International Trade Law News

Published by Jacobson Burton Kelley PLLC

Today's guest post is by Tom Fox, a Houston, Texas-based attorney with a great deal of experience in international transactions and global anti-corruption policy and issues, including the Foreign Corrupt Practices Act (FCPA). Tom writes the "FCPA Compliance and Ethics Blog", a great resource on the FCPA and other corporate ethics and compliance-related issues.

Tom published the following post last month and I thought readers of this blog would find it useful. Thanks to Tom for including International Trade Law News on his top 15 list. Tom's very active and informative Twitter feed is @tomfoxlaw.
 

For some time now I have wanted to write about whom I read and why, so I thought it might be a good idea to list my 15 favorite blog sites. Below is a list of my favorites and as this blog provides my spin on all things related to the Foreign Corrupt Practices Act (FCPA) arena here we go…

The First Blog I Read Each Day

FCPA Blog/FCPA Professor - I know I said “the” first but it is always one of these two, depending on how early in the morning it is and where the mouse pointer ends up when I make the first click. But regardless of which I read first, here is why they are the first.

FCPA Blog - Richard Cassin, the ‘Dean’ of FCPA bloggers. If you want to know what is going on in the FCPA, or wider compliance, world on a once, twice or thrice times daily basis, this is the blog for you. In addition to Dick’s own posts, he gets the crème-de-la-crème of the world’s anti-bribery and anti-corruption writers to send in posts. If the FCPA Blog didn’t exist, someone would have to create it and fortunately for us Dick has done so.

FCPA Professor - Professor Mike Koehler on all things ‘legal’ in the FCPA world. If you want to know the latest Department of Justice (DOJ), Securities and Exchange Commission (SEC), federal court or anything else FCPA-thinking, from the law perspective, this is the blog for you. Always insightful, and provocative, if you want to hone your Socratic method, parry and thrust via email with the Professor. I guarantee you will learn quite a bit, I know I have.

After I get through these I tweet about them so everyone else can enjoy their collective wit and wisdom then it’s off to the following sites…

Corporate Compliance Insights - A collection of all things compliance, with a starting rotation and bullpen of great authors and contributors. But more than simply blogs, it has job postings, career advice and a broad list of resources for the compliance practitioner. And here’s the best part-it’s all free. Maurice Gilbert and his team have put together an outstanding compliance resource.

Open Air Blog - How can one best describe Howard Sklar’s blogging; withering, skewering, contrarian; he describes himself as “a crusty, irascible curmudgeon.” Here’s how I would describe Howard – one of the best compliance practitioners and commentators around. His insights are great and he uses the right touch of humor and real-world examples to get his point across. His blog is great and a ton of fun to read so saddle up and enjoy the (compliance) ride.

Corruptions Currents - From the Wall Street Journal, Sam Rubenfeld and Joe Palazzollo blog all-day on all things related to the anti-corruption world; FCPA, AML, Whistleblowers, Sanctions and General Anti-Corruption are all covered in this blog. Both journalists were jointly named by Ethisphere as one of the 100 most influential folks in the anti-corruption world. Great coverage, great insight AND it’s from the Wall Street Journal.

From across the pond…

thebriberyact.com - If you only have one resource for all things UK Bribery Act related, you could not find a better site. Barry Vitou and Richard Kovalevsky have put together that rarest of all blog sites, one that covers an entire subject in-depth, with both practical insight and analysis. Their interviews of the relevant players allow all compliance practitioners to develop insight into what the top UK regulatory officials are thinking about on the Bribery Act.

From North of the Border…

i-sight investigation blog - Lindsey Khan provides excellent insight on a wide variety of compliance topics. As with most advice we Americans receive from our Canadian cousins, her blogging is direct with practical guidance on how to navigate compliance challenges. She often provides Templates with her blogging to give you specific guidance on the ‘how to’ of compliance. So get thee to the Great White
North and check out i-sight.com

The Business Ethics Blog - Chris MacDonald teaches Philosophy, including business ethics, at Saint Mary's University and fortunately for the rest of us, he blogs. If you believe either “a) that corporations have a god-given right to accumulate as much capital as possible without regard for who gets hurt along the way; or b) that all corporations, and all people who work for them, are inherently evil, you will probably be irritated by [his] blog.” However, the rest of us can learn quite a bit from this thought provoking blog.

For Export Control…

International Trade Law News - My favorite site for all things trade compliance. Fellow UT Longhorn Doug Jacobson has put together a great site for export controls, sanctions, customs law, FCPA, antidumping and other international trade issues. He touches on the FCPA from time-to-time but he is “The Man” for me to catch up with all issues relating to export control.

Subscription Required - Sorry but you have to pay to read these great blogs…

Compliance Week Blogs - Matt Kelly has put together a plethora of all-star bloggers for his publication Compliance Week. Bruce Carton on the SEC; Melissa Aguilar on Regulatory Developments; Tammy Whitehouse on Accounting and Auditing; Neil Baker with his Global Perspectives; Jaclyn Jaeger with the Scuttlebutt and the Man, Matt Kelly himself. Any of these bloggers would be worth a solo listing but to have them on one site is fantastic.

Just Anti-Corruption - Editor Mary Jacoby and Reporter Chris Matthews blog throughout the day on anti-corruption and anti-bribery issues from a DC perspective. Both are great journalists and both have first-class sources. It puts information to us out in the provinces (as in ‘Outside the Beltway’) on what the DOJ is doing and thinking on all things FCPA.

Aggregators-they put it all together for you.

MyCorporateResource-Nick Montgomery is the hardest working man I know of in the blogosphere world. He manages to post literally hundreds of blogs each day, all focused for the in-house corporate lawyer. He has a specific FCPA site, which is found in the Client Memos, International Trade Sub Menu, Foreign Corrupt Practices Act. He posts blogs from Blue Chip law firms so the information is well, blue chip. It is a fabulous resource for all things an in-house counsel would need to know and a wonderful FCPA resource.

Law Agents-this site announces that “With over 1,400 subscriptions by users, lawgents.com is the internet's largest free law related news and blog aggregator.” How is that for an opening line. Best of all, its free and you can join, post or just use as a resource.

New Kids on the Block - Note I didn’t say young but these two guys have recently started blogging and from what I know of them, their stuff will be high quality.

Internal Investigations Blog - Cleveland attorney Jim McGrath focuses on all aspects of investigations relating to anti-corruption, anti-bribery, corporate fraud and employee-related theft. His blog is broader than simply the FCPA but just imagine the results of L’Affaire Renault if that company had read Jim’s blog before firing the soon to be multi-millionaire ex-employees.

White Collar Defense and Compliance – and finally… Mike Volkov has started up his own blog. For anyone who has heard Mike speak or read any of his Client Alerts you know this guy knows his stuff. I often wonder how he puts out so much material and manages to practice law, but he does and we, and the greater compliance world, are better for it. So check him out, as in now.

So that is my 15 ‘faves’ list. If you are not on it, please don’t take it personally, I’m sure that I read your blog and tweet about you.

Labels: FCPA

• U.K. Bribery Act Implementation
• Dodd-Frank Whistleblower Provisions
• Compliance Implications of “Industry-wide” FCPA Approach to FCPA Enforcement
• Anti-Corruption Update: Enforcement and Compliance Challenges in India, China, and Brazil
• Anti-Corruption Auditing Techniques

Labels: FCPA

Guest Post

Addressing Today’s Most Common Corporate Compliance Gaps

By Steve Kuzma and Paul Harris, Ernst & Young LLP*

Increased corporate accountability is a top priority for federal regulators and law enforcement agencies. In recent news, several highly publicized investigations have fueled the federal government’s heightened efforts to crack down on schemes involving conflicts of interest, procurement and consumer fraud, antitrust violations, false claims, corruption and bribery, export control violations, and other ethical breaches. An effective compliance program is the first line of defense in this era of increased scrutiny and penalties. Therefore, traditional organizational structures are now transforming under the pressure of ever-increasing laws and regulations that drive greater corporate accountability and transparency.

Today’s companies must adapt to a fluid regulatory environment and recent legislative actions (in health care and financial services reform, for example) and may even require an overhaul of entire processes. Additionally, companies must be able to adapt to constant legal and regulatory changes as the corporate compliance function will not be effective if operating on “auto pilot.”

In today’s market, we see several common compliance gaps that many organizations either have or are currently facing. They are as follows:

1. Corruption and bribery – The overhang of highly-publicized foreign bribery and corruption scandals has pushed the Foreign Corrupt Practices Act (FCPA) to the forefront of federal investigation and law enforcement priorities. It critical in this hyper-enforcement environment for U.S. companies that market overseas to minimize the risk of an FCPA investigation by implementing effective FCPA and international antibribery procedures. The failure to do so could expose companies to significant reputational and financial risks. As the Securities and Exchange Commission and the Department of Justice have stepped up efforts to investigate and prosecute business corruption, it is now more important than ever for U.S. companies to assess and strengthen their FCPA compliance program.

2. Supply chain due diligence – Many companies know their employees, but not all perform thorough third-party due diligence on the representatives, consultants, subcontractors and other third parties with whom they do business. Entities and individuals in the supply chain function may be liable for compliance issues that can create unforeseen criminal law and reputational issues for the company. Thorough and comprehensive third-party due diligence can help identify compliance and reputational risks before they become a regulatory problem.

3. Privacy/Information Security – The ever-increasing amount of electronic data being transmitted creates risks for companies. Many organizations today require consumers to provide personal data in business transactions – everything from a social security number to an email address. The collection and use of data is crucial to many online business models. It is equally important that consumers trust that their privacy is protected and used for its intended purposes only. Both U.S. and international laws require companies to do just that. However, there have been numerous instances where organizations are not paying enough attention to their international operations, where country laws recognize privacy as a fundamental right and has strict prohibitions on the collection and sharing of personal data.

4. Antitrust –Increased antitrust enforcement is a top priority for the Obama Justice Department. In response to a question from the American Antitrust Institute, President Obama stated that he would “direct [his] administration to reinvigorate antitrust enforcement . . . . [and] take aggressive action to curb the growth of international cartels.” Federal Trade Commission (FTC) Commissioner has proposed that the FTC should make subpoenas mandatory at the beginning of every formal investigation, rather than relying on voluntary requests for information. During an economic downturn, antitrust enforcement becomes critical. Fines and penalties in this area are enormous, driven by U.S. and EU programs that provide amnesty to the first person to disclose unlawful antitrust activities.

5. Export compliance – Globalization has pushed many U.S. companies to market overseas. In a rush to capitalize on new “growth areas,” companies often overlook export control requirements. Effective export compliance is viewed by the government as a national security issue. Exporters of defense articles, including technical data, first must be registered and must also comply with such requirements as obtaining the appropriate license, agreement management, vendor certifications and export control markings. Global companies are reporting an increase in federal enforcement activity in the area of export control compliance.

Our nation’s legislators and law enforcement officials have zeroed in on corporate misconduct. Fueled by recent scandals, new legislation and other initiatives have been rolled out to prevent, detect and punish a wide array of conduct. A harried, ineffectual response to investigation, an inadequate defense to prosecution or civil suit and consequential damage to corporate reputation, all await companies with “reactive” compliance and ethics programs. A proactive and robust compliance program that enables a company-wide understanding of and adherence to the many criminal, civil and administrative provisions provides the best armor in this targeted area.


*Messrs. Kuzma and Harris are part of Ernst & Young's Fraud Investigation and Dispute Services Practice and are based in Atlanta and Washington, DC, respectively. The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.

Labels: Export Controls, FCPA

Today, December 9th, marks International  Anti-Corruption Day.

In a statement marking International Corruption Day, Secretary of State Clinton said "The United States has made unprecedented strides over the past year to enforce our anticorruption laws and ensure our companies do not practice bribery or unfair practices in countries where they operate."

In order to promote the United Nations' anti-corruption campaign, the U.N.'s Office of Drugs and Crime (UNODC) has previously produced the following 60 second video that promotes the power to say no when confronted with bribery.

Labels: FCPA

The Government of Japan today enacted new sanctions on Iran. A summary of the new sanctions can be found here. 

Registration is now open for SIA's Fall ITAR Conference to be held in Washington, DC on November 15 and 16, 2010.

Danish and Japanese companies deny violating U.S. sanctions on Iran.

Reuters: Iran feels sanctions heat at UAE ports.

Texas resident arrested for attempting to export night vision sights to Russia. Further details on this unusual case can be found here and here.

Educational Testing Service (ETS) announced last week that resumed registrations in Iran for its TOEFL® and GRE® tests. The brief suspension was the indirect result of tighter U.N. Security Council restrictions on financial transactions involving Iran, which resulted in ETS's banking arrangements being discontinued. Students wishing to take the tests may register through Iran's National Organization of Educational Testing, or with credit/debit cards issued by banks that are not prohibited under U.N. or U.S. sanctions. ETS has permission from the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury to conduct its testing business in Iran.

Bangkok Post: Thailand is in the process of implementing a dual-use export control regime. 

FCPA Professor: The FCPA's Long Tentacles (discusses impact of FCPA investigations on mergers and acquisitions).

The U,K.'s Financial Services Authority today fined members of the Royal Bank of Scotland Group £5.6m for failing to have adequate systems and controls in place to prevent breaches of UK financial sanctions.

Labels: Export Controls, FCPA, Sanctions; Iran

In order to provide businesses with more time to prepare for the implementation of the recently passed Bribery Act, the U.K. Ministry of Justice announced today that implementation of the Bribery Act will be postponed for six months and will now go into effect in April 2011.

The Ministry of Justice also announced that in September 2010 it will launch a consultation exercise to draft guidance regarding the procedures that companies can put in place to prevent bribery. The guidance will be published in early 2011 and will be followed by a series of awareness-raising events to ensure affected companies are prepared for the changes to current law.

The Bribery Act, which received Royal Assent on April 8, 2010, will make the following changes to U.K. law:

• Introduce a corporate offense of failure to prevent bribery by persons working on behalf of a business. A business can avoid conviction if it can show that it has adequate procedures in place to prevent bribery.

• Make it a criminal offense to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official.

• Increase the maximum penalty for bribery from seven to 10 years imprisonment, with an unlimited fine.

The full text of the U.K. Bribery Act can be found here.

Labels: FCPA

U.S. Representative Peter Welch (D-VT) recently introduced legislation that could prohibit individuals and companies convicted of bribing foreign officials from contracting with the U.S. government.

The Overseas Contractor Reform Act (H.R. 5366) would require any individual, partnership or corporation found to be have violated the Foreign Corrupt Practices Act of 1977 to be proposed for debarment from any contract or grant awarded by the federal government within 30 days after a final judgment of such violation.

According to Representative Welch's office, the legislation was introduce in response to an ongoing investigation into whether Xe Services – formerly known as Blackwater Worldwide – bribed Iraqi officials.

"Simply put, those convicted of bribing foreign officials have no business doing business with the federal government," Welch said. He added that "companies that flagrantly violate the rule of law ... ought to be stripped of their ability to profit off of American contracts."

The bill, which currently has no cosponsors, has been referred to the House Committee on Oversight and Government Reform.

Labels: FCPA

On Monday, U.S. District Court Judge Henry E. Hudson sentenced Charles Paul Edward Jumet to more than seven years in prison after pleading guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and making a false statement to federal agents.

The 87 month sentence is the longest prison term imposed against an individual for violating the FCPA. In addition to the prison term, the defendant was ordered to pay a $15,000 fine and to serve three years of supervised release following release from prison.

According to the Justice Department, Jumet and others conspired to pay money secretly to Panamanian government officials in exchange for awarding contracts to Ports Engineering Consultants Corporation (PECC) to maintain lighthouses and buoys along Panama’s waterway. The Panamanian government ultimately awarded PECC a no-bid 20-year concession.

After the contract was awarded, Jumet admitted that he and others authorized corrupt payments to be made to the Panamanian government officials. Jumet and others paid more than $200,000 to the former administrator and the former deputy administrator of the Panama Maritime Authority and to a former high-ranking elected executive official of the Republic of Panama.

Jumet also made a false statement to federal agents about a "dividend" check payable to the bearer in the amount of $18,000 that was endorsed and deposited into an account belonging to the high-ranking elected Panamanian government official. Jumet falsely claimed that this "dividend" check was a donation for the high-ranking elected official’s re-election campaign, when, in fact, Jumet admitted it was given to the elected Panamanian government official as a corrupt payment for allowing PECC to receive the contract.

In a related case, John Warwick pleaded guilty on Feb. 13, 2010, for his role in the same conspiracy to violate the FCPA. He is scheduled to be sentenced by Judge Hudson on May 14, 2010.

Labels: FCPA

Despite the snow in the Washington, DC area, the blizzard of FCPA prosectutions continues.

Today, John W. Warwick pleaded guilty before U.S. District Court Judge Henry E. Hudson in Richmond, Virginia., to a one-count indictment charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act

According to the indictment issued on December 15, 2009, PECC, a company incorporated under the laws of Panama, was affiliated with an engineering firm based in Virginia Beach. According to the indictment, PECC was created so that Warwick, co-conspirator Charles Jumet, an the engineering firm could obtain certain maritime contracts from the Panamanian government.

According to the Justice Department, Warwick and Jumet participated in a conspiracy to pay money secretly to Panamanian government officials for awarding contracts to PECC to maintain lighthouses and buoy in Panama. In December 1997, the Panamanian government awarded PECC a no-bid, 20-year concession to perform these duties. Upon receipt of the concession, Warwick, Jumet, and others authorized payments to be made to the Panamanian government officials.

In connection with his guilty plea, Warwick admitted that at least from 1997 through approximately July 2003, he, Jumet and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of the Panama Maritime Authority and to a former, high-ranking elected executive official of the Republic of Panama.

As part of his plea agreement, Warwick agreed to forfeit $331,000,the proceeds of the contract. At sentencing, scheduled for May 14, 2010, Warwick faces a maximum of five years in prison and a fine of the greater of $250,000 or twice the gain.

Jumet pleaded guilty on Nov. 13, 2009, to a two-count criminal information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for PECC, in violation of the FCPA, and making a false statement. Jumet is scheduled to be sentenced on March 26, 2010.

Labels: FCPA

The Justice Department announced today that 22 executives and employees of companies in the military and law enforcement products industry have been indicted and arrested in the largest single investigation and prosecution against individuals in the history of the enforcement of the U.S. Foreign Corrupt Practices Act (FCPA).

Twenty one of the defendants were arrested in Las Vegas yesterday and one defendant was arrested in Miami. In addition, approximately 150 FBI agents executed 14 search warrants in locations across the U.S. In addition, the United Kingdom’s City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments.

The defendants arrested in Las Vegas were there because they were attending the annual Shooting, Hunting, Outdoor Trade Show and Conference, known as the SHOT Show, the largest trade show of its kind. 

According to the Justice Department, the indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa. In fact, the scheme was part of the undercover operation, with no actual involvement from any minister of defense. As part of the undercover operation, the defendants allegedly agreed to pay a 20 percent "commission" to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country’s presidential guard. In reality, the "sales agent" was an undercover FBI agent.

The defendants were told that half of that "commission" would be paid directly to the minister of defense. The defendants allegedly agreed to create two price quotations in connection with the deals, with one quote representing the true cost of the goods and the second quote representing the true cost, plus the 20 percent "commission." The defendants also allegedly agreed to engage in a small "test" deal to show the minister of defense that he would personally receive the 10 percent bribe.

Each of the indictments allege that the defendants conspired to violate the FCPA, conspired to engage in money laundering, and engaged in substantive violations of the FCPA. The indictments also seek criminal forfeiture of the defendants’ ill gotten gains.

The maximum prison sentence for the conspiracy count and for each FCPA count is five years. The maximum sentence for the money laundering conspiracy charge is 20 years in prison.

A list of the persons named in the indictments are included in the press release.

Labels: FCPA

In connection with the marking of December 9th as International Anti-Corruption Day (see previous post) and the 10th Anniversary of the Entry into Force of the Organization of Economic Cooperation and Development (OECD) Anti-Bribery Convention, the OECD held a program yesterday in Geneva, Switzerland on anti-bribery efforts that included some high level speeches by a number of U.S. officials, including Secretary of State Clinton and Commerce Department Locke.

One of the main features of the program was the release of the OECD’s new Recommendation for Further Combating Bribery of Foreign Public Officials which, among other things, recommends that OECD member countries prohibit or discourage the use of small facilitation payments.

Specifically, the OECD recommendation is as follows:

RECOMMENDS, in view of the corrosive effect of small facilitation payments, particularly on sustainable economic development and the rule of law that Member countries should:

i. undertake to periodically review their policies and approach on small facilitation payments in order to effectively combat the phenomenon;

ii. encourage companies to prohibit or discourage the use of small facilitation payments in internal company controls, ethics and compliance programmes or measures, recognising that such payments are generally illegal in the countries where they are made, and must in all cases be accurately accounted for in such companies’ books and financial records.

URGES all countries to raise awareness of their public officials on their domestic bribery and solicitation laws with a view to stopping the solicitation and acceptance of small facilitation payments.

Of course, this is only a recommendation and any changes in law must be implemented by OECD member countries. Nevertheless, this OECD statement is an important one and it will be interesting to see how the U.S. Government will react to this recommendation. At a minimum, it reaffirms the position that companies must closely review their policies regarding facilitating payments.

Some of the other OECD recommendations include:

• Ensuring companies cannot avoid sanctions by using agents and intermediaries to bribe for them;
• Improve co-operation between countries on foreign bribery investigations and the seizure, confiscation and recovery of the proceeds of transnational bribery;
• Provide effective channels for reporting foreign bribery to law enforcement authorities and for protecting whistleblowers from retaliation; and
• Working more closely with the private sector to adopt more stringent internal controls, ethics and compliance programs and measures to prevent and detect bribery.

Secretary Clinton’s remarks made at the OECD program can be found here.

Secretary Locke’s remarks can be found here.

Labels: FCPA

Today, December 9th, marks International Anti-Corruption Day. The theme of this year's International Anti-Corruption Day is "Don't let corruption kill development."

In order to promote the United Nations' anti-corruption campaign, the U.N.'s Office of Drugs and Crime (UNODC) has produced the following 60 second video that promotes the power to say no when confronted with bribery.

In addition, Dow Jones today released a State of Anti-Corruption Compliance Survey that found more than half of all companies are delaying or abandoning key business initiatives as executives struggle to both interpret a patch-work of anti-corruption regulations and collect the information they need to confidently assess corruption risk.

U.N. Secretary-General Ban Ki-moon's message to mark International Anti-Corruption Day 2009 is below:

Labels: FCPA, United Nations

Transparency International today released its annual 2009 Corruption Perceptions Index (CPI) that measures the perceived levels of public-sector corruption in countries. The 2009 CPI scores 180 countries on a scale from zero (highly corrupt) to ten (highly clean) using 13 sources from 10 independent
institutions. All sources measure the overall extent of corruption (frequency and/or size of bribes) in the public and political sectors of numerous countries.

Transparency International's CPI is a very useful tool for determining the extent and risk of corruption in countries where companies conduct business.

Highest scorers in the 2009 CPI are New Zealand at 9.4, Denmark at 9.3, Singapore and Sweden tied at 9.2 and Switzerland at 9.0. These scores reflect political stability, long-established conflict of interest regulations and solid, functioning public institutions.

Japan and the United Kingdom are both ranked 17th (7.7) and the United States is ranked 19th (7.5)

Not surprisingly, fragile, unstable countries that have been scarred by war and ongoing conflict linger at the bottom of the index. These countries include: Somalia, ranked 180th with a score of 1.1, Afghanistan at 1.3, Myanmar at 1.4 and Sudan tied with Iraq at 1.5. Nigeria is ranked 130th with a score of 2.5.

The vast majority of the 180 countries included in the 2009 CPI scored below five.

Countries experiencing significant declines in their CPI score from 2008 to 2009 were Bahrain, Greece, Iran, Malaysia, Malta and Slovakia.

Countries that improved their CPI scores from 2008 to 2009 were Bangladesh, Belarus, Guatemala, Lithuania, Moldova, Montenegro, Poland, Syria and Tonga.

According to Transparency International:

Overall results in the 2009 index are of great concern because corruption continues to lurk where opacity rules, where institutions still need strengthening and where governments have not implemented anti-corruption legal frameworks.

Even industrialized countries cannot be complacent: the supply of bribery and the facilitation of corruption often involve businesses based in their countries. Financial secrecy jurisdictions, linked to many countries that top the CPI, severely undermine efforts to tackle corruption and recover stolen assets.

A table showing the complete list of scores of each country included in the 2009 CPI can be found here.

An interactive map showing the scores of each country included in the 2009 CPI can be found here.

Transparency International is a non-partisan network of more than 90 locally established national chapters aimed at fighting corruption by bringing together relevant players from government, civil society, business and the media to promote transparency in elections, in public administration, in procurement and in business.

Labels: FCPA

The United Nations Development Program (UNDP) and the United Nations Office on Drugs and Crime (UNODC) today launched a joint 2009 campaign to raise awareness on how corruption adversely impacts development.

The launch of this anti-corruption campaign was timed to coincide with the third session of the Conference of State Parties to the U.N. Convention against Corruption in Doha, Qatar from November 9-13. The Convention against Corruption has been ratified by over two-thirds of the 192 State Members of the U.N. since its entered force in 2005.

Through a series of posters, brochures and other material, the new campaign highlights how corruption obstructs access to education, health and justice, limiting their opportunity to prosper and undermining democracy.

The 2009 campaign is a follow-up to the UN's widely praised "Your No Counts" campaign.

Labels: FCPA

The Justice Department issued a press release today regarding Friday's conviction of two Los Angeles-area film executives in a closely watched criminal case involving the U.S. Foreign Corrupt Practices Act (FCPA).

After a two and a half week jury trial in the Central District of California Courthouse in Los Angeles, Gerald Green and Patricia Green were found guilty of conspiracy and substantive violations of the FCPA and U.S. money laundering laws in relation to an alleged bribery scheme that enabled the defendants to obtain a series of Thai government contracts, including contracts to manage and operate the annual Bangkok International Film Festival.

Patricia Green was also found guilty of falsely subscribing U.S. income tax returns in connection with this scheme.

Mr. and Mrs. Green, who were charged and arrested in December 2007, owned and operated Film Festival Management, a Los Angeles-based business that was created to bid for the management contract for the annual Bangkok International Film Festival. In January 2008 they were indicted by a federal grand jury in Los Angeles on one count of conspiracy to bribe a foreign public official in violation of the FCPA and six substantive counts of violating the FCPA.

Earlier this year, the Greens were charged in a second superseding indictment with 21 counts, including conspiracy to violate the FCPA, conspiracy to violate U.S. anti-money laundering laws, eight substantive counts of violating the FCPA, seven counts of violating anti-money laundering laws, one count of obstruction of justice and two counts of making a false statement on a U.S. Income Tax Return.

According to the superseding indictment, the Greens paid approximately $1.8 million in bribes to the former TAT governor through numerous bank accounts in Singapore, the United Kingdom and the Isle of Jersey in the name of the former governor’s daughter and a friend of the former governor. The contracts received by the Greens resulted in more than $13.5 million in revenue to businesses they owned. Evidence introduced at trial showed that beginning in 2002 and continuing into 2007, the Greens conspired with others to bribe the former governor of the TAT in order to get the film festival contracts as well as other TAT contracts. As a result of the then governor’s position at the TAT, the former governor was able to influence the awarding of these contracts.

Trial evidence also showed that the Greens used different business entities, some with fake business addresses and telephone numbers, in their dealings with the TAT in order to hide the money the Greens were being paid under the contracts. Trial evidence also showed that the Greens disguised the payments as "sales commission" payments and made the payments for the benefit of the former governor through the foreign bank accounts of intermediaries, including bank accounts in the name of the former governor’s daughter and friend.

The conspiracy and FCPA charges each carry a maximum penalty of five years in prison, and each of the money laundering counts carries a maximum penalty of up to 20 years in prison. The false subscription of a U.S. income tax return carries a maximum penalty of three years in prison and a fine of not more than $100,000.

Sentencing has been set for Dec. 17, 2009.

Labels: FCPA

The Organization of Economic Cooperation and Development's (OECD) Working Group on Bribery recently issued a report (pdf) (the "Phase 2bis" report) addressing Turkey's progress in complying with the OECD Anti-Bribery Convention.

The report examined Turkey's progress in the following areas: (1) investigating and prosecuting allegations of bribing foreign public officials; (2) re-instating the liability of legal persons; and (3) awareness-raising by the Turkish Government.

The report noted that Turkey has taken "important steps" to address recommendations from the Working Group, including:

• Two foreign bribery cases are currently under investigation, and Turkish officials have recently increased their efforts to gather information about allegations against Turkish companies in the 2005 Final Report of the Independent Inquiry Committee in the UN Oil-for-Food Programme.
  
• A draft law re-introducing corporate liability for foreign bribery is currently under consideration by the Turkish Parliament.
  
• Turkey has implemented a wide range of awareness-raising efforts, which appear to have significantly raised awareness in the business community about the prohibition against bribing foreign public officials in the Turkish Penal Code.

Despite this progress the OECD Working Group's noted that it remains concerned that Turkey continues to be in non-compliance with Article 2 of the Anti-Bribery Convention as long as companies are not liable for foreign bribery and recommended that Turkey urgently adopt the draft law on corporate liability.

The Working Group also recommended a peer review analysis of the new law on corporate liability once it is enacted and a further assessment of progress on foreign bribery investigations and prosecutions in December 2009.

Labels: FCPA

In the first Foreign Corrupt Practices Act (FCPA) involving Vietnam, the Justice Department announced yesterday that Joseph T. Lukas, a former executive of Philadelphia-based Nexus Technologies Inc. pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA in connection with his role in a scheme to pay bribes to Government of Vietnam officials in exchange for contracts to supply equipment and technology to Vietnamese government agencies.

Mr. Lukas was arrested on September 5, 2008, after being indicted by a federal grand jury in Philadelphia. Also indicted in this case was Nexus Technologies and three alleged co-conspirators. Cases are still pending against the remaining defendants and the company.

Nexus Technologies Inc. is a Delaware company with offices in Philadelphia, New Jersey and Vietnam that allegedly purchased a wide variety of equipment and technology, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems, for export to agencies of the government of Vietnam. The indictment alleged that from approximately 1999 through 2008, the defendants engaged in a conspiracy to pay Vietnamese government officials bribes in order to secure lucrative contracts. Over the course of the scheme, the defendants are alleged to have paid at least $150,000 in bribes to foreign officials in Vietnam. The customers in Vietnam are alleged to have included the commercial branches of Vietnam's Ministries of Transport, Industry and Public Safety.

In connection with his guilty plea, Mr. Lukas admitted that from 1999 to 2005, he and other employees of Nexus Technologies Inc. agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the agencies for which the officials worked. The bribes were falsely described as "commissions" in the company’s records.

Mr. Lukas faces a maximum prison sentence of 10 years in prison and a $350,000 fine when he is sentenced in April 2010.

Labels: FCPA, Vietnam

The Justice Department announced today that Latin Node Inc. (Latinode), a privately held Florida telecommunications company, pleaded guilty today to a one-count information charging that the company violated the Foreign Corrupt Practices Act's anti-bribery provisions. As part of the plea agreement, Latinode agreed to pay a $2 million fine over a three-year period.

Latinode is a provider of wholesale telecommunications services using Internet protocol technology countries throughout the world, including Honduras and Yemen. Latinode admitted that from approximately March 2004 through June 2007, it paid approximately $1,099,889 in payments to third parties, knowing that some or all of those funds would be passed on as bribes to officials of Hondutel, the Honduran state-owned telecommunications company.

In addition, from in 2005 and 2006, Latinode allegedly made 17 payments totaling approximately $1,150,654 either directly to Yemeni officials or to a third-party consultant with the knowledge that some or all of the money would be passed on to Yemeni officials in exchange for favorable interconnection rates in Yemen. Each of those payments was made from Latinode’s Miami bank account. According to court documents, company e-mails indicate that the intended payment recipients included, but were not limited to, the son of the Yemeni president; the vice president of operations at TeleYemen, the Yemeni government-owned telecommunications company; other officials of TeleYemen; and officials from the Yemeni Ministry of Telecommunications.

Latinode’s parent company, eLandia International Inc., voluntarily disclosed the potential FCPA violations to the Justice Department after it acquired Latinode.

Labels: FCPA

Black Money, a FRONTLINE documentary on international bribery, will air Tuesday, April 7, 2009, at 9 P.M. EDT on PBS. The documentary investigates the shadowy side of international business, shedding light on multinational companies that have routinely made secret payments—often referred to as “black money”—to win business. Click here for a preview of the show.

Black Money includes interviews with current and former prosecutors involved in several high profile anti-bribery cases.

FRONTLINE has also been presenting a series of related stories on international bribery cases on its FRONTLINE/WORLD site. The The Business of Bribes site contains news and interviews with middlemen, prosecutors and whistleblowers, detailing the stories behind some of the largest bribery investigations in history.

Labels: FCPA

Israel recently became the 38th signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which entered into force on February 15, 1999, provides a broad definition of bribery and requires countries to pass anti-bribery laws and to impose sanctions for engaging in prohibited acts.

Labels: FCPA