale that government officials to secure contracts regulations (made under the Cardin-Lugar FCPA violations could lead to U.S. for the company between 2000 and 2010. amendment of 2010) would have required companies losing business. Mr. Hirsch ran Louis Berger’s Asia office at U.S.-listed oil, gas and mineral companies the time. District Court Judge Mary to file an annual report with the Securities Prosecutions and Cooper stated that the sentence took into and Exchange Commission containing enforcement actions account Mr. Hirsch’s cooperation, which fraud section prosecutor John Borchert details of payments to governments 2016 was a record-breaking year for described as “an absolute game- relating to extractive projects. FCPA enforcement with 27 enforcement changer.”15 Mr. Borchert contrasted Louis actions and USD 2.48 billion in Berger’s lack of cooperation with Proposed private right of action for settlements collectively for the DOJ and Mr. Hirsch’s role as a key cooperator in FCPA violations the SEC. This compares to 11 the investigation from the outset. In March 2017, Congressman Ed enforcement actions and USD 133 million Mr. Hirsch’s actions included explaining Perlmutter introduced proposed in settlements in 2015. Included among how particular transactions were bribes, legislation (Foreign Business Bribery the 2016 resolutions were four of the how corrupt payments were made, and Prohibition Act (H.R. 1549)) that would largest FCPA resolutions in FCPA history. which foreign officials received them. amend the Foreign Corrupt Practices Notable cases are grouped below under In the wake of the Yates Memo and the Act (FCPA) to include a private right of headings indicating enforcement trends. action for individuals and companies to FCPA Pilot Program, the case highlighted the DOJ’s focus on individual liability while sue persons for violations of the FCPA’s Individual liability, self-disclosure, 12 also providing an example of how anti‑bribery provisions. While current and voluntary cooperation in the era cooperation by individual employees may legislation only allows for enforcement of of the Yates Memo and the FCPA impact enforcement actions against the FCPA by the Department of Justice Pilot Program their employers. (DOJ) and the Securities and Exchange With the advent of the Yates Memo and Commission (SEC), Congressman the FCPA Pilot Program, several recent In December 2016, General Cable Perlmutter stated that the new legislation enforcement actions showed how these Corporation (General Cable) entered into was introduced in response to different norms might interact. uncertainty over whether the FCPA will a non-prosecution agreement (NPA) and agreed to pay a USD 20.4 million penalty remain an enforcement priority for the In July 2016, Richard Hirsch, a former with the DOJ, and a USD 55.3 million Trump administration. Under the Senior Vice President of construction disgorgement settlement with the SEC, in proposed Bill, a plaintiff would be management company Louis Berger connection with improper payments required to prove an FCPA anti-bribery International, Inc. (Louis Berger), was made to government officials in Africa violation by the defendant that: sentenced to two years probation and a and Asia through subsidiaries and third (i) prevented the plaintiff from obtaining USD 10,000 fine for his part in a foreign
12 Perlmutter Introduces Legislation to Help Stop Corruption and Foreign Bribery under the Trump Administration, 16 March 2017, please see http://perlmutter.house. gov/news/documentsingle.aspx?DocumentID=1652; Foreign Business Bribery Prohibition Act of 2017, H.R. 1549, 115th Cong. (2017). 13 Louis Berger International Resolves Foreign Bribery Charges, Department of Justice, 17 July 2016, please see https://www.justice.gov/opa/pr/louis-berger- international-resolves-foreign-bribery-charges. 14 Deferred Prosecution Agreement, United States v. Louis Berger Int’l, Inc. (D. N.J., 7 July 7, 2015), please see https://www.justice.gov/opa/file/631346/download. 15 Hamilton-Martin, Roger, Former Louis Berger exec avoids prison after “game-changing” FCPA cooperation, Global Investigations Review, please see http://globalinvestigationsreview.com/article/1038186/former-louis-berger-exec-avoids-prison-after-%E2%80%9Cgame-changing%E2%80%9D-fcpa-cooperation.
June 2017 43 ANTI-BRIBERY AND CORRUPTION REVIEW
parties.16 While the payments involved a following a sweep of the financial services notable global settlements. For example high level executive, and General Cable industry. For example, in December in December 2016, a Brazilian did not provide adequate “guidance or 2016, U.S. enforcement authorities conglomerate pleaded guilty and agreed training . . . to ensure compliance with concluded the first FCPA case against a to pay USD 3.5 billion in a global the FCPA,” the DOJ lauded the hedge fund.17 In this case, the hedge settlement with Brazil, the United States company’s voluntary self-disclosure and fund entered into a USD 412 million and Switzerland, stemming from a level of cooperation and remediation, and combined settlement with the DOJ and multi‑continent scheme to pay millions in emphasized that the USD 20 million the SEC for FCPA violations in several bribes to foreign officials to retain and penalty was a 50 percent reduction off African countries. The settlement obtain business.19 (This global settlement the bottom of the guidelines—as included a three-year DPA with the DOJ. amount was ultimately reduced to provided for under the Pilot Program. USD 2.6 billion following an independent The settlement documents highlighted In November 2016, a major U.S. bank “inability to pay” analysis conducted by the significant cooperation and agreed to pay USD 264 million combined DOJ to determine how much the remediation steps taken by General to the DOJ, the SEC, and the Federal company would be able to pay.) Cable, which included “conducting a Reserve to resolve FCPA allegations The following month, a UK engineering thorough internal investigation; making related to awarding jobs to relatives and company agreed to pay USD 800 million regular factual presentations and friends of Chinese government officials in in a global settlement with authorities proactively providing updates to the exchange for banking deals.18 As part of from the United States, United Kingdom Fraud Section; voluntarily making the resolution, the bank signed a NPA and Brazil.20 The company admitted that foreign‑based employees available for with the DOJ and disgorged profits as it paid bribes through third parties to interviews in the United States” and ordered by the SEC. The case foreign officials in exchange for taking action against implicated emphasized the need for companies to government contracts, with conduct employees, third-party agents, and implement robust hiring policies and occurring in Brazil, Thailand, Kazakhstan, distributors. The terms of the settlement enforce internal controls, especially when Azerbaijan, Angola, and Iraq. highlighted the importance of internal dealing with the hiring of family members controls and due diligence with regard to and friends of foreign government Both individually and combined, the size third-party agents as well as U.S. officials. These cases also indicate that and scope of these settlements showed authorities’ continuing emphasis on the additional FCPA enforcement actions the ever increasing levels of cooperation importance of voluntary self-disclosure within the financial services industry are between law enforcement authorities and cooperation in assessing likely in the near future. across the globe. The DOJ press releases FCPA‑related penalties. have cited significant cooperation and The new normal of cross-border assistance from enforcement authorities Focus on the financial industry cooperation and coordinated across the global including the Whereas until recently, financial global settlements United Kingdom, Brazil, Austria, Cyprus, institutions have largely escaped FCPA As previously mentioned, US authorities Germany, the Netherlands, Saudi Arabia, scrutiny, this past year saw several are increasing their cooperation with Singapore, Switzerland, and Turkey, notable enforcement actions against other enforcement authorities across the among others. As former Assistant companies in the financial industry globe, which can be seen in some Attorney General Leslie Caldwell
16 General Cable Corporation Agrees to Pay $20 Million Penalty for Foreign Bribery Schemes in Asia and Africa, Department of Justice, 29 December 2016, please see https://www.justice.gov/opa/pr/general-cable-corporation-agrees-pay-20-million-penalty-foreign-bribery-schemes-asia-and. 17 Och-Ziff Capital Management Admits to Role in Africa Bribery Conspiracies and Agrees to Pay $213 Million Criminal Fine, Department of Justice, 29 September, 2016, please see https://www.justice.gov/opa/pr/och-ziff-capital-management-admits-role-africa-bribery-conspiracies-and-agrees-pay-213; See SEC Press Release 2016- 203, Och-Ziff Hedge Fund Settles FCPA Charge, please see https://www.sec.gov/news/pressrelease/2016-203.html. 18 JPMorgan’s Investment Bank in Hong Kong Agrees to Pay $72 Million Penalty for Corrupt Hiring Scheme in China, Department of Justice, 17 November 2016, please see https://www.justice.gov/opa/pr/jpmorgan-s-investment-bank-hong-kong-agrees-pay-72-million-penalty-corrupt-hiring-scheme. 19 Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in History, Department of Justice, 21 December 2016, please see https://www.justice.gov/opa/pr/odebrecht-and-braskem-plead-guilty-and-agree-pay-least-35-billion-global-penalties-resolve. 20 Rolls-Royce plc Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act Case, Department of Justice, 17 January 2017, please see https://www.justice.gov/opa/pr/rolls-royce-plc-agrees-pay-170-million-criminal-penalty-resolve-foreign-corrupt-practices-act.
44 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
emphasized in a November 2016 speech, made statements that stressed the compliance and remediation measures.” the DOJ has “strengthened [its] improved enforcement outcomes that In February 2017, the DOJ released an coordination with foreign counterparts – were available for companies who made Evaluation of Corporate Compliance sharing leads, making available essential voluntary disclosures and fully Programs guide (the Guidance) that lists documents and witnesses, and more cooperated with U.S. authorities. sample topics and common questions generally working together to reduce For example Ms. Yates stated that the that the DOJ has “frequently found criminals’ abilities to hide behind DOJ wanted to make it clear for relevant in evaluating a corporate international borders,” such that companies that there was a material compliance program.”24 However, while companies should expect significant difference in resolutions between the Guidance provides additional cooperation between enforcement companies who voluntarily disclosure information on how the DOJ evaluates authorities across the globe.21 their conduct versus those who do not.22 compliance programs, it does not provide a benchmark for compliance programs or Enforcement trends Other developments note satisfactory answers to the listed U.S. enforcement actions against FCPA Pilot Program extended questions in the event of a violation. companies and individuals for violations Launched in April 2016, the Pilot of the FCPA show no sign of relenting, Program was aimed at motivating The FCPA under the Trump with increasing levels of cooperation companies to voluntarily self-disclose Administration between U.S. government authorities and FCPA-related misconduct and increase As with every change in control over the foreign enforcement authorities. cooperation. The DOJ issued its first White House, questions swirl about the While inter-governmental cooperation is declination letters under the Pilot enforcement priorities of the new practically certain amongst members of Program in June 2016, when declining administration. President Trump remains the Organisation for Economic to prosecute two companies in light of unpredictable, and as a result, his new Co-operation and Development, the DOJ their prompt voluntary self-disclosure, administration has raised questions and SEC have also deepened links to efficacy of internal controls, and high regarding the likely approach it may take non-OECD jurisdictions. For example, levels of cooperation and remediation.23 on FCPA enforcement. recent U.S. enforcement actions have To date, the DOJ has issued five involved cooperation with Brazil, Saudi declination letters under the Pilot In the past, President Trump has publicly Arabia, and Cyprus. Program. The Pilot Program was initially voiced his lack of support for the FCPA, slated to operate for a one year period, suggesting in 2012 that FCPA enforcement U.S. authorities have continued to but will continue to run past April 2017 has become “absolutely crazy,” that the emphasize the importance of voluntary as the DOJ evaluates and modifies the FCPA is a “horrible law” that “should be disclosures in their public statements. program as it deems necessary. changed,” and that it puts U.S. companies 25 For example throughout a recent 2016 at a “huge disadvantage.” conference focused on the FCPA, Daniel Corporate compliance Kahn (Chief of DOJ’s FCPA Unit), Kara As mentioned in our 2016 Review, the In 2011, Jay Clayton, President Trump’s Brockmeyer (former Chief of the SEC’s DOJ’s appointment of Hui Chen as nominee to head the SEC, helped pen a FCPA Unit), Andrew Ceresney (the SEC’s Compliance Counsel Expert was expected white paper that argued that U.S. former Head of Enforcement), and former to help prosecutors develop “appropriate companies should be subjected to fewer 26 Deputy Attorney General Sally Yates, all benchmarks for evaluating corporate restrictions with respect to the FCPA.
21 Assistant Attorney General Leslie R. Caldwell Delivers Remarks Highlighting Foreign Corrupt Practices Act Enforcement at The George Washington University Law School, Department of Justice, 3 November 2016, please see https://www.justice.gov/opa/speech/assistant-attorney-general-leslie-r-caldwell-delivers-remarks- highlighting-foreign. 22 Deputy Attorney General Sally Q. Yates Delivers Remarks at the 33rd Annual International Conference on Foreign Corrupt Practices Act, Department of Justice, 30 November 2016, please see https://www.justice.gov/opa/speech/deputy-attorney-general-sally-q-yates-delivers-remarks-33rd-annual-international 23 Letter from Department of Justice to K&L Gates, 3 June 2016, please see https://www.justice.gov/criminal-fraud/file/865406/download; Letter from Department of Justice to Ropes & Gray, June 6, 2016, available at https://www.justice.gov/criminal-fraud/file/865411/download. 24 Evaluation of Corporate Compliance Programs, Department of Justice, 8 February 2017, please see https://www.justice.gov/criminal-fraud/page/file/937501/download. 25 Trump: Dimon’s Woes & Zuckerberg’s Prenuptial (CNBC television broadcast 15 May 15 2012).
June 2017 45 ANTI-BRIBERY AND CORRUPTION REVIEW
The paper concluded that “the continued (USD 2.48 billion). Moreover, as part of The most likely course is that the DOJ unilateral and zealous enforcement of the his confirmation process, President and the SEC will continue to pursue FCPA by the United States may not be Trump’s Attorney General Jeff Sessions FCPA enforcement actions against the most effective means to combat stated that “if confirmed as attorney companies and individuals, perhaps with corruption globally – in fact, in some general, I will enforce all federal laws, some roll-back of the SEC’s “broken circumstances it may exacerbate the including the Foreign Corrupt Practices windows” approach of targeting even the problem of overseas corruption.” Act and the International Anti-Bribery Act smallest violations of securities laws. of 1998, as appropriate based on the Even if U.S. authorities take a step back Some commentators have interpreted facts and circumstances of each case.28” in FCPA enforcement, foreign jurisdictions these statements as indicators that there Finally, during Mr. Clayton’s confirmation are increasingly adopting and enhancing may be a decrease in FCPA enforcement hearing, he stated that there is “zero their own anti-corruption laws. As a under the Trump administration. room for bad actors in our capital result, the best positioned companies will However, a significant shift in policy or markets” and that “companies subject to be those that continue to implement and even a repeal of the statute seems the FCPA looking to do business in enforce their anti‑corruption policies and unlikely. Outgoing and current DOJ and countries known for corruption should procedures and, where necessary, to root SEC officials have stated that they think long and hard about the potential out improper conduct from within expect FCPA enforcement to continue to exposure to not ... just the Foreign their business. be a priority.27 As mentioned above, Corrupt Practices Act but...thankfully 2016 was a record year in FCPA now...similar oversight and enforcement BACK TO MAP enforcement, in terms of both number of from other OECD countries.”29 enforcement actions (27 companies) and the overall amounts paid to resolve them
26 The FCPA and its Impact on International Business Transactions— Should anything be done to minimize the consequences of the U.S.’s unique position on combating offshore corruption?, N.Y. CITY BAR, December 2011, please see http://www2.nycbar.org/pdf/report/uploads/FCPAImpactonInternationalBusinessTransactions.pdf. 27 Deputy Attorney General Sally Q. Yates Delivers Remarks at the 33rd Annual International Conference on Foreign Corrupt Practices Act, Department of Justice, 30 November 2016, please see https://www.justice.gov/opa/speech/deputy-attorney-general-sally-q-yates-delivers-remarks-33rd-annual-international (“In 51 days, a new team will be running the department, and it will be up to them to decide whether they want to continue the policies that we’ve implemented in recent years. But I’m optimistic. Holding individuals accountable for corporate wrongdoing isn’t ideological; it’s good law enforcement.”); Remarks by DAAG Trevor McFadden at GIR Live DC, 16 February 2017, please see http://globalinvestigationsreview.com/article/1081452/remarks-by-daag-trevor-mcfadden-at-gir-live-dc (“The fight against official corruption is a solemn duty of the Justice Department, each generation of Department leaders and line prosecutors takes up this mantel from their predecessors, regardless of party affiliation.”). 28 Nomination of Jeff Sessions to be Attorney General of the United States, Questions for the Record, Questions From Senator Whitehouse, S. Comm. On the Judiciary, 115 Cong. (2017) please see https://www.judiciary.senate.gov/imo/media/doc/Sessions%20Responses%20to%20Whitehouse%20QFRs.pdf. 29 Nomination Hearing of Jay Clayton to be a Member of the Securities and Exchange Commission, S. Comm. On Banking, Housing, and Urban Affairs, 115 Cong. (2017) please see https://www.banking.senate.gov/public/index.cfm/2017/3/nomination-hearing.
46 June 2017 ASIA PACIFIC ANTI-BRIBERY AND CORRUPTION REVIEW
AUSTRALIA
Changes to legislation and overseas), unless the company whistleblower protections in the The Australian government released a can demonstrate a proper system of corporate, public and not for profit public consultation paper on 4 April 2017 internal controls and compliance were sectors is in progress. The Committee’s which proposes amendments to the in place; report is due by 30 June 2017 and is expected to lead to a legislative foreign bribery offence (section 70.2 of • removing the requirement that a foreign enhancement of protections available the Criminal Code Act 1995 (Cth)), which official be influenced “in their official to whistleblowers. would align Australia’s foreign bribery capacity” only; and regime more closely with the equivalent U.S. and UK regimes. • clarifying that the business or Prosecutions and advantage can be obtained for enforcement actions someone else and that the business or In its current form, it is an offence under As we noted in our 2016 review, the advantage does not need to be a Australian law for a person to provide Australian Federal Police (AFP) has been specific business or advantage. (including causing, offering or promising investigating Leighton Holdings Limited to provide) a benefit to another where the (now called Cimic (Construction, One notable absence from the proposals benefit is not legitimately due and that Infrastructure, Mining and Concessions) is any amendment to the facilitation person does so with the intention of (Leighton) in relation to foreign bribery payment defence which is one of the influencing a foreign public official in the allegations since 2011. In January 2017, more controversial aspects of Australia’s exercise of their duties in order to obtain two former Leighton employees were anti-bribery regime. The public or retain a business advantage. charged with offences relating to the consultation paper expressly refutes any falsification of company documents. need for an amendment to the facilitation The amendments under consideration by Interestingly, the charges were a result of payment defence, noting that the defence the Australian government include: the investigation by the Australian has not presented as an issue in the Securities & Investments Commission • extending the definition of “foreign enforcement of the foreign bribery offence. public official” to include candidates for (ASIC), Australia’s corporate regulator, rather than the AFP, and are offences public office; In addition to the proposed under the Corporations Act 2001 (Cth) amendments to the foreign bribery • replacing the concept of “not (Corporations Act) rather than the offence, the Australian government is legitimately due” with one of three anti‑bribery regime. The ASIC currently considering various other alternative concepts: “improperly investigation has been underway since measures which are likely to strengthen influence”, “dishonesty” or “improper”; 2013 in parallel with the AFP Australia’s anti-bribery and corruption investigation. The hearings have been set • extending the offence to cover bribery regime including: to obtain a personal advantage, not down for late November 2017. just a business advantage; • introducing deferred prosecution agreements (DPA): a public consultation In November 2016, the former chairman • creating a separate foreign bribery paper was released on 31 March 2017 and a director of AWB Limited (AWB) offence based on recklessness (as outlining a proposed model for a DPA was found to have breached his duties opposed to the current offence which scheme in relation to serious corporate as a director under the Corporations Act requires intent); crimes, including foreign bribery. The for failing to make adequate enquiries • creating a new corporate offence of model under consideration draws on into conduct by AWB that contravened failing to prevent foreign bribery, which aspects of both the UK and U.S. DPA United Nations sanctions against Iraq would make a company automatically schemes; and (known as the “oil for wheat” scandal). The director was fined AUD 50,000 and liable for bribery by employees, • reforming whistleblower laws: a banned from managing a corporation for contractors and agents (in Australia Parliamentary Committee inquiry into
48 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
five years. Similar to the actions against and a further four matters under governing the activities of Australian the former Leighton employees referred consideration for prosecution. corporations and individuals and the to above, the proceeding was brought by extent to which Australia is meeting its ASIC under the Corporations Act. Senate inquiry obligations under the OECD Convention. Proceedings against another executive of In our 2016 review, we noted that the AWB were dismissed and are currently ongoing Senate Committee inquiry into BACK TO MAP the subject of an appeal by ASIC. foreign bribery was expected to release its report on 1 July 2016. That report is Enforcement trends now scheduled to be released on As at April 2017, the AFP had 35 30 June 2017. The Senate Committee ongoing foreign bribery matters, inquiry is focused on, amongst other including two active prosecutions things, the anti-bribery measures
June 2017 49 ANTI-BRIBERY AND CORRUPTION REVIEW
HONG KONG
Changes to legislation Kwok to help ensure that the government In passing the sentence, Mr Justice Although a number of defects in maintained a “favourable disposition” Andrew Chan said the seriousness of the Hong Kong’s main anti-bribery statute, towards SHKP. The Court of Appeal misconduct in public office offence lay in the Prevention of Bribery Ordinance dismissed an appeal against the the office which the defendant occupied. (POBO), have been identified in recent convictions in February 2016, in which case law (see below) there have been no the appellants argued that prosecutors The nine jurors cleared Tsang of a second significant changes to legislation, or new had not been able to point to any specific count of misconduct in public office of legislative proposals, in relation to bribery act that Hui had done to favour SHKP. failing to disclose his connection with the and corruption since our last Anti-Bribery interior designer of the apartment when and Corruption Review in May 2016. If the appeals, which commenced on proposing him for an honour under the 9 May 2017, are successful, Kwok will be city’s public honours system. Prosecutions and freed although Hui will remain in prison as he was also found guilty of four other Tsang faces a 25-day retrial starting on enforcement actions charges that the CFA did not give him 26 September over a separate bribery Kwok and Hui appeal to city’s permission to challenge. charge on which the jury failed to reach a top court verdict. Tsang is accused of accepting an Hong Kong’s Court of Final Appeal (CFA) Tsang convicted of misconduct in advantage as Chief Executive over his has heard the appeals of former Sun public office alleged receipt of HKD 3.35 million Hung Kai Properties (SHKP) co-chairman Former Chief Executive Donald Tsang has (approximately USD 430,000) worth of Thomas Kwok and the former Chief been convicted of one count of renovations on the apartment as a reward Secretary Rafael Hui against their misconduct in public office during his for considering and making decisions in convictions for corruption. Kwok and Hui, time in office between 2010 and 2012. relation to the broadcast applications. who were jailed in December 2014 for Tsang was found guilty of deliberately five and seven and a half years concealing his private negotiations with a Tsang has often been criticised for his respectively for bribery offences, lost their property tycoon to rent a luxury behaviour while in office. He admitted initial appeals against conviction in apartment in Shenzhen, while at the using yachts and jets for private trips February 2016. same time approving a digital radio even though he later said he had paid broadcast licence application submitted commercial rates for their hire. The CFA had granted the pair leave to by a company in which the tycoon, Bill appeal to determine “whether in the case Wong Cho-bau, was a major shareholder. Tsang survived a no-confidence vote of a public officer, being or remaining Tsang is appealing against the conviction towards the end of his term in office in favourably disposed to another person on and sentence. 2012, the first since the resumption of account of pre-office payments, is sovereignty in 1997. sufficient to constitute the conduct Tsang was sentenced in February to element of the offence of misconduct in 20 months’ imprisonment. On 24 April, Tsang was arrested on 5 October 2015 public office?”. a court granted his bail application. following a long investigation by the Tsang is the highest-ranking official ever Independent Commission Against Central to the issue is the validity of the to be convicted of a criminal offence and Corruption (ICAC). Critics queried the so-called ‘sweetener’ doctrine, which imprisoned in Hong Kong. Tsang had length of time it had taken to arrest him. says it is not necessary for prosecutors to been serving his sentence in the island’s prove a specific quid pro quo to establish Stanley Prison until he was transferred to Tsang’s arrest highlighted what a former misconduct in public office offences. hospital shortly before the bail hearing judge has described as a “fundamental complaining of breathing problems. defect” in the city’s main anti-corruption Prosecutors had successfully argued that Tsang will remain on bail until his appeal legislation. POBO contains clear rules Hui received HKD 8.5 million is heard. against gifts but they do not apply to the (approximately USD 1.1 million) from
50 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
Chief Executive. Under section 3 of the grounds to believe, that funds are Enforcement trends POBO, soliciting and accepting an tainted, the defendant can claim The Chairman of the Advisory Committee advantage without the permission of immunity under section 25A OSCO by on Corruption (ACOC) said in January the Chief Executive is a crime, but the disclosing his suspicion to an authorised 2017 that the corruption situation in giver of the permission is not covered officer with legal powers to investigate Hong Kong remained stable and was well by the wording. the source of funds. “under control”. Chow Chung-kong cited the ICAC’s 2016 annual survey, in which The Chief Executive is also exempt from Court of Final Appeal quashes only 1.2% of respondents had come section 8, which states that anyone who television star’s bribery conviction across corruption in the past 12 months. offers an advantage to a “prescribed In March 2017, the CFA found the officer” while having dealings with the television presenter Stephen Chan The ICAC received 2,891 corruption government is committing an offence. and his assistant Tseng Pei-kun complaints in 2016, a slight rise of 3% innocent of bribery charges brought compared to 2,803 complaints The situation is further complicated by by the Department of Justice under received the previous year. 63% of the fact that the ICAC reports directly to section 9 POBO. these concerned the private sector, the Chief Executive. Despite repeated while government departments and attempts to rectify the situation, the The CFA unanimously reversed the Court public bodies accounted for 29% and government has still to commit to a of Appeal’s decision, with the majority 8% respectively. timetable to address the issue. ruling that Chan, the general manager of TVB, was not acting “in relation to his Mr Chow noted that complaints related to Court of Final Appeal rejects principal’s affairs or business” when he building management still took up a large “thought crime” defence in money appeared for a special edition of the percentage of graft reports in the private laundering appeal “Be My Guest” TVB show at Olympian sector. He cited the conviction and jailing In a judgment dealing with the conviction City alongside the main New Year’s Eve in 2016 of an engineering company of the former Birmingham City Football countdown show in 2009 and was paid proprietor who offered HKD 45 million Club chairman Carson Yeung, the CFA HKD 112,000 (approximately USD (USD 5.8 million) in bribes to secure reaffirmed that, on a charge of dealing 14,300) for his appearance by Tseng. renovation contracts as a sign of judicial with proceeds of crime contrary to determination to root out corruption and section 25(1) Organised and Serious Whilst TVB did not give express consent heightened public awareness towards Crimes Ordinance (OSCO), prosecutors to Chan’s participation, they televised the malpractice in the sector. have no need to prove that property show and so must have known about it. handled by a defendant is the proceeds The CFA held that the appearance was In December 2016, Hong Kong was of crime, only that the defendant had not intended to injure the bond of trust ranked fourth amongst 199 countries and reasonable grounds to believe it was. and loyalty between the principal and territories with the least corruption risk in agent. In the words of Ribeiro PJ, “it is the 2016 TRACE Matrix survey published Carson Yeung appealed against his not the legislative intent to stigmatize as by TRACE International in collaboration conviction on five counts of dealing with criminal, conduct of an agent which is with RAND Corporation. Countries and property believed to be proceeds of an beneficial to and congruent with the territories landing the top three spots indictable offence for having laundered interests of the principal (as in the were Sweden (first), New Zealand HKD 721 million Hong Kong. Yeung was present case).” (second) and Estonia (third). sentenced to six years in jail. For an offence to be committed there BACK TO MAP Yeung argued in his defence that would need to be conduct adverse to the accepting the prosecution case meant a principal’s interests, which was not the defendant could be convicted for case. On the contrary, the appearance “thought crime”. The CFA rejected the made the main New Year’s Eve show assertion, observing that if a defendant even more popular with viewers. does not know, but has reasonable
June 2017 51 ANTI-BRIBERY AND CORRUPTION REVIEW
INDONESIA
Changes to legislation has taken an uncompromising approach In March 2017, following an extensive The main government agency that to tackling corruption. To date, it has investigation into the high-profile enforces Indonesian Anti-Corruption Law prosecuted and convicted government procurement of the electronic Identity is the Corruption Eradication Commission ministers, business tycoons, judiciary Card (e-KTP) project, the KPK questioned (Komisi Pemberantasan Tindak Pidana and senior political “fixers” in a number around 200 witnesses, including several Korupsi, commonly known as the KPK), of high profile cases. Recently it has lawmakers, regarding the IDR 5.9 trillion which was established under the 2002 expanded its efforts to cross-border (USD 443 million) project, which resulted Corruption Eradication Commission Law corruption, cooperating more closely in IDR 2.3 trillion in alleged state losses (the KPK Law). The KPK coordinates with with overseas law enforcement agencies, (USD 195 million). The KPK has named other agencies in the eradication of including the UK’s Serious Fraud Office three suspects in the case so far, bribery and corruption, conducts (SFO), and the Corrupt Practices including two former Home Ministry investigations, prosecutes bribery Investigation Bureau (CPIB) of Singapore. officials and a businessman. offences, undertakes action to prevent bribery, and monitors governance. In early 2017, following “intensive” Enforcement trends cooperation with the SFO and CPIB in President Joko Widodo continues to lead To carry out its enforcement duties, the respect of bribery and corruption the fight against widespread corruption in KPK has extensive powers to undertake allegations against Rolls-Royce Holdings Indonesia. He has introduced several specific measures, including powers to Plc (Rolls-Royce) in a number of important measures, including moving use wire-tapping, to instruct relevant countries, including Indonesia, the KPK many government services online (with institutions to impose travel bans and to named a former chief executive officer of the aim of reducing opportunities for order banks or other financial institutions a state-owned airline as a suspect in a corrupt bureaucrats to demand bribes), to block accounts potentially holding the bribery case pertaining to the improving information disclosure and proceeds of corruption. procurement of aircraft and engines from transparency, promoting coordination with Rolls-Royce and Airbus. The KPK has cross-border agencies on information The KPK Law was intended to be accused the former chief executive sharing and anti-bribery enforcement and amended in 2016, with the government officer of accepting monetary bribes of passing new regulations to make it easier having designated the Bill as a priority Bill EUR 1.2 million and USD 180,000, and to prosecute companies. for 2016. However, the Indonesian assets worth USD 2 million. President, Joko Widodo, has postponed Historically, corporate entities in discussions on the amendment of the Recently, a Constitutional Court Judge Indonesia have rarely faced criminal KPK Law indefinitely in response to was caught “red-handed’’ by the KPK in charges. The Indonesian Criminal Code, concerns raised by sections of the public, an anti-graft sting operation. The which is the key criminal statute in the KPK and factions of the House of Constitutional Court Judge is alleged to Indonesia, provides, in principle, that only Representatives in respect of some of the have received USD 161,000 from a meat individuals can commit criminal offences. proposed amendments, including limiting importer in connection with the court’s Although a number of laws, including the the KPK’s authority to conduct judicial review of a revision to the animal Anti-Corruption Law, have introduced surveillance or wiretapping during the husbandry law. This is the second high corporate criminal liability for specific preliminary phase of investigations. profile bribery scandal to have rocked the offences, law enforcers have been Constitutional Court in recent years with traditionally reluctant to pursue corporate Prosecutions and the former Constitutional Court Chief perpetrators and have instead brought Justice being sentenced to life in prison charges against the individuals involved. enforcement actions for accepting bribes and money The KPK, which is independent of the laundering in connection with an election In late 2016, the Indonesian Supreme police and the Attorney-General’s Office, dispute in 2015. Court introduced a new regulation on
52 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
procedures for handling criminal offences Other developments These trends and developments offer committed by corporate entities (2016 Indonesia’s Transparency International greater certainty in what is a long road in SC Regulation). This is the first attempt Corruption Perceptions Index ranking for Indonesia’s fight against corruption. by the Supreme Court to regulate the 2016 dropped to 90 (from 88 in the procedure and settlement of liabilities previous year) out of 176 countries. BACK TO MAP from corporate crimes arising under the Despite the slight fall in ranking, various laws. Indonesia is continuing with its efforts to combat bribery through greater national With the introduction of the 2016 SC and international cooperation and Regulation, it is anticipated that law intelligence sharing as well as enforcers will increasingly prosecute improvements to bureaucracy and public corporate entities involved in services, including E-procurement corporate crimes. programmes and information sharing.
June 2017 53 ANTI-BRIBERY AND CORRUPTION REVIEW
JAPAN
Changes to legislation Prosecutions and million, resulting in an internal review of In June 2016, an amendment to the enforcement actions the company’s processes to prevent such conduct from occurring in the Code of Criminal Procedure in Japan On 28 November 2016, the Nagoya High future. A trial date is yet to be set. was announced which establishes a Court sentenced Hiroto Fujii, the Mayor system of plea-bargaining. It is expected of Minokamo, Gifu Prefecture, to that this new plea-bargaining system will 18 months in prison, suspended for Other developments become effective by June 2018. The three years, with an additional fine of The OECD urges the Japanese plea-bargaining system will only apply to JPY 300,000. The decision overturned government to step up its efforts to certain offences (Specified Offences), an earlier finding of acquittal by the fight international bribery including bribery. Nagoya District Court in March 2015. On 29 June 2016, the OECD Working Group on Bribery in International Under the plea-bargaining system, a The High Court found Fujii guilty of Transactions sent a high-level mission to prosecutor can enter into an agreement receiving improper payments amounting Japan to urge the Japanese government with a defendant (either an individual or a to JPY 300,000 from the president of a to step up its efforts to fight international legal entity) whereby, in return for the groundwater supply company, in bribery. On 30 June 2016, the Working defendant assisting prosecutors and connection with the installation of a Group issued a statement that “Japan police in investigating a Specified water-cleaning system at a public school. must make fighting international bribery Offence committed by a third party (a a priority”30. separate individual or legal entity), the The same company’s president prosecutor can agree to drop or amend (Mr. Masayoshi Nakabayashi) was Despite the repeated exhortations, it charges, or can agree the penalty to be found guilty by a differently constituted appears that Japan’s fight against bribery proposed to the court (although what District Court in relation to a variety of of foreign public officials is progressing penalty is ultimately imposed remains at bribery-related charges and sentenced slowly. Since Japan’s Unfair Competition the court’s discretion). to four years in prison. Prevention Law was amended to make it an offence to bribe foreign public officials to It is important to note that the In light of the decision, Fujii resigned as obtain advantages in international business plea‑bargaining system is only Mayor but has maintained his innocence, in 1999, only four cases of foreign bribery available to defendants when they lodging an appeal with the Supreme have been prosecuted in Japan. provide information or evidence in Court of Japan. On 29 January 2017, in respect of a Specified Offence the mayoral election that took place The Working Group highlighted the fact that committed by a third party, not in following his resignation, Fujii was Japan had not yet passed legislation respect of a Specified Offence that they re-elected as Mayor, obtaining a 57.1% allowing illegal proceeds derived from bribery themselves committed. vote of confidence, although a decision to be confiscated. In addition, the Working of the Supreme Court is still pending. Group recommended that Japan establish It will be interesting to see if this new an Action Plan to organise police and plea-bargaining system encourages On 22 November 2016, the Tokyo District prosecution resources in order to proactively employees charged with bribery to Prosecutor’s Office laid fraud charges detect, investigate and prosecute cases of provide evidence of any bribery-related against a former senior employee of a foreign bribery by Japanese companies. conduct separately perpetrated by their Japanese multinational banking and employers, in order to enter into an financial services company (who had In response, Japan confirmed its agreement with the prosecutor to drop been dismissed on disciplinary grounds in commitment to the global fight the individual charges laid against them. July of the same year). The defendant against corruption. was accused of embezzling JPY 770 BACK TO MAP
30 http://www.oecd.org/corruption/japan-must-make-fighting-international-bribery-a-priority.htm
54 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
SOUTH KOREA
Changes to legislation employees of state-owned entities, but requests for public action made through The Improper Solicitation and Graft Act also employees of certain public and normal procedures. The list also provides of Korea (the Graft Act), also known as private schools, for example, those an exception for “any act not deemed in the Kim Young-ran Act after its author, established under the Elementary and breach of social norms,” a standard which took effect on 28 September 2016, Secondary Education Act, the Higher has been criticized for its vagueness. ushering in major changes to South Education Act, the Early Childhood Korea’s anti-corruption regime. Education Act and the Private School Act Strict liability and low thresholds as well as employees of media One of the most unusual aspects of the Prior to the Graft Act, in respect of companies covered by Article 2(12) of the Graft Act is its blanket prohibition against public officials, South Korea’s Criminal Act on Press Arbitration and Remedies any public official receiving: (i) more than Act prohibited, among other things: Etc. for Damage Caused by Press KRW 1 million (USD 875) on a single (i) the bribing of public officials in Reports, regardless of whether there is occasion; or (ii) more than KRW 3 million connection with their duties; and any state ownership or control. Indeed, (USD 2,630) in a year irrespective of how (ii) public officials from accepting, the law’s inclusion of journalists was one or why the money is received; i.e. the soliciting, or promising to accept bribes. of the issues underlying the court money can be nominally entirely The Act on Combating Bribery of Foreign challenge mentioned above. unconnected with a public official’s Public Officials in International Business duties. The sanction for breach is a jail Transactions (FBPA), the analogue to the Article 8 of the Graft Act, which prohibits term of up to three years or a fine of U.S. Foreign Corrupt Practices Act and the receipt of bribes by public officials, KRW 30 million (USD 26,000) for both UK Bribery Act, prohibited bribing also prohibits the receipt, request, or the public official and the giver. officials of foreign governments and promise to receive bribes by the spouse public international organisations. of a public servant in connection with his Public officials are entirely prohibited from or her official duties. accepting, requesting, or promising to A series of public scandals beginning in accept cash or benefits in connection 2011 and culminating with the Sewol The prohibition of unfair solicitation with their duties, even in quantities below ferry disaster in 2014 led to calls for Article 5 of the Graft Act prohibits any the amounts described above. stricter anti-corruption rules and person from, directly or indirectly, enforcement actions. The Graft Act, soliciting or requesting a public official to Instead, the only protection is provided which was first proposed in 2013, was subvert their duties by taking an action under the so-called ‘3-5-10 Regulation’, enacted on 27 March 2015. falling into one of 15 prohibited the Act’s Enforcement Decree, which sets categories. Notably this prohibition low and effectively ‘safe harbour’ The law faced immediate constitutional applies irrespective of whether any thresholds for the giving and receiving of challenges by the Korean Bar Association money is involved or promised. cash and other benefits. The 3-5-10 prefix and Journalists Association of Korea comes from the monetary limits defining which were struck down by South The 15 prohibited categories are broadly the safe harbour which are: (i) KRW Korea’s Constitutional Court in a ruling in drafted and include, among other things, 30,000 (USD 27) for food and drink; July 2016, paving the way for the law’s causing a public official to grant (ii) KRW 50,000 (USD 45) for gifts; and implementation. A minor amendment of authorisations or licences; intervene in or (iii) KRW 100,000 (USD 90) for funerals the law’s wording came into force on influence appointments, promotions, and festive occasions such as weddings. 30 November 2016. school admissions or grading; disclosing confidential information; and influencing Notably, in the context of Korean An expansive view of public officials investigations or judgments. business entertainment, gift giving, and Article 2 of the Graft Act expands the business culture, these limits are definition of “public official” to include not Article 5 also contains a list of seven extremely low. only public sector employees such as circumstances under which the government officials and covered prohibitions do not apply, such as
June 2017 55 ANTI-BRIBERY AND CORRUPTION REVIEW
Corporate liability included, among other things, extorting Enforcement trends Article 24 of the Graft Act provides for tens of millions of dollars from South The focus on public officials and senior joint liability for corporations for their Korean corporations for the benefit of executives of South Korea’s powerful employees’ violations, unless the foundations operated by Park’s friend and chaebols represents a major shift toward corporation has shown “due attention confidante Choi Soon-sil. Samsung accountability for members of the and supervision” to prevent the violation Vice‑Chairman Lee Jae-yong was country’s elite who long seemed to enjoy in question. This is similar to the scheme arrested on 16 February 2017 on charges a certain immunity from criminal for corporate liability under the FBPA. that he made donations to Choi’s prosecution. The trend is likely to foundations in exchange for favourable accelerate following the arrests of former Prosecutions and treatment from Park’s government. President Park and Lee which have led to enforcement actions a public outcry against corruption at the Continued ‘Clean Up’ efforts against There have been no prosecutions under highest levels of South Korean society. public prosecutors the Graft Act so far since its In December 2016, a senior prosecutor implementation in September 2016. Although there is yet to be a major case was sentenced to four years in prison for However, several notable investigations brought under the Graft Act since its pressuring Korean Air to award and criminal cases under South Korea’s introduction in September, the combined approximately USD 12 million in contracts pre-existing laws have made international effects of the new law and recent to his brother-in-law’s cleaning company headlines amidst images of widespread enforcement actions have already left their in exchange for closing an investigation. public demonstrations. mark on Korea’s lively business culture, as The prosecutor was indicted in July 2016 noted in recent media commentaries and on separate charges (of which he was President Park Scandal observed by our local attorneys. Popular later acquitted) that he accepted millions On 10 March 2017, President Park dining and nightlife spots have seen a of dollars in bribes from an online Geun‑hye was removed from office drop off in business, while some videogame company in the form of stock. following the Constitutional Court’s restaurants are offering special menus The case was one of a number of unanimous decision to uphold Park’s with prices below the Graft Act’s high‑profile bribery cases involving the impeachment by the National Assembly USD 27 limit for foods and drink. abuse of public prosecutorial powers in in December 2016. On 31 March 2017, recent years. Park was arrested on charges that BACK TO MAP
56 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
PEOPLE’S REPUBLIC OF CHINA
Changes to legislation The Graft and Bribery Interpretation • The 2017 Draft does not include the Following the legislature’s amendment of also raises the minimum threshold for detailed definition of commercial the Criminal Law in 2015, the Supreme the prosecution of bribing state officials bribery that was contained in the 2016 People’s Court (SPC) and the Supreme from RMB 5,000 to RMB 30,000 Draft, but adopts a more general People’s Procuratorate (SPP) have (approximately from USD 720 to definition which is closer to that set out published further guidelines on handling USD 4,400), in the absence of specific in the current AUCL. circumstances (such as the involvement corruption related cases. Separately, one • Regarding employers’ vicarious liability, of three or more people or bribing the year after the publication of the first draft under the 2016 Draft, an employer is judiciary, in which case the minimum amendment to the Anti-Unfair liable for bribery by its employee for the threshold is RMB 10,000 (approximately Competition Law (AUCL), the PRC purpose of seeking business USD 1,500)). legislature released an updated draft opportunities or competitive amendment to the AUCL which removes advantages for the employer, unless The Graft and Bribery Interpretation some of the notable changes contained the employee’s accepting or receiving further clarifies the meaning of certain in the first draft amendment. bribes is against the employer’s aggravating factors in the sentencing interest. In contrast, the 2017 Draft for bribery, such as “relatively large The Graft and Bribery Interpretation broadens the exception to cover amount”, “huge amount”, “causing On 18 April 2016, the SPC and the SPP circumstances under which the heavy loss to State interest” and various jointly issued the Interpretation of Several employer “has evidence to prove it was “serious circumstances.” Issues Concerning the Application of Law an employee’s personal conduct.” in Handling Criminal Cases Related to Graft and Bribery (Graft and Bribery These changes signal the PRC • In terms of fines, under the 2017 Draft, Interpretation), with the aim of providing government’s intention to further tighten the range is fixed between RMB up-to-date guidelines for prosecuting and its tough stance on corruption in the 100,000 and RMB 3 million handling criminal cases involving context of a maturing economy. (approximately USD 14,500 to 435,000), corruption activities. whilst under the 2016 Draft, the fine Draft amendments to the Anti-Unfair may be calculated based on 10% to The Graft and Bribery Interpretation has Competition Law 30% of the company’s illegally obtained sought to clarify, inter alia, monetary One year after the publication of the first business revenue, which creates more thresholds for prosecution and draft amendment to the AUCL in uncertainty and could generate conviction, the definition of key elements February 2016 (2016 Draft, as reported in significant fines in serious cases. of corruption offences, and the our 2016 Review), the PRC legislature circumstances under which leniency released an updated draft amendment to Enhanced regulations in the may be granted. the AUCL for public comments in healthcare sector February 2017 (the 2017 Draft). Healthcare has always been a sector with In particular, the Graft and Bribery high corruption risks. In the past year, the Interpretation expands the definition of Compared with the 2016 Draft, the 2017 healthcare sector has seen new “money and property” as forms of bribes Draft appears to adopt a more regulations to combat commercial provided under the PRC Criminal Law. conservative approach. For example: bribery. For example: The definition now includes benefits that • The 2017 Draft removes the • In December 2016, the PRC can be measured or obtained by money, eye‑catching provision which imposed government promulgated the “two such as home renovation, debt relief, liability on those who knew or should invoice policy” in the pharmaceutical membership services, and travel. The have known that activities were sector, with the aim of making costs value of the bribe is calculated as the anti‑competitive (including commercial and margins of distributors more money actually paid or the market price bribery) but who still provided facilitation transparent and of minimizing the risks of the benefits. or support for such activities. of improper payments through third party distributors.
June 2017 57 ANTI-BRIBERY AND CORRUPTION REVIEW
• In January 2017, the PRC government prevented the regulators from treating hundred of these involved very senior published opinions on pharmaceutical these incentives as commercial bribes on government officials at or above the sector reform, including measures to the grounds that they were not properly provincial and ministerial level. strengthen the regulation of medical documented and/or they may otherwise representatives by limiting their have had an anti-competitive effect. Enforcement actions have been common activities to academic education/ These actions indicate that the in the sectors of healthcare, consumer promotion and technical consultancy regulators’ understanding of “commercial goods, real estate, manufacturing and and by prohibiting their sales activities. bribery” under the AUCL appears to be financial services, but have now extended broader than the traditionally understood to new sectors such as TMT. Prosecutions and meaning, and suggests that the legality of Another remarkable trend is the enforcement actions rebates and discounts (even where consistent with market practice) needs to strengthening of cross-border The most notable enforcement actions be carefully reviewed under PRC law. cooperation. The SPP has highlighted in currently are those in the “industry its most recent annual report that, since sweep” by the Shanghai Administration launching the “fox hunt” campaign (which for Industry and Commerce against tyre Enforcement trends targets overseas suspects of corruption manufacturers, including Michelin, The anti-corruption crackdown in the offences) in late 2014, over 160 suspects Bridgestone, and other multinational PRC which started in 2012 has have been extradited or convinced to players. The actions relate to sales continued. According to a recent speech return to China. incentives/rebates provided by the by Jianzhu Meng, the head of the Central manufacturers to their distributors in the Political and Legal Affairs Commission of It is envisaged that these enforcement form of gift cards, tour cards, gas cards the Communist Party of China, almost trends will continue for the next few years. and the like. Some of these sales 100,000 corruption-related cases have been prosecuted in the five years since incentives were actually provided to BACK TO MAP privately-owned distributors instead of 2012 (representing a 32% increase over their employees, but this has not the previous five-year term), and over a
58 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
SINGAPORE
Changes to legislation Shanmugam stressed the Singapore pay a penalty of SGD 49,500 on charges There have been no relevant legislative government’s need to uphold its of having corruptly received payments “zero‑tolerance approach” from a fellow director on five different changes since the last Review in towards corruption33. occasions, which payments were May 2016. intended to be given to a Louis Vuitton The former Eastern Regional Director (LV) employee to induce that employee to Prosecutions and for marine fuels of BP Singapore further the company’s relationship with enforcement actions was charged with obtaining about LV. Although the payments, which totalled In one of the biggest corruption scandals USD 4 million in bribes from a SGD 49,500, were never actually paid to in Singapore, the Singapore courts had businessman to advance the business the LV employee, the judge found that initially found six leaders of a interest of the latter’s company with the this was “not fatal” to the prosecution’s ‘mega‑church’ (City Harvest Church) guilty oil and gas company34. case, since “paying an employee of your of conspiracy to commit criminal breaches client in order to secure more business is of trust by conducting sham investments The case of Public Prosecutor v Woo obviously corrupt and so is the receiving and round-tripping transactions. They Poh Liang [2016] SGDC 303 concerned of monies in order to do the same”. were found guilty notwithstanding the the prosecution of Staff Sergeant Woo Significantly, the judge stated that there absence of evidence of wrongful gain and Poh Liang, who pocketed SGD 35,000 in was no presumption that cases of private their belief that they were acting in the bribes, the largest in Singapore’s history sector corruption would only attract non- best interests of the church and in with regards to police officers receiving custodial sentences, and that the obedience to their trusted pastor, and monetary bribes. The judge affirmed prevailing sentencing consideration were sentenced to jail terms ranging from Singapore’s uncompromising position should be that of general deterrence. 21 months to 8 years. On appeal, the against law enforcement officers caught Singapore High Court revised the original for corruption offences and was of the Another recent case shows that custodial charges brought against the key church view that the defendant should face a sentences for bribery-related offences leaders under section 409 of the Penal custodial sentence of significant length. may be reduced where the defendant Code (for aggravated criminal breach of The defendant was sentenced to makes restitution of all bribes received, trust), and convicted them of a lesser 31 months’ imprisonment. as well as compensation for any loss charge under section 406 of the Penal caused. In Mathew Koottappillil Mathew v Code (for criminal breach of trust In Public Prosecutor v Heng Tze Yong Public Prosecutor [2017] SGHC 37, the simpliciter). As a result, their sentences [2016] SGDC 291, the Singapore Courts appellant, an employee of Shimizu were significantly reduced, with jail terms demonstrated the tough stance they Corporation, had been convicted of now ranging from 7 months to 3.5 years.31 adopt in sentencing persons guilty of receiving SGD 1,500 in bribes. The Dissatisfied with the High Court’s ruling, corruption, even in the private sector. appellant’s conduct had caused the the Attorney General’s Chambers (AGC) Although the defendant was a first-time company (Shimizu Corporation) a total has filed a criminal reference to the Court offender who did not solicit the bribe of loss of SGD 6,240 (inclusive of the SGD of Appeal, to clarify the law under which SGD 7,000, he was still given a custodial 1,500 bribe). The Singapore High Court the High Court made its decision to sentence of 5 weeks’ imprisonment. later reduced the appellant’s custodial reduce the jail terms of all six church sentence of 6 weeks to 4 weeks, on the leaders, on the basis that the High Court’s In Public Prosecutor v Koh Puay Boon basis that the appellant made full decision engaged important questions of [2016] SGDC 159, a director of a private compensation to Shimizu Corporation, public interest32. The AGC’s move came company in Singapore was sentenced to and also issued a formal apology to the after Law and Home Affairs Minister K 9 months’ imprisonment and ordered to project manager of the company.
31 See Selina Lum, Ng Huiwen, “City Harvest appeal verdict: Six church leaders get reduced jail terms, Kong Hee gets 3.5 years”, The Straits Times (7 April 2017), please see: http://www.straitstimes.com/singapore/courts-crime/city-harvest-appeal-verdict-six-church-leaders-get-reduced-jail-terms-kong 32 See Angela Tan, “AGC file criminal reference with Court of Appeal over City Harvest Church verdict”, The Business Times (10 April 2017), please see: http://www. businesstimes.com.sg/government-economy/city-harvest-trial/agc-file-criminal-reference-with-court-of-appeal-over-city 33 See Charissa Yong, “City Harvest appeal: Ruling may have implications on corruption cases, says Shanmugam”, The Straits Times (9 April 2017), please see: http:// www.straitstimes.com/politics/ruling-may-have-serious-implications-shanmugam 34 See Elena Chong, “Ex-BP executive charged with taking $5.7m in bribes”, The Straits Times (9 March 2017), please see: http://www.straitstimes.com/singapore/ courts-crime/ex-bp-executive-charged-with-taking-us4m-in-bribes-possibly-largest-amount-a
June 2017 59 ANTI-BRIBERY AND CORRUPTION REVIEW
In late 2016 and early 2017, a director painful consequences that will flow from investigation that resulted in prosecution and ten former and present employees weak-willed corporate executives”. of those responsible. of Singapore waterproofing company, Significantly, the judge also noted that it TAC Contracts Pte Ltd, were charged will be “incumbent on senior officers to Other developments with 368 counts of corruption for giving take a stand and if it is not possible to Singapore Standard for bribes ranging from SGD 490 to SGD put an end to such illegal activities – then ABC procedures 59,000 in the course of their they should part company or …report the A new Singapore Standard – the SS ISO 37 employment. TAC Contracts Pte Ltd’s activities to the authorities” . 37001 – to help Singapore companies director, Donald Ling Chun Teck, had strengthen their anti-bribery compliance been giving corrupt payments to his Overall, the number of corruption systems and processes was launched by clients, including managing agents, complaints and cases investigated by the the CPIB and the Standards, Productivity contractors and property agents, when Corrupt Practices Investigation Bureau and Innovation Board (SPRING his company won jobs with them. (CPIB) reached a new low in 2016, Singapore) on 12 April 2017. Companies The payments were disguised as referral according to statistics released by the that are venturing overseas can adopt the 38 fees, commissions or tokens of CPIB on 12 April 2017. In 2016, CPIB standard to benchmark the integrity of appreciation, and were given to his received 808 complaints, an 8% their governance processes against clients in cash either personally or by his decrease compared to the number international standards and practices. sales staff. He was sentenced to 30 received in 2015. A total of 118 cases 35 months’ imprisonment . The remaining were subsequently pursuable, down from Global assessment 36 employees have yet to be sentenced . 132 cases in 2015. The majority of non- In the Rule of Law 2016 Index compiled pursuable cases were because of by the World Justice Project, Singapore Enforcement trends insufficient, vague or unsubstantiated was ranked ninth overall worldwide, There is a developing expectation that information. In 2016, there were 104 maintaining its position from 2015. senior officers should be taking a stand individuals prosecuted for corruption Singapore was ranked first under against corrupt practices. A senior offences and 96 per cent of them were “regulatory enforcement”, second under executive involved in one of the largest private sector employees. Custodial “absence of corruption”, fourth under corporate graft scandals in Singapore sentences were meted out to a majority “criminal justice” and “civil justice”, and concerning shipbuilder ST Marine was of them in some instances. second in the Asia-Pacific region overall.40 sentenced to 20 weeks’ jail and a fine of SGD 100,000. Mok Kim Whang was the Singapore also continues to increase its The Corruption Perceptions Index 2016 company’s senior vice-president from levels of cooperation with other compiled by Transparency International June 2000 to July 2004, and was found governments. In September 2016, the gave Singapore a score of 84 (out of 100) to have continued a pre-existing practice Singapore’s Attorney General’s Chambers for the perceived levels of public sector at ST Marine of paying bribes to its (AGC) approved the extradition of two corruption, placing it seventh in the world customers’ employees and covering up former executives of a Singapore-based rankings. While Singapore’s score fell the kickbacks with a false paper trail of defence contractor at the centre of a (slightly) from 85 in 2015, its ranking 39 “entertainment expenses”. The bribery scandal involving the U.S. Navy. moved up a spot from 2015. sentencing judge remarked that the jail The Corrupt Practices Investigation Bureau (the CPIB) has worked closely term for Mok “adequately recognises the BACK TO MAP need to send a strong signal to deter with U.S. authorities to conduct the joint like-minded offenders that there are
35 See Elena Chong, “Businessman jailed for giving bribes”, The Straits Times (23 December 2016), please see: http://www.straitstimes.com/singapore/businessman- jailed-for-giving-bribes 36 See Shaffiq Idris Alkhatib, “10 current and former employees of firm accused of corruption”, The Straits Times (1 March 2017), please see: http://www.straitstimes. com/singapore/courts-crime/10-current-and-former-employees-of-firm-accused-of-corruption 37 See Amir Hussain, “Former ST Marine senior vice-president in graft scandal gets 20 weeks’ jail, $100,000 fine”, The Straits Times (26 September 2016), please see: http://www.straitstimes.com/singapore/courts-crime/former-st-marine-senior-vice-president-in-graft-scandal-gets-20-weeks-jail 38 See Wong Siew Ying, “Corruption cases in Singapore fell to record low in 2016, says CPIB at launch of new anti-bribery standard”, The Straits Times (12 April 2017), please see: http://www.straitstimes.com/business/companies-markets/corruption-cases-in-singapore-fell-to-record-low-in-2016-says-cpib-at 39 See AsiaOne News, “Singapore court allows extradition in US Navy bribery case” (21 September 2016), please see: http://news.asiaone.com/news/singapore/ singapore-court-allows-extradition-us-navy-bribery-case 40 https://worldjusticeproject.org/our-work/publications/rule-law-index-reports/wjp-rule-law-index%C2%AE-2016-report
60 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
THAILAND
Changes to legislation • companies should monitor and assess The Corruption Court Act provides for Corporate Measures to corruption risks, including preparing the establishment of: appropriate measures to prevent and Prevent Corruption • the Central Criminal Court for combat corruption; On 23 March 2017, the Office of the Corruption and Misconduct Cases National Anti-Corruption Commission • companies should adopt clear policies (the Central Corruption Court), with (NACC) published a handbook on on facilitation payments, gifts and jurisdiction over Bangkok, Samut corporate measures which should be hospitality expenditures; Prakan, Samut Sakhon, Nakhon adopted by companies in order to Pathom, Nonthaburi and Pathum Thani • companies should conduct due prevent bribery of public officials, foreign provinces; and public officials and officials of diligence on their joint venture partners, international public organisations (the business partners, advisors and agents; • the Regional Criminal Courts for Corruption and Misconduct Cases Handbook). The preparation of the • companies should adopt adequate (the Regional Corruption Courts), with Handbook was based on best practice internal controls and good jurisdiction over the areas specified in guidance published by the United accounting standards; Nations Office on Drugs and Crime, the the relevant Royal Decree. Organisation for Economic Co-operation • companies should adopt measures and Development and Transparency and controls to detect and report The Central Corruption Court was formally International as well as on ISO 37001. violations; and opened on 1 October 2016, while the Royal Decree establishing the Regional • companies should carry out Criminal Courts was published in the The Handbook is intended for companies periodic reviews and evaluations of Royal Gazette on 18 February 2017. Nine who may be subject to the Organic Act the anti-corruption programme. on Counter Corruption B.E. 2542 (1999) Regional Corruption Courts will cover the remaining 71 provinces; seven of these (the Organic Act) (as amended in 2015). New specialised Corruption Courts were opened on 1 April 2017, while the The 2015 amendments criminalised The Thai government has recently remaining two are due to be opened on bribery of “foreign public officials” and adopted legislation intended to increase 1 October 2017. The Central Corruption “officials of an international public efficiency in the judicial system and, in Court has discretion to accept or reject organisation”, increased penalties for particular, to address the increasing any case arising outside the provinces bribery and corruption offences, and number of corruption cases. The Act on specified in (i) above but filed with the introduced corporate liability for offences the Establishment of Criminal Court for Central Corruption Court. committed by a company’s affiliates, Corruption and Misconduct Offence B.E. employees, agents or any persons acting 2559 (2016) (the Corruption Court Act) The Corruption Courts now have explicit on its behalf, where the company did not (which became effective from 17 August jurisdiction over criminal cases in which: have ‘appropriate measures’ to prevent 2016) establishes two types of the commission of the offence by such specialised corruption courts (the • public officials are charged with persons. Penalties include a fine of up to Corruption Courts) with jurisdiction to malfeasance in office or irregularities; twice the damages or benefits received hear corruption and misconduct cases • public officials or individuals are charged by the person committing the offence. involving ‘public officials’. Excluded from with money laundering in relation to the ambit of the Corruption Courts are malfeasance in office or irregularities or The measures recommended by the cases within the jurisdiction of the violations of laws on submission of bids NACC in the Handbook include: Supreme Court’s Criminal Division for to government agencies, laws on Persons Holding Political Positions, set • senior management should clearly public-private partnerships or other laws up in 1999 specifically to handle articulate zero-tolerance of corruption, combating corruption; including applying internal controls to corruption and misconduct cases prevent corruption; involving persons holding political • individuals are charged with giving or positions in Thailand. receiving bribes, coercing or using influence to force public officials to act
June 2017 61 ANTI-BRIBERY AND CORRUPTION REVIEW
or not to act in accordance with the • Trial in absentia is allowed where (i) the Enforcement trends Criminal Code or other laws; and defendant has absconded and the Corruption has been and is still a court has issued an arrest warrant but • individuals are charged with deliberately significant problem in Thailand. Since the defendant cannot be apprehended; refusing to declare assets, falsely the military coup in 2014, a lot of effort or (ii) where the defendant is sick or declaring assets or covering up assets has gone into combating corruption otherwise absent, but is represented that should have been declared. and bribery, including reforming by an attorney and the court has anti‑corruption laws, establishing a new granted permission. “Public officials” include state officials, anti-corruption watchdog and foreign public officials and officials of specialised corruption courts, and international public organisations Prosecutions and improving and accelerating investigation pursuant to the Organic Act, and enforcement actions and enforcement proceedings. officials pursuant to the Criminal Code We have seen an increasing number of (e.g. officials of the Thai government and corruption cases brought to the NACC As a result, investigation and enforcement Thai police officers). and the Thai courts. There have been activities for corruption offences have several cases where persons holding become more widespread. A general New laws on procedures for political positions and public officials were trend has been for the focus of corruption corruption and misconduct cases sentenced for corruption. investigation proceedings to expand To ensure fair, transparent and efficient further from high-ranking political officials trials, Thailand enacted two new pieces On 28 July 2016, the Criminal Court ruled to state officials, local government of legislation which particularly govern that Benja Louicharoen, who was Deputy officials and officials of state enterprises. corruption and misconduct cases filed Finance Minister during Yingluck with the Corruption Courts – the Act on Shinawatra’s government, and three Prime Minister General Prayut Chan-o-cha Procedures for Corruption and senior Revenue Department officials, issued orders to suspend Sukhumbhand Misconduct Cases B.E. 2559 (2016) were guilty of helping Panthongtae and Paribatra from his duties as Governor of (effective from 1 October 2016) and the Pinthongta Shinawatra, son and daughter Bangkok in August 2016 and to finally Regulations of the President of the of former Prime Minister Thaksin remove him from office in October 2016 Supreme Court Concerning Procedures Shinwatra, evade nearly THB 16 billion in as a result of several ongoing for Corruption and Misconduct Cases income taxes. However, they were investigations into alleged tender B.E. 2559 (2016) (effective from released on bail and are currently irregularities. These include the 2 October 2016). appealing against the decision. procurement of musical instruments for BMA’s schools, the THB 39.5 million The new laws introduced the following On 27 December 2016, the Court of “Bangkok Light of Happiness” New Year measures which will only apply in cases Appeal sentenced Bhichit Rattakul, project and the THB 16.5 million before the Corruption Courts: former Governor of Bangkok, to five renovation of the Bangkok Governor’s years in prison in a corruption case, office. The investigations are still ongoing • An inquisitorial system shall be used overriding the Court of First Instance’s and he will be prosecuted if there is by the Corruption Courts. This means decision to dismiss the case. The sufficient evidence to prove the offence. that the courts can be actively conviction was related to the purchase by involved in investigating the facts of the Bangkok Metropolitan Administration On 29 March 2017, the Central the case (as opposed to an adversarial (BMA) of a plot of land for use as a Corruption Court ruled to confiscate the system which is used in the normal parking area. It was claimed that Bhichit equivalent of THB 62.7 million in cash criminal procedures). Rattakul together with seven other from the overseas bank account of • A case shall not be barred by officials demanded and received a Juthamas Siriwan, former governor of the prescription if the accused or the brokerage fee of THB 18 million for the Tourism Authority of Thailand. According defendant absconds during the trial purchase. Bhichit Rattakul was released to the news, this amount was transferred process or the enforcement process. on bail and is appealing against the to her bank account by an American decision to the Supreme Court. couple in exchange for them being awarded a THB 60 million contract to
62 June 2017 ANTI-BRIBERY AND CORRUPTION REVIEW
organise the annual Bangkok International military coup) and the revocation was later Suriya Juengroongruangkij, his deputy Film Festival between 2002 and upheld by the Central Administrative Wichet Kasemthongsri and the Thai 2007. Juthamas Siriwan and her daughter Court. Surapong Tohvichakchaikul is Airways Board Director Kanok Aphiradee were also sentenced to jail for 66 years banned from politics for five years as a between the years 2004 and 2005, when and 44 years, respectively, for the bribery. result of his impeachment. Thai Airways purchased a Boeing A petition for bail was rejected by the B777‑200ER and 6 Airbus A340-500s Court of Appeal due to the seriousness of In the private sector, two major state and 600s. Evidence has supported the case and the high penalties. This case enterprises (i.e. Thai Airways and PTT) suspicions that these individuals and is now in the appeal process. are also under scrutiny after the United others, totalling 26 people, accepted Kingdom’s Serious Fraud Office revealed bribes to prefer Rolls-Royce and its Investigations of cases involving former that Thailand was among seven countries products in procurement bidding. high-ranking political officials associated in which Rolls-Royce was found to have Similarly, news from various sources with former Prime Minister Thaksin conspired to bribe, or failed to prevent claim that the U.S. Department of Justice Shinawatra are still being raised and bribery. A special committee has been found that employees of PTT and its attract media attention. The most recent set up within the NACC to investigate subsidiary PTT Exploration and case involves former foreign minister bribery allegations involving Thai Airways Production were involved in accepting Surapong Tohvichakchaikul who was and PTT. Investigations into both cases bribes from Rolls-Royce of more than impeached on 30 March 2017 for are still ongoing. THB 385 million over ten years in return malfeasance in re-issuing the national for awarding procurement deals. passports of ousted former Prime Minister According to the National News Bureau Thaksin Shinawatra. Thaksin’s passports of Thailand, Thai Airway’s case involves BACK TO MAP were revoked during Abhisit Vejjajiva’s the possible bribery of individuals, government (2 years after the previous including former Minister of Transport
June 2017 63 This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. www.cliffordchance.com
Clifford Chance, 10 Upper Bank Street, London, E14 5JJ
© Clifford Chance 2017
Clifford Chance LLP is a limited liability partnership registered in England and Wales under number OC323571 Registered office: 10 Upper Bank Street, London, E14 5JJ
We use the word ‘partner’ to refer to a member of Clifford Chance LLP, or an employee or consultant with equivalent standing and qualifications.
If you do not wish to receive further information from Clifford Chance about events or legal developments which we believe may be of interest to you, please either send an email to [email protected] or contact our database administrator by post at Clifford Chance LLP, 10 Upper Bank Street, Canary Wharf, London E14 5JJ.
Abu Dhabi • Amsterdam • Bangkok Barcelona • Beijing • Brussels Bucharest • Casablanca • Dubai Düsseldorf • Frankfurt • Hong Kong Istanbul • Jakarta* • London Luxembourg • Madrid • Milan Moscow • Munich • New York • Paris Perth • Prague • Rome • São Paulo Seoul • Shanghai • Singapore • Sydney Tokyo • Warsaw • Washington, D.C. *Linda Widyati and Partners in association with Clifford Chance. Clifford Chance has a co-operation agreement with Abuhimed Alsheikh Alhagbani Law Firm in Riyadh. Clifford Chance has a best friends relationship with Redcliffe Partners in Ukraine.
J201705150050850