Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary sources. This month we ask: Which company was the latest to resolve foreign bribery allegations with French authorities? What did the European Court of Justice have to say about the legality of publicly accessible beneficial ownership registries? What did the Organisation for Economic Cooperation and Development (OECD) Working Group on Bribery have to say about Portugal's and Turkey's anti-corruption efforts? The answers to these questions and more are here in our November 2022 Top 10 list.
1. European Aircraft Manufacturer Settles Foreign Bribery Allegations in France
On November 30, 2022, a French court approved an approximately ?16 million corporate settlement between Airbus and France's National Financial Prosecutor's Office (PNF) that resolves bribery allegations relating to the sale of commercial aircraft, helicopters, and satellites between 2006 and 2011 to the governments of Libya and Kazakhstan. According to the PNF, the settlement is a "limited" extension of the January 2020 settlement between the company and the PNF, which was part of a record-setting, $3.9 billion coordinated resolution involving authorities in the United States, France, and the UK. According to officials, the conduct underpinning the November PNF agreement took place "over the same period and according to the same fraudulent scheme" addressed in the 2020 settlement. In reaching its latest agreement with PNF, Airbus did not make any admission of guilt.
2. Swiss Commodities Firm Fined in UK for Africa-related Bribery Convictions
On November 3, 2022, the UK Serious Fraud Office (SFO) announced that Glencore Energy UK Ltd. will pay £280,965,093 million following its June 2022 guilty plea to seven counts of bribery under the UK Bribery Act 2010 (UKBA), including five substantive bribery charges under Section 1 and two counts of failure to prevent bribery under Section 7, related to allegations that the company paid approximately $29 million in bribes to gain preferential access to oil in Africa. In the press release, SFO Director Lisa Osofsky stated: "This has been a landmark case in UK anti-bribery enforcement, marking the first time since the introduction of the Bribery Act 2010 that a corporate has been convicted for the active authorisation of bribery, rather than purely a failure to prevent it." The SFO first announced the charges in May 2022, the same month that the U.S. Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) announced coordinated foreign-bribery and market-manipulation resolutions with criminal and civil authorities in the United States, the UK, and Brazil. In September 2022, SFO Director Osofsky cited the Glencore resolution as an example of the SFO having "[i]ntensified and broadened [its] international collaboration and reach."
3. European Court of Justice Invalidates Public Access to Beneficial Owner Data
On November 22, 2022, the European Court of Justice struck down a provision of the EU Anti-Money Laundering Directive (Directive) that provided public access to information on beneficial ownership of companies. The Court ruled that registries showing personal details about a company's beneficial owners infringe on the right to respect private life and protect personal data, as protected under the Charter of Fundamental Rights of the European Union. Although acknowledging that public access to beneficial ownership registries increases transparency and can help prevent money laundering and other crimes, the Court held the interference entailed by the Directive is "neither limited to what is strictly necessary nor proportionate to the objective pursued." The decision means that information access will only be granted to persons or organizations that can demonstrate a legitimate interest. As we have discussed in previous Top 10s, beneficial ownership registries are key components of anti-corruption efforts in several countries (see, for example, our August 2022 Top 10 regarding the UK Register of Overseas Entities and our December 2020 Top regarding U.S. efforts to promote the disclosure of beneficial ownership). In that sense, the Court's decision is a setback for such efforts.
4. Former Financial Services Executive Arrested on Ghana-related Bribery Charges
On November 3, 2022, Asante Berko, a former executive at the London subsidiary of a New York-based financial services company was arrested at London's Heathrow Airport on charges that he allegedly participated in a scheme to bribe Ghanaian officials while employed at the financial services company. Concurrent to the arrest, a court in the Eastern District of New York unsealed a six-count indictment against Berko that had been filed in August 2020. The indictment alleges FCPA violations stemming from an alleged scheme to bribe Ghanaian government officials in exchange for helping a Turkish energy company, a client of the financial services company, win approval for a power plant project in the Republic of Ghana. In June 2021, Berko resolved similar claims brought by the U.S. Securities and Exchange Commission (SEC), which were based on the same Ghanaian bribery allegations, for approximately $329,000 without admitting or denying the SEC's charges.
5. SEC Reports Record Setting Whistleblower Tips in FY2022
On November 15, 2022, SEC released its annual Report to Congress regarding its Whistleblower Program. According to the report, SEC received 12,322 tips in 2022, which marks a slight increase from FY2021. SEC reported that it awarded approximately $229 million across 103 awards, making FY2022 the second highest year in terms of dollar amounts and number of awards. According to the report, SEC received 202 FCPA-related tips in FY2022, down from 258 FCPA-related tips received in the previous fiscal year. (The most common complaint category reported by whistleblowers was manipulation (2,558), with municipal securities and public pension (95) being the least.) The report also noted that, in FY2022, SEC adopted two amendments to the rules governing the Whistleblower Program. The first amendment expanded the definition of "related action" for purposes of whistleblower awards. Whistleblowers may now receive awards for certain actions brought by other entities, including designated federal agencies, in situations where those awards might otherwise be paid under the other entity's whistleblower program. The second amendment clarifies that SEC may only consider the dollar amount of a potential whistleblower award for the purpose of increasing the award, not for decreasing the award. The annual Whistleblower Report serves to remind companies to ensure that their reporting mechanisms, anti-retaliation policies, and investigation procedures are up to date and equipped to handle whistleblower reports.
6. U.S. Appellate Court Affirms SEC Denial of Whistleblower Award
On November 15, 2022, the U.S. Court of Appeals for the Second Circuit affirmed an SEC order denying John Doe his request for a whistleblower award, which he sought for his assistance in the SEC's successful enforcement action relating to an international bribery scheme. Although federal law directs SEC to pay a monetary award to a whistleblower who "voluntarily provided original information to the Commission that led to the successful enforcement," SEC may not do so where the whistleblower "is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award." At the time that he applied for the whistleblower award, Doe had entered, and the trial court had accepted, his guilty plea in connection with the bribery charges. Although he had not been sentenced, the Second Circuit agreed with the SEC's determination that Doe had been "convicted of a criminal violation related to" the bribery charges and denied his award application. The Second Circuit likewise rejected Doe's argument that the SEC had not adequately explained its reasoning in denying the whistleblower award.
7. World Bank Debars Spanish National for Corrupt Practices
On November 16, 2022, the World Bank announced the debarment of Carlos Barberán Diez for three years with conditional release in connection with a corrupt practice involving the Petroleum Governance and Management Project in Guyana. According to the World Bank, Barberán Diez approached several consulting companies and offered to influence procurement processes in exchange for future payments from those companies. As a result of the debarment, Barberán Diez and his two affiliated companies are ineligible for participation in projects financed by the World Bank and its related institutions. The settlement's conditional release terms require Barberán Diez to undertake corporate ethics training and his affiliated companies to implement certain integrity compliance measures.
8. OECD Working Group on Bribery Urges Portugal to Step Up Its Foreign Bribery Enforcement
In October 2022, the OECD Working Group on Bribery announced the results of its Phase 4 report of Portugal's implementation of the OECD Anti-Bribery Convention. All parties to the Convention are subject to a rigorous peer review process, Phase 4 of which focuses on the evaluated country's enforcement of the Convention and considers the country's particular challenges and positive achievements. According to the Working Group, detection of foreign bribery offenses remains low in Portugal and Portuguese authorities "prematurely closed foreign bribery cases without investigating relevant allegations thoroughly and proactively, with the number of cases terminated having increased significantly compared to Phase 3." According to the Working Group, Portugal has not addressed longstanding concerns regarding its legal framework, and sanctions for foreign bribery against natural and legal persons do not appear to be effective, proportionate, or dissuasive. The Working Group recommended that Portugal: (1) continue its efforts to raise foreign bribery awareness and provide training; (2) address key legal framework and implementation in relation to liability for legal persons and sanctions for legal and national persons; (3) enhance detection of foreign bribery through Portugal's Financial Intelligence Unit and company self-reporting; (4) take urgent steps to ensure authorities thoroughly and proactively investigate foreign bribery allegations; and (5) proactively seek co-operation and mutual legal assistance from foreign countries whenever appropriate. On a more positive note, the Working Group recognized Portugal's adoption of the National Anti-Corruption Strategy, the General Regime of the Prevention of Corruption, the establishment of the National Mechanism Against Corruption, and the enactment of legislation on whistleblower protection.
9. OECD Working Group on Bribery Expresses Concern Regarding Foreign Bribery Enforcement in Turkey
On November 10, 2022, the Working Group issued a statement that Turkey "should immediately address long-standing key recommendations to fight foreign bribery." The Working Group expressed concern that Turkey has failed to address outstanding deficiencies in key areas needed to fight foreign bribery, which were initially identified in a 2014 Phase 3 evaluation report. According to the Working Group, Turkey has failed to adequately implement long-standing recommendations relating to legal persons' liability for foreign bribery, whistleblower protection, and prosecutorial independence. Turkey has advised that these issues remain on the Turkish government's agenda and that relevant measures are forthcoming.
10. Malawi Vice-President Arrested on Bribery Charges
On November 25, 2022, Malawi Vice-President Saulos Chilima was arrested and later released on bail on corruption charges. Chilima allegedly received $280,000-and other items-from British businessman Zuneth Sattar in return for allegedly awarding Malawi government contracts. Sattar is already under investigation for alleged corruption in both the UK and Malawi. The arrest is believed to be a major move against high-level corruption in Malawi. In June 2022, Chilima was suspended from his vice-presidential duties pending investigation into the alleged Sattar-connected government contracts.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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