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July FCPA Compliance Digest | Bonus: Global Anti-Corruption News

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July FCPA Compliance Digest | Bonus: Global Anti-Corruption News

July was a quiet month for FCPA compliance news. There were some rumors that the SEC and DOJ were in the process of revising A Resource Guide to the US Foreign Corrupt Practices Act, but unfortunately The FCPA Blog shut down those rumors with a detailed look at the “changes.” Luckily things are a little more active in the global anti-corruption arena, as Canada, India and Thailand all introduced new (or edited current) legislation that addresses corruption.

Mead Johnson to Pay $12M to Settle FCPA Violations

Mead Johnson Nutrition Co. agreed to pay $12M to settle allegations that it violated the FCPA. A Chinese unit of the company, which makes Enfamil baby formula, made improper payments to health-care professionals at state-owned hospitals so that they would recommend its formula to patients who were new or expectant mothers, according to the SEC. Under the settlement, Mead Johnson didn’t admit or deny the SEC’s findings and agreed to pay a $3M penalty, $7.7M in disgorgement and $1.26M in interest. An SEC probe found the company made the payments through a “distributor allowance” fund to third-party distributors who market, sell and distribute its products in China. Mead Johnson didn’t accurately book more than $2M paid over a 5-year period, the SEC said. “Mead Johnson Nutrition’s lax internal control environment enabled its subsidiary to use off-the-books slush funds to pay doctors and other health-care professionals in China to recommend its baby formula and give the company marketing access to mothers,” said Kara Brockmeyer, chief of the SEC’s anti-foreign bribery unit.

Global Anti-Corruption News

India Introduces Stand Alone Bill on Bribery of Foreign Officials

India’s Parliament has introduced a Bill that makes accepting or giving bribes by foreign public officials a criminal offense punishable by imprisonment of up to 7 years. The Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2011, lapsed in May of last year. The legislation will be a standalone law to deal with bribery by foreign public officials, which is currently not covered under any domestic anti-corruption laws in India. The 2011 version of the Bill has provision to punish both bribe taker and giver. It also allows the government to enter into agreements with other countries or contracting states for investigations and enforcement. The government will also give notices for consideration of the Whistleblowers Protection (Amendment) Bill, 2015 and Prevention of Corruption (Amendment) Bill, 2013, which are pending in Rajya Sabha.

Thailand Amends Anti-Corruption Law to Focus on Foreign Officials

Thailand published Amendment No. 3 to its Anti-Corruption Law to comply with international standards for prevention and suppression of corruption, which Thailand ratified under the treaty of the United Nations Convention against Corruption (UNCAC) in 2003. The amendment makes it an offense to accept or offer a bribe to state officials of both Thailand and foreign countries, and agencies of international organizations. And it’s got some teeth. Here are the significant offenses and punishments:

  • Officials who have demanded, accepted, or agreed to accept assets or other benefits for themselves or others, in order to do, or refrain from doing, anything in functions, whether it is legitimate or not, will get a maximum of life imprisonment or death.
  • Any person who has dishonestly, wrongfully, or by personal influence, demanded, accepted, or agreed to accept assets or other benefits in order to persuade Officials to do, or refrain from doing, anything in functions, whether beneficial or harmful for any person, will receive a maximum of 5 years imprisonment.
  • Any person who has given, offered, or agreed to give assets or other benefits to Officials in order to persuade them to do, delay, or refrain from doing, anything wrongfully, will receive a maximum of 5 years imprisonment.

The law also empowers the National Anti-Corruption Commission to investigate and file lawsuits with the courts against Officials of both Thailand and foreign countries, and agencies of international organizations, or any person from the private sector. Furthermore, the law will facilitate and accommodate cross-border investigations with international organizations to be in accordance with international anti corruption laws. The courts are also empowered to forfeit assets in corruption lawsuits based on the real value of assets received from the commission of offenses, by complying with the standards of forfeiture of assets.

Canada Revises Integrity Policy

The Canadian government has revised its integrity policy as to when companies can lose the right to bid on government contracts. The policy changes, approved by the Public Works and Government Services Canada, will reduce to 3 years from 10, the amount of time the agency will take into account when considering previous convictions. The new policy will no longer automatically hold a company responsible for the actions of one of its affiliates and also will reduce, to 5 years from 10, the time a company can be prohibited from bidding on a government contract if certain conditions are met. The previous policy was very strict and companies protested it, particularly the provision where a company could lose the right to government business because of an anti-corruption violation from an affiliate anywhere in the world.

A new wrinkle to the policy is the provision mandating that any company charged with an anti-corruption violation be subject to an 18-month debarment from competing for government contracts—even if they later wind up not being convicted of any wrongdoing. The new policy attempts to balance penalties with the need for the government to make sure taxpayer money is being spent with businesses that are ethical and compliant.

Next Steps: It’s Time for a Visit to Boston

It’s not often that compliance officers are given the opportunity to hear directly from someone with the perspective of Richard Bistrong. Richard’s career as an International Sales VP led to five years of covert US/UK law enforcement cooperation and finally, 14 months in a federal prison camp for violating the FCPA.
It’s even rarer to have the chance to hear Richard discuss his views on anti bribery compliance with Robert Appleton, the former US and UN prosecutor and former Head of a Special UN Anti-Corruption Investigations Task Force, but that’s exactly the opportunity you’ll have on September 17th in Boston.

Join us at the Wyndham Boston Beacon Hill to hear Bob’s and Richard’s candid thoughts and perspectives on why anti bribery programs fail and how compliance must evolve to successfully combat and address the real pressures faced by front-line employees working in what Richard calls “high-risk, low-integrity environments.” Register today and use their insights to improve the effectiveness of your anti bribery compliance program.

Compliance Meme

Since everybody’s on vacation instead of filling up my inbox with FCPA violations, you get two memes this month instead of just one. Happy Christmas in July, compliments of Compliance Week and The Network.
Source: Compliance Week’s Daily Compliance Meme on Twitter

Source: Compliance Week’s Daily Compliance Meme on Twitter

About the Author

Pia Adolphsen, Associate Manager of Marketing Content Strategy. Pia leads content strategy at The Network. Previously, she led client advocacy and marketing initiatives in the competitive intelligence industry. She is strongly in favor of lattes, 1.0mm pens, and her Georgia Bulldogs. Connect with Pia on LinkedIn

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