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Thomas Fox Contributing Editor

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Bill Waite Contributing Editor

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Entries in Ethical Corporation (3)

Thursday
Aug072008

Global Compliance Resources

U.K.-based Ethical Corporation magazine's 2008 anti-corruption special report (available for download here) includes a table we've found useful. It lists many currently active multilateral anti-corruption agreements and describes how they work. Some of the conventions and voluntary agreements will be familiar to most readers, while others will be new. Included are:

OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

United Nations Convention against Corruption (UNCAC)

Council of Europe Criminal Law Convention on Corruption

Extractive Industries Transparency Initiative (EITI)

Kimberley Process Certification Scheme

World Economic Forum Partnering Against Corruption Initiative (PACI)

United Nations Global Compact: Principle 10

International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery

As the commentary about the table says, "Most companies know that it is illegal to bribe public officials either at home or abroad, as international conventions from the Organisation for Economic Co-operation and Development and the Council of Europe, for example, make clear. But if there is one thing that these diverse antibribery mechanisms have in common, it is a shared weakness in policing. Beyond voicing their disapproval, there is little that international bodies such as the OECD or United Nations can do to make countries enforce bribery laws. . . But for companies seeking practical, hands-on advice about how to combat corruption, voluntary initiatives are good place to turn."

Thanks to Ethical Corporation for making this resource available to all.

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Wednesday
Apr162008

SFO Chief Calls For US-Style Reforms

U.K.-based Ethical Corporation magazine has just released its 2008 anti-corruption special report. The 22-page publication (available by request here) is packed with Foreign Corrupt Practices Act compliance advice, descriptions of best practices from GE and others, and lots of news and analysis about enforcement trends.

It's all great content from this first-class publisher and compliance-event organizer (they draw a staggering 75,000 visitors a week to their website). But what caught our eye is managing editor John Russell's interview with U.K. Serious Fraud Office director Robert Wardle, who leaves his post at the SFO on April 21.

Wardle was interviewed before the High Court ruled last week that his decision to stop an investigation into BAE over the Al-Yamamah arms deal with Saudi Arabia was unlawful. He was criticized for his role by the High Court, which said: "It is the failure of government and the defendant [Wardle] to bear that essential principle in mind that justifies the intervention of this court."

In the interview, Wardle makes it clear that the U.K.'s anti-corruption effort needs to be reformed before it can be effective. That's apparent, given that the Serious Fraud Office, the U.K. body that investigates and, where possible, prosecutes U.K. companies or indi­viduals for corruption, hasn't brought a single prosecution after more than ten years of the U.K. having been party to the OECD Convention on Combating Bribery of Foreign Public Officials. How should the U.K. reform its anti-corruption efforts? By being more like the United States and its Foreign Corrupt Practices Act, Wardle says.

"[T]he UK should further emulate the US," Wardle says, "by making use of plea-bargaining agreements, which grant suspects in corruption cases a reduced sentence in exchange for their co-operation. He believes that there should be a specific accounting rule prohibiting companies from taking steps to cover up suspicious trans­actions, like the books and records provision of the FCPA. He explains: 'We would benefit if companies knew it would be a specific criminal offence to conceal bribes.' Wardle would also like to see UK companies face greater liability for crimes committed by their employees. 'We should be looking at making a company responsible when a reasonably senior manager has been responsible for the offence or the payments,' he says."

Wardle ends his frustrating tenure at the SFO lamenting that U.K. companies still lack sufficient deterrents to bribing foreign public officials. He says: "One of the problems we have is that companies need to know that there is a price to be paid for corruption overseas."

Without doubt, American companies -- still waiting to see a level playing field for global anti-corruption enforcement -- will share Wardle's hope for long over-due reforms in the U.K.

Thursday
Mar062008

Europe Discovers The FCPA

John Russell, the managing editor of London-based Ethical Corporation magazine, has a nice article here about enforcement of the Foreign Corrupt Practices Act against European companies. This "new" FCPA compliance risk, the article says, is catching a lot of people by surprise. But it's today's reality, so get used to it.

Here's a sample from the article:

-- Lax enforcement of bribery laws to date could explain why European companies are ill-prepared to deal with FCPA liability. Energy companies and others at high-risk of bribery are starting to embed internal anti-corruption policies. But on the question of whether European companies are prepared for increased FCPA activity, [Simmons & Simmons solicitor-advocate Eoin] O’Shea, like his peers, is clear. “In general, they are not,” he says.

And this:

-- “It is fair to assume there will be a continued flow of new cases filed in 2008,” says Gibson, Dunn & Crutcher partner and FCPA lawyer Lee Dunst. US law enforcers see anti-graft as a particularly “target-rich environment for investigations”, he says, adding that recent corruption cases are just the tip of the iceberg of corporate wrongdoing. Assessing the readiness of European companies to deal with enhanced US regulatory zeal, Dunst says: “US companies are a little ahead of the game here compared to their European counterparts.”

And we add our two cents as well:

-- As long as Europe does not police its own companies, US regulators have a right to step in, argues Cassin Law founder Dick Cassin. He says: “They have to. Otherwise, US companies have a very legitimate complaint about being seriously disadvantaged by the FCPA – despite decades of assurance by the government to level the playing field.”

The article also sets out the growing list of European companies currently under FCPA investigation by U.S. authorities:

ABB (Switzerland, energy)
Alcatel Lucent (France, communications)
AstraZeneca (UK-Sweden, pharmaceuticals)
BAE Systems (UK, defence)
Daimler (Germany, automotive)
Innospec (UK, chemicals)
Magyar Telekom (Hungary, telecoms)
Norsk Hydro (Norway, energy)
Novo Nordisk (Denmark, health, pharmaceuticals)
Panalpina (Switzerland, transport)
Siemens (Germany, engineering, electronics)
Smith & Nephew (UK, medical devices)
Total (France, energy)

If you're not familiar with it, Ethical Corporation is an independent publisher and conference organizer launched in 2001 to "encourage debate and discussion on responsible business." With 20,000 subscribers to the magazine and 350,000 visitors a month to the website, they're making an impact.

The group's reach is evident from the list of 42 speakers (so far) who'll be part of its 2008 Anticorruption Summit USA in Chicago on April 16 and 17, 2008. The FCPA is sure to attract plenty of attention -- with speakers from BAE Systems, the FBI, Lockheed Martin, Trace International, Transparency International, the U.S. Department of Justice, the Securities and Exchange Commission, and lots more.