Frequently asked questions on anti bribery and corruption

Frequently Asked Questions in Anti-Bribery and Corruption Frequently Asked Questions in Anti-Bribery and Corruption David Lawler A John Wiley & Sons, Ltd., Publication This edition first published in 2012 Copyright ©2012 David Lawler Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com The rights of David Lawler to be identified as the author of this work have been asserted in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher Wiley publishes in a variety of print and electronic formats and by print-on-demand Some material included with standard print versions of this book may not be included in e-books or in print-on-demand If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com For more information about Wiley products, visit www.wiley.com Designations used by companies to distinguish their products are often claimed as trademarks All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners The publisher is not associated with any product or vendor mentioned in this book This publication is designed to provide accurate and authoritative information in regard to the subject matter covered It is sold on the understanding that the publisher is not engaged in rendering professional services If professional advice or other expert assistance is required, the services of a competent professional should be sought Library of Congress Cataloging-in-Publication Data is available ISBN: ISBN: ISBN: ISBN: ISBN: 978-1-119-97197-9 978-1-119-96057-7 978-1-118-40105-7 978-1-118-35981-5 978-1-119-96058-4 (pbk) (ebk) (custom pbk) (ebk) (ebk) A catalogue record for this book is available from the British Library Typeset in 9/10.5pt Cheltenham-Book by Laserwords Private Limited, Chennai, India Printed in Great Britain by TJ International, Padstow, Cornwall To Cathy and Harry for putting up with this, and me Contents About the Author Acknowledgements Bribery Acronyms and Terms, and a Quick Index xiii xv xvii Introduction 1 Timeline Who Pays Bribes? 19 What Are the Key Sets of Rules that Govern International Bribery? 69 Frequently Asked Questions 97 How Do I Set Up Proportionate Yet Effective Anti-Bribery Compliance Procedures? 343 How Do I Carry Out a Review to Detect and Deter Bribery? 405 Cautionary Tales – What Happens If You Get Caught? 433 What Are My Predictions for 2012 and Beyond? 455 Appendices 483 References 525 Get the Text of the Statutes on Your Smartphone from the Following QR Codes 545 Do I Need to Read this Book (Again)? 547 Index 549 552 Index compliance (continued) whistleblowing 402–3 see also internal controls compliance monitors 241, 259, 261–71, 380 compliance portals 398 compliance reviews 309, 311–12, 348, 352, 405–32 document review and e-disclosure 412–23 employee discipline 401 interviewing 409–12 key questions 406–7 logistics 408–9 post-acquisition 308 practical aspects 431–2 proportionality 429–31 reporting and evaluation 427–9 computer records 408, 409, 413–14, 431 see also emails concept analysis 421 conference expenses 377, 378, 500, 511, 512 confidentiality compliance reviews 412, 428 mergers and acquisitions 306 plea agreements 251 privilege 295–6, 298, 299 Section notices 316 whistleblowing 403 confiscation orders 208–9, 219, 227, 230–1, 233, 234, 252, 470 conflicts of interest 101 ‘conniving’ 169, 170, 345 ‘conscious avoidance’ 170, 171 consent 169, 345 conspiracy charges 214, 279–80 consultants 176, 369–73, 397 DOJ Opinion Procedure Releases 506, 516 Johnson & Johnson 521–2 public officials employed as 379–81 Siemens 436 ‘consulting fees’ 21 contractors 21–3, 155, 272–6 see also suppliers contracts 21–3, 339, 391–3 FCPA clauses 498 London 2012 Olympics 32 pre-FCPA 509 ‘red flags’ 336 sales agents and consultants 370–1, 372 Control Components, Inc 177–9, 460 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions see OECD Convention cooperation 203, 238, 246, 285 Dougall case 256–7 DPAs 240, 241–2 international prosecutors 472–4 Macmillan case 259 self-reporting 282, 283–4 tolling agreements 281 corporate hospitality see hospitality corporate liability see liability corrupt intent 77–8, 144, 145, 148, 186 Corrupt Practices Act (1695) corruption causes of 117–22 definitions of 98–100 types of 101–2 Corruption Act (1906) 39 Corruption Perceptions Index (CPI) 26–7, 28, 360 COSO model 367–8 costs disgorgement 222–5, 227 responding to investigation and prosecution 277–8 Coulson, Andy 67 country risk 25–9, 346, 360 Cressey, Donald 326 cricket 33, 38–9 Criminal Justice Act (1987) 124, 314–18 Criminal Justice Act (2008) 66 Criminal Law Act (1977) 67, 139, 140 criminal prosecutions China 130–1 criminal standard 468 France 128 Germany 128–9 Index international cooperation 472 Nigeria 131–2 Siemens case 437 statute of limitations 279–80 Switzerland 129 United Kingdom 125, 138–9, 230, 252–3, 280 United States 134, 135, 137 cronyism 101 cross-border data transfers 416–17 Crown Prosecution Service (CPS) 39, 124, 127, 249 culpability score 216–17, 218 cultural context 111–12, 120, 403 custodians 410, 412 customs 75, 76, 77, 383–4, 440–5 Czech Republic 28, 29 Daily Mirror 60 Daimler 131, 278, 434, 470, 480 data analysis 408, 425–6 data collection 408, 409, 413–16, 425, 475, 476 data mining 339, 361, 407, 426 data privacy and protection 310, 415–17 Data Protection Act (1998) 64 Davydenko, Nikolay 44 DePuy 229, 258, 262 debarment 142, 149, 209, 258–9, 272–6, 284 Debevoise 277 defences adequate procedures 92, 146, 147, 150, 158, 344–5, 461 FCPA 145, 148 foreign written law 89 deferred prosecution agreements (DPAs) 12, 238, 239–42, 253, 257, 270 compliance monitors 261–4, 266–7 compliance procedures 350 debarment 274 Novo Nordisk 451 privilege 301 sentencing credit 282, 324 SSI 459 tolling agreements 281 553 Delaware Corporation 501 DeLay, Tom 48–9 ‘deliberate ignorance’ 170, 171 delivery notes 340 Denmark 28 Department of Justice (DOJ) audit rights 393 charges 204 compliance monitors 262–7 conspiracy charges 280 disgorgement 220 facilitation payments 193 fines 202, 203, 214, 220 foreign consultants 176 forfeiture of assets 205–6 Green case 207 ‘gun sting’ case 179 Halliburton’s due diligence plan 306–7 Innospec 255, 256 instrumentalities 177 jurisdiction 159, 160 money laundering laws 458 non-executive directors 172 Novo Nordisk case 451 ‘offset’ scenarios 90 Oil-for-Food Programme 450 Opinion Procedure Releases 90, 197–8, 377, 498–517 Panalpina case 443–4 plea agreements 144 prosecution of the FCPA 12, 15, 123–4, 150, 461, 464–70 public officials 380 restitution 234–5 SEC comparison 134–7 sector-specific investigations 29–30 self-monitoring 270 self-reporting 287 sentencing credit 324 settlements 238, 239–40, 244–6, 350 Siemens case 203, 436 Statoil case 154 tolling agreements 281 travel and trips 377 TSKJ Consortium case 439 deterrence 1, 326–30, 357 Deutsche Bahn 129 554 Index developing countries 105–6, 108, 118, 185, 196 Diack, Lamine 41 Diagnostic Products Corporation, Inc (DPC) 177, 204 diplomats 120 directors due diligence on business partners 388, 389 foreign 505 personal liability 172, 284, 345 shareholder actions 478 top-level commitment 353 disclosure 245, 251, 312 see also privilege; reporting discovery of bribery 309–13 discretion 117, 121 disgorgement 125, 219–32, 233, 242 Alcatel-Lucent 267 cancellation of contract 393 Novo Nordisk 451 Panalpina 137 SFO prosecutions 475 Siemens 436 TSKJ Consortium 439 dispute resolution 264, 393 documents compliance reviews 407–8, 412–23 discovery of bribery 310–11 kickback fraud 340 missing 335 privilege 294–5, 298, 299–301, 302, 318 Section notices 314–18 written policies 395–8 see also record-keeping Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) 319, 320–3, 344, 402, 465, 466 donations, political 46–50, 348, 360, 364, 381–2 double jeopardy 473–4 Dougall, Robert 254, 256–7 Dow Chemical Co 478 Dowler, Milly 67 due diligence 336, 347, 498, 510, 511 acquisitions 304, 305–7, 513, 514 amnesty for FCPA violations 514 business partners 361, 385–95 charitable contributions 382 Johnson & Johnson 521–2 sales agents 372 vendors 464 Dunn, Patricia 65–6 Duross, Chuck 261 duties, adequate segregation of 364–6 duty payable 384 e-disclosure 407, 413–14, 423 earnings before tax depreciation and amortization (EBITDA) 219, 223–4 economic factors 118 economic growth 103, 104, 106, 108, 119 Egypt 420 Electronic Disclosure Reference Model (EDRM) 423 electronic transfers 21, 392 emails 408, 419, 420, 422, 430 embezzlement 101 employees accountability 400–1 client’s children or relatives 381 codes of conduct 396–7 communication with 349, 397–8 computer imaging 431 corporate liability 157, 158 due diligence on business partners 388, 389 ethical metrics on performance reviews 353, 401 foreign subsidiaries 160 instrumentalities 176–7 joint ventures 164, 166 kickbacks from suppliers 337–41 privilege 300 reimbursement of expenses 384 running for public office 498 segregation of duties 364–6 state-owned enterprises 177, 180 training programmes 398–400 wrongful termination 480 see also managers; whistleblowers endorsements 58 Index enforcement 2, 123–33, 150 contributions to foreign 511 DOJ/SEC comparison 134–7 international cooperation 472–4 United Kingdom 138–43 United States 464–8 see also civil prosecutions; criminal prosecutions; penalties ENI 434, 438 entertainment 21, 22, 335, 373–6, 392 DOJ Opinion Procedure Releases 499, 501, 502 Lucent Technologies 80 environmental cleanup 508 Epic Records 62 equipment, used or counterfeit 23 Ericsson 129 Estonia 29 ethical issues 108–9, 353, 354 Eurojust 129 European Union (EU) 272, 275–6, 417 events and functions 374–5 evidence 297, 302, 310–11 accounting systems 408 Hague Evidence Convention 416 international cooperation 472 Section notices 315 see also documents exemptions 183–7 expected values 222 expenses 23, 375–6 DOJ Opinion Procedure Releases 499, 500–3, 505, 507, 511, 512, 514 reimbursement into bank accounts 384 export bans 274–5 Expro 306–7 extortion 101, 183, 184, 185–6, 339–40 codes of conduct 396 facilitation payments 194, 196 facilitation payments 1–2, 20, 24–5, 191–6, 410 Bribery Act 141, 146, 148, 193–5, 348 555 FCPA 10, 145, 146–7, 148, 183, 185–6, 191–3, 195, 333 freight forwarding 383 money laundering 289 OECD Convention 93, 94, 195–6 record-keeping 333–4 refusal to pay 188 risk assessment 358 stopping payments 189 failure to prevent bribery 16, 81, 90–2, 141, 155, 344, 489–90 Fallon, Kieren 35 False Claims Act (1863) 320, 322 family and spouses 374, 377, 378, 381 fashion journalism 55, 56, 57 Federal Acquisition Regulations 273 Federal Bureau of Investigation (FBI) 452–3, 464 Federal Sentencing Guidelines 150, 200, 202, 406 calculation of fines 214–16 compliance procedures 309, 346, 348–50 direct reporting structure for CCOs 356 Federal Trade Commission (FTC) 58, 59, 68 FIFA 40, 41–2, 44–5 Filip Principles 244, 245, 283–4, 301–2, 401 financial analytics 475–7 Financial Conduct Authority 126 financial journalism 60 financial reporting orders (FROs) 209, 212–13 Financial Services Authority (FSA) 60, 123, 125–6, 162 finder’s fees 500, 504 fines 80, 233–7, 434, 465 Alcatel-Lucent 267 BAE Systems 274–5, 447 ‘Bonny Island’ scheme 132, 439 Bribery Act 149, 208 CCI 460 disgorgement 220, 229 DPAs 241, 242 FCPA 71, 124, 134, 149, 200–3, 214–18 FSA 125, 126 556 Index fines (continued) Innospec 255, 256 Mabey & Johnson 140 Micrus Corporation 380 Novo Nordisk 451 self-reporting impact on 285–6 Siemens 344, 436 SSI 459 Statoil 154 Vetco 443 Finland 28–9 Fisman, Raymond 119, 120 football 33, 37–8, 40–2, 43, 44–5 Foreign Corrupt Practices Act (1977) (FCPA) 2–4, 70–1 accounting provisions 73–4, 78–81, 134–5, 145, 149, 167–8, 201, 331, 450–1, 469, 486–7 amendments to 10, 11–12, 153 amnesty for violations 514 anti-bribery provisions 73–8, 134, 135, 145, 201, 484–6 Bribery Act comparison 144–50 calls for modification of 461–2 civil litigation 477–8 compliance monitors 261, 265 concern from businesses about 141 conspiracy charges 279–80 contract clauses 498 debarment 273, 274 disgorgement 219, 226 DOJ Opinion Procedure Releases 197–8 DOJ/SEC comparison 134–7 enforcement 123–4, 464–8 exemptions 183–7 facilitation payments 10, 24, 183, 185–6, 191–3, 195, 333 foreign officials 144–5, 175–9, 376, 457 gaps 456 Halliburton’s due diligence plan 307 investigation of problems 312 Johnson & Johnson case 350, 518, 520, 522, 523 jurisdiction 151–4 lobbying 48 Novo Nordisk case 451 Oil-for-Food Programme 450 Panalpina case 443–4 passing of 9–10 penalties 200–7, 214–18, 233–4, 466, 467–8 personal liability 169, 170–1 pre-FCPA contracts 509 ‘respondeat superior’ doctrine 157–8 sector-specific investigations 29–30 settlements 238, 244 Siemens case 437 SSI case 459 subsidiaries 158–61 Travel Act 460 foreign court-appointed administrators 513 foreign officials 175–82 on board of foreign partner 499 Bribery Act 88–90, 154–5 compliance reviews 410 facilitation payments 333 FCPA 144–5, 147, 153, 175–9, 457, 484–5 finder’s fees 500 hiring 515 hospitality and entertainment 376 joint ventures 510 legislators 504 OECD Convention 494 payment for environmental cleanup 508 risk assessment 362 subcontractors 464 travel 377–8 see also public officials foreign subsidiaries 160–1 forensic accountants 339, 355, 361, 409, 424–7, 428, 432 forensic imaging 414 forfeiture 205–6, 212 formula for corruption 117, 121 Forsyth, Charles 140 France 28–9, 51 Alcatel-Lucent case 267 enforcement 128 privilege 299 Index synonyms for bribery 420 whistleblowing 403 fraud 23, 127 see also kickbacks; wire fraud freight forwarding 336, 383–4, 410, 440–5 front companies 22–3, 370, 371, 449, 464 Fu, Monty 160 gains 219–28, 466 Gambling Act (2005) 39 Germany 28, 128–9, 299 Ghana 105 gifts 111–14, 335, 369, 378–9, 392 Bribery Act Guidance 348 contract-related bribery 21 DOJ Opinion Procedure Releases 499 event tickets 375 forensic accounting 427 Johnson & Johnson 518–19 journalists 56 payola 61 Giuliani, Rudy 328 Gledhill, Richard 140 Global Integrity index 27 Global Witness 142 GlobalSantaFe Corp 77, 444 Gold, David 265 golf 33 Goodman, Clive 66–7 Google 421 government subsidies 118 ‘grand bribery’ 20, 21–3 ‘grand corruption’ grease payments see facilitation payments Greece 28, 29 Green, Gerald and Patricia 206–7 Grindler memo 264 group dynamics 329 guidance 2–3, 197–9 codes of conduct 396 compliance procedures 350–1 high-risk transactions 368–9 see also Bribery Act Guidance Guidelines on Plea Discussions in Cases of Serious or Complex Fraud (2009) 249–50, 255 557 ‘gun sting’ case 179, 435, 452–3 Gupta, Vinod 172 hacking 64, 65 Hague Evidence Convention 416 Haiti Teleco 458 Halliburton 131–2, 229, 272, 280, 306–7, 434, 438 Havelange, Joao 41 Hayatou, Issa 41 heads of state 502 Heath, Nigel 139 Helmerich & Payne 270 Hewlett-Packard 65–6 Higgins, John 34–5 high-risk sectors 30–1, 346, 360–1 high-risk transactions 22, 368–85, 426–7, 475–6 Hinchey, Bruce 285–6 Hipwell, James 60 HM Revenue and Customs 126, 302 Holder, Eric 466–7 Holder Memo 244 holidays 21, 22, 42 Honest Leadership and Open Government Act (2007) 48 Hong Kong 33–4 horse racing 33, 35, 36 hospitality 111, 114, 373–6 Bribery Act Guidance 348 company risk 360 Johnson & Johnson 518–19 misinformation about Bribery Act 141–2 House of Lords 53–4 Hungary 28, 29 Huntington, Samuel 103 illegal gratuity 51 Immucor 478–9 impartiality, breach of 83, 87, 111, 115 import licences/permits 118 imprisonment 77, 149, 201, 249, 467 Bribery Act 208 Green case 206 Jumet 202 pre-Bribery Act 139, 140 SCPO breaches 212 Tesler 440 558 Index ‘improper performance’ 82–7, 89, 148 incentives 401, 402 see also ‘bounties’ incremental revenue 221, 222 India 28, 29, 33–4, 38, 121, 420 indictments 135, 204 influence 101–2 InfoGroup, Inc 172 injunctions 135 Innospec 229, 231, 252, 254–6, 269 inside information 36 Instituto Constarricense de Electricidad (ICE) 235 instrumentalities 176–7, 178–9 insurance 116, 126, 312 intermediaries 94, 361, 385, 386, 436, 521–2 see also agents internal controls 80, 145, 146, 149, 352, 362–403, 406 accounting 331–2 compliance monitors 262, 267 DPAs 350 facilitation payments 195 objectives of 363 parent companies 168 Siemens case 435–6, 437 Internal Revenue Service (IRS) 228 International Anti-bribery and Fair Competition Act (1998) 72 international cooperation 472–4 International Country Risk Guide 26 international law 12–13 International Olympic Committee 32, 36, 41, 176 International Sport and Leisure (ISL) 40–1 Internet 33–4, 44, 58–9 interviews 311, 407, 409–12, 430, 431 inventories 340, 341, 365 investigations compliance reviews comparison 413 discovery of bribery 309–10, 312–13 kickbacks to employees 338–40 sector-specific 29–30 see also enforcement invoices 336, 339, 340, 365 agents 373, 393 freight forwarding 383, 384 Iowa Beef Packers 500 ipaidabribe.com 121 Iraq 140, 236, 254–5, 448–52, 456, 479–81 Ireland 29 Isle of Man 156 Israel 29 issuers 78, 134, 136, 145, 149, 312 FCPA jurisdiction 152–3, 154 parent companies 167 Italy 28, 120 Japan 28–9, 33–4, 403 JAS Gripen 129 JGC Corp 132, 434, 435, 438–40 job-shares 366 Johnson & Johnson 30, 131, 229, 256–7, 434 DPA 270, 324, 350 enhanced compliance undertakings 518–23 joint ventures 164, 165–6, 167, 268 business partnership risk 361 DOJ Opinion Procedure Releases 509, 510 due diligence 347, 386, 388 foreign directors 505 Johnson & Johnson 521–2 TSKJ Consortium 438–40 journalists 55–68, 514 bloggers and 58–9 codes 57–8 financial 60 freebies 56–7 unlawfully obtained information 63–8 judging in sport 36–7 judicial corruption 104 Jumet, Charles 202, 467 jurisdictional issues 151–6, 159, 160, 280, 473–4 Katy Industries 10 Kay, David 74, 76–7 KBR 280, 434, 435, 438–40 keyword searching 418–21 Index kickbacks 21–3, 101, 105, 337–41 consultants 371 developing countries 185 FIFA World Cup committee 42 Oil-for-Food Programme 449–51, 479 refusal to pay 188 Kleptocracy Asset Recovery Initiative 458 knowledge of bribery 170–1 Koehler, Mike 461 Kozeny, Viktor 171, 184, 457 language issues 403, 419–20, 432 Lantana 504 large companies 346, 394 late payment fees 23 lawyers 291, 355, 386, 391 compliance reviews 409, 411, 428 duty to report 289 early instruction of 310 foreign law firms 512 ineligibility for SEC awards 322 privilege 294–302 whistleblowers 465 Le Gougne, Marie-Reine 36 Le Tissier, Matt 37–8 legal advice privilege 296, 300 legal professional privilege (LPP) 296, 298, 316 liability 157–66, 249, 461 accounting violations 167–8 Bribery Act 90–2, 146, 147, 155 Expro 307 FCPA jurisdiction 152–3 insurance 312 personal 169–72, 284, 345 private equity firms 308 record-keeping 332 ‘respondeat superior’ doctrine 147, 157–8 successor 304–5, 308 licences 192, 383–4, 386, 410 Lindsey Manufacturing Company 240 litigation privilege 296–7 lobbying 46–54, 101–2, 141 local advisors 190 Lockheed Corporation 6–7, 478, 499 559 London 2012 Olympics 32 Lucent Technologies, Inc 80–1 Mabey & Johnson 139–40, 236, 285, 292, 302 Mabey, David 140 Macmillan 132, 229, 230, 258–9 Madoff, Bernard 249, 319 Mahmood, Mazher 66 Major, John 11 Malaysia 504 Man Group 129 managers 169–72, 347, 353, 354, 360, 410 marketing schemes 197–9 Marubeni 439 match-fixing 33, 34–6, 43–4 Mauss, Marcel 112–13 McNulty Memo 244 media 55–68 bloggers 58–9 codes 57–8 financial journalism 60 freebies 56–7 investigation of ethical failings 109 misinformation about Bribery Act 141–2 payola 60–2 product placement 62–3 sport 40 unlawfully obtained information 63–8 Melbourne Storm 42 members of parliament (MPs) 51–4 Mendelsohn, Mark 123–4, 344 mergers and acquisitions 198, 304–8, 361 amnesty for FCPA violations 514 due diligence 385, 386, 388 foreign government-owned interests 513 Johnson & Johnson 521 Messent, Julian 235–6 metadata 414, 421–2 Mexico 29, 504 microfinance institutions 516 Micrus Corporation 380 Miguel, Edward 119, 120 Milverton 504 560 Index Ministry of Justice (UK) 2–3, 16–17, 162, 345 misinformation 141–2 Missouri Department of Agriculture 500, 502 mitigating factors 203 Mitsui 131 modernization 103, 119 money laundering 165, 206, 289–93, 371, 456–8, 479 Money Laundering Control Act (1986) 456–7 monitoring 348, 349, 394 COSO model 368 real-time 475–6 sales agents and consultants 373 see also compliance monitors; compliance reviews monopolies 117, 118, 121 mooncakes 378–9 Mor-Flo 504 Morford memo 262–4 Morgan, Piers 60 Mossberg, Walt 59 motivation for bribery 326, 327 Mulcaire, Glenn 67 multi-lateral treaties 12–13 multipliers 217, 218 Murphy, Douglas 74, 76–7 music 61–2 Mutual Legal Assistance in Criminal Matters Treaties (MLATs) 472 MW Kellogg 229, 258 Myanmar 28 National Crime Agency (NCA) 126–7 nepotism 101 Netherlands 28–9 New Zealand 28, 29, 195 News of the World 65, 66–8 Ney, Bob 48–9 Nietzsche, Friedrich 117 Nigeria 106, 131–2, 504, 508 ‘Bonny Island’ scheme 435, 438–40 Panalpina case 441–5 Nike 131 Nixon, Richard 7–8 Nolan Committee 11, 13, 52 non-executive directors 172 non-prosecution agreements (NPAs) 12, 238, 239–42, 282 compliance monitors 261–4, 266–7 compliance procedures 350 debarment 274 Noonan, John 112 Norway 28 Novo Nordisk 451 Obama, Barack 53, 58 OECD Convention 3–4, 11, 71–2, 93–5, 494–5 accounting provisions 94 enforcement 28–9 facilitation payments 195–6 foreign officials 88, 180 Further Recommendations 94 jurisdiction 151, 473–4 ratifications 496–7 statute of limitations 280 UK enactment of 13, 139 offence level 214–15 offset credits 506 offset scenarios 89–90 Oil-for-Food Programme 140, 236, 254–5, 435, 448–52, 456, 479–80 oil-producing nations 183–4 Olympics 31–2, 36 online gambling 33–4, 44 ‘Operation Rainmaker’ 48–9 Opinion Procedure Releases 90, 197–8, 377, 498–517 opportunity for bribery 326, 329–30, 367 Organization for Economic Cooperation and Development (OECD) criticism of the UK 14, 140 definition of corruption 99 facilitation payments 25, 191 ‘undue influence peddling’ 101 see also OECD Convention organizational culture 347, 410 Osborne, George 127 overbilling 23, 337, 339 overheads 223, 224 Index Overseas Contractor Reform Act (2010) 274 ownership, changes in 392 Pakistan 505 Panalpina 30, 77, 136–7, 193, 383, 434, 435, 440–5 Pancourier 442 parking tickets 120 parliamentary sovereignty 52 participation fees 504 partnerships 361, 385–95 passive bribery 50, 55, 82, 94, 144, 147, 169 Patel, Munir 16–17 patronage 101 pattern analysis 422 payments, making 392–3 payola 60–2 penalties 149, 249, 434, 466–8 FCPA 200–7, 214–18, 233–4 money laundering 290, 292 United Kingdom 208–13, 233, 234 see also fines; imprisonment P´erez Alfonzo, Juan Pablo 118 permits 192, 383–4, 386, 442 personal liability 169–72, 284, 345 petty bribery 20, 24–5, 185, 191 see also facilitation payments petty cash 363, 384 phased approach to compliance review 430 ‘piercing the corporate veil theory’ 159 Pieth, Mark 140 plea agreements 144, 214, 238–40, 468 self-reporting 284 TSKJ Consortium 439–40 United Kingdom 125, 248, 249–51, 254–9 United States 272 Poland 29 police 314–15, 317–18 policies, company 114, 369, 395–8, 518–19 politically exposed persons (PEPs) 180–1, 361, 390, 427 561 politics 46–55, 104 political donations 46–50, 348, 360, 364, 381–2 United Kingdom 51–4 United States 47–51, 53 Pope, Alexander 277 Portugal 29 pre-investigation stage 316–17 predictable corruption 106–7 prejudgement interest 227–8 Prevention of Corruption Act (1906) 67, 139, 173 Prevention of Corruption Act (1916) 139 private equity 308 private investigators 63–4, 67, 391 private sector 145, 147, 361, 386, 456, 475 privilege 294–303, 310 compliance review reports 428 privileged circumstances 297–8 removal of documents during a raid 318 Section notices 316 Proceeds of Crime Act (2002) (POCA) 139, 208, 209, 252 civil recovery orders 230, 253, 280 confiscation orders 231 money laundering 289, 290–1 privileged circumstances 297–8 procurement 272–6, 365, 368, 410 see also contractors product placement 62–3 promotional expenditure 145, 148, 183, 184–5 Bribery Act Guidance 348 company risk 360 DOJ Opinion Procedure Releases 500, 514 property 22 proportionality compliance reviews 429–31 proportionate procedures 345–6 proposition bets 37–9 protectionism 118 Prudential Regulation Authority 126 public attitudes 121 Public Bodies Corrupt Practices Act (1889) 139, 173 562 Index Public Contracts Regulations (2006) 149, 209, 275–6 public interest 104, 252, 253, 323 public international organizations 175–6 public officials 50–1, 105, 108 Bribery Act 88–90 employed as consultants 379–81 facilitation payments 333 hospitality and entertainment 376 OECD Convention 494 ‘red flags’ 335 sales agents 370 travel 377–8 see also foreign officials public relations (PR) 56 public services 104, 105, 107 purchase orders 340, 365 PWS International Limited 235 qualifications, misrepresentation of 23 ‘qui tam’ provision 320, 323 R v Del Basso 231 race-fixing 35 Racketeer Influenced and Corrupt Organizations Act (RICO) 479, 480 radio stations 61–2 Ragunandan, T.R 121 raids 317–18, 413 rationalization 326, 328 rationing 118 Raval, Vasant 172 receipts 336, 375–6, 377, 383, 384 reciprocity 112–13 record-keeping 78, 79, 210–11, 331–4, 350 Companies Act 492–3 compliance monitors 267 compliance reviews 407–8 consultants 380–1 FCPA 145, 149 hospitality and entertainment 375–6 internal controls 363 see also accounting; documents ‘red flags’ 335–6, 477 compliance reviews 407, 408, 410, 428 due diligence on business partners 387, 390–1 forensic accounting 424, 425 refereeing 36–7 regulated sector 289, 290–1 remediation efforts 142, 240, 269, 282, 285 compliance reviews 428–9 impact on penalties 203, 205 settlements 245 reparation 235–6 reporting CCOs 356 compliance monitors 263 compliance reviews 427–9 duty to report 289, 290–2, 312 hotlines 349, 402 Johnson & Johnson 519 whistleblowing 402–3 see also self-reporting ‘resource curse’ 118 ‘respondeat superior’ doctrine 146, 147, 157–8, 304, 461 restitution 233, 234–6, 241, 251, 268, 440 ‘revolving door’ 52–3 rewards 401 Rio Tinto 130–1 risk assessment 25–9, 347, 357–62 compliance portals 398 COSO model 367 due diligence 386 Johnson & Johnson 519–20 proportionate procedures 345–6 risk committees 358–9, 369 roadblocks 196 Robinson, Mary 103 round sum payments 335 routine governmental action 192, 333 rugby league 42 rule of law 27, 104 Russia 29, 420 safety issues 196 salaries 117 Index sales agents 369–73, 386, 388, 460, 521–2 Salomon Brothers 240 Salt Lake City Olympics 32, 36 Sarbanes-Oxley Act (2002) 312, 322, 364, 402, 465 Saudi Arabia 445–6, 447, 499 Schapiro, Mary 319 Schering-Plough Corp 381–2 Schnitzer Steel Industries (SSI) 459 school fees 21, 22 Scotland 156 Seaboard decision (2001) 246 search warrants 314–15, 316 secrecy laws 417 Section notices 314–18, 413 sector risk 30–1, 346, 360–1 sector-specific investigations 29–30 Securities Act (1933) 201 Securities and Exchange Commission (SEC) 8–9 accounting violations 167, 168 disgorgement 219–21, 226–8 DOJ comparison 134–7 DOJ Opinion Procedure Releases 198 international cooperation 472 issuers 78 non-executive directors 172 Novo Nordisk case 451 Panalpina case 444 penalties 200, 201, 202, 204–5 plea agreements 144 privilege 302 prosecution of the FCPA 12, 15, 123, 124, 150, 461, 464–6, 468 Schering-Plough case 381–2 sector-specific investigations 30 settlements 238, 239, 241–2, 246 Siemens case 436 SSI case 459 Statoil case 154 subsidiaries 160 tolling agreements 281 TSKJ Consortium case 439 whistleblowers 321–2, 323 segregation of duties 364–6 self-monitoring 270, 350 self-reporting 8, 29, 203, 282–8, 464 563 discovery of bribery 312–13 mergers and acquisitions 305–6 money laundering 289–93 waiver of privilege 302 sentencing credit 282, 283–4, 285, 324 Serious Crime Act (2007) 211 serious crime prevention orders (SCPOs) 208, 211–12, 253 Serious Fraud Office (SFO) BAE Systems 445–6, 471 Balfour Beatty case 14–15 Bribery Act 141, 144, 150 compliance monitors 267–8 convictions 249 enforcement 123, 124–5, 139–40 facilitation payments 193–5 guidance from 197, 198–9 hospitality 374 money laundering 292 National Crime Agency 126, 127 penalties 209–11, 212, 229–30, 233, 234 pre-Bribery Act corruption 173 privilege 302 prosecutions 474–5 reparation 235 Section notices 314–18 self-reporting 284–5, 286, 287 settlements 248, 250–1, 252, 253–9 subsidiaries 162–3 Serious Organised Crime Agency (SOCA) 280, 289, 290, 292 Serious Organised Crime and Police Act (2005) 209, 248, 256–7 settlements 238–43, 244–7, 468–9 BAE Systems 446–8 compliance monitors 261, 268, 269 compliance procedures 350 debarment 274 Panalpina 443–5 self-reporting 284 Siemens 436–7 tolling agreements 281 TSKJ Consortium 439–40 UK approach 248–60 564 Index settlements (continued) see also deferred prosecution agreements; non-prosecution agreements severance payments 509 share-tipping 60 shareholder actions 477, 478–9, 481 Shoup & Co 500 Siemens 15, 128, 272–3, 353, 424, 469 case study 435–8 compliance monitor 266 compliance procedures 344, 357 conspiracy charges 280 fine 71, 202, 203, 434 forfeiture 205 insurance 312 investigation costs 277–8 Oil-for-Food Programme 480 Singapore 28, 502 slippery slope 327 Slovak Republic 29 Slovenia 29 ‘slush funds’ 436, 463 small companies 346, 355, 363, 394 Snamprogetti 132, 203, 434, 435, 438–40 snooker 34–5 social acceptability 328–9 Somalia 28 Sony BMG Music Entertainment 61–2 Sousa, Guy 62 South Africa 29 South Korea 28–9, 195, 474 Soviet Union, former 105 Spain 28–9 sponsorship, disclosure of 60–1 sport 31–45 betting 33–9, 43–4 corrupt sports organizations 39–41 hosting of games 41–2 investigating and prosecuting 43–4 trading of players 42–3 spot bets 37–9 spread betting 33–4 Stanley, Albert 439–40 state-owned enterprises (SOEs) 177, 178–9, 180, 379–80, 505, 507, 508 statements of commitment 395–6 Statoil 154 statute of limitations 145, 279–80, 281 stopping payments 189–90 subcontractors 142, 146, 155, 387, 463–4 subsidiaries 142, 146, 157, 158–65 accounting violations 167–8 export bans 275 Siemens case 437 subsidies 118 Sudan 501 Sugar, Alan 60 suppliers 22–3, 309, 463–4 kickbacks from 337–41 ‘red flags’ 335, 336 suspicious behaviour 421–2 Sweden 28–9 Switzerland 28, 129 Syncor International Corporation Inc 159–60, 204 takeovers see mergers and acquisitions Tanzania 16, 235, 447 ‘tapping up’ 43 tax deductibility 94 tax relief 383 Taylor, Gordon 67 Taylor, Lord 54 Technip 128, 131–2, 203, 266, 434, 435, 438–40 temporary importation permits (TIPs) 442 Tenaris 242 tendering 23, 337, 339 see also bid rigging tennis 33, 43, 44 terrorism 480–1 Tesler, Jeffrey 205–6, 434, 439, 440 theft 24, 100 Thompson & Green 501 Thompson Memo 244, 301 Tidewater 131, 444, 445 Tillman Act (1907) 49 tips 111, 112 Index Titan 204, 478 tolling agreements 281 top-level commitment 347, 352–5, 360 TRACE International Group 360, 514 trade restrictions 118 trading in influence 101–2 trading of players 42–3 training 348, 349, 398–400, 407 deficiencies in 360 expenses 505, 507 Johnson & Johnson 350, 523 sales agents and consultants 372 transaction risk 361, 371 transactions, proper authorization of 366–7 translators 432 Transparency International (TI) 45, 103 Corruption Perceptions Index 26–7, 28, 360 criticism of Bribery Act Guidance 138, 142 definition of corruption 99 travel 80, 335, 377–8 bona fide expenditures 184–5 contract-related bribery 21, 22 DOJ Opinion Procedure Releases 499, 500–3, 505, 507, 511, 512, 517 Johnson & Johnson 518–19 Travel Act 459–60, 479 Treadway Commission 367 ‘triage committee’ 427, 519 Truscott, Lord 54 trust 83, 87, 99, 115 TSKJ Consortium 435, 438–40 Turkey 29 Twain, Mark 46, 107 UBS 129 underperformance in sport 36 ‘undue influence peddling’ 101–2 United Kingdom (UK) accounting violations 470–1 BAE Systems 15–16, 445–8 Balfour Beatty 14–15 565 ‘cash for questions’ scandal 10–11, 52 compliance monitors 261, 267–8, 269 Corrupt Practices Act data privacy and protection 415 debarment 275–6 definition of bribery 102 disgorgement 219, 229–31 double jeopardy 473 draft Bribery Bill 15 draft Corruption Bill 13, 99 enforcement 2, 124–7 facilitation payments 191 football transfers 43 hospitality 374 industrial revolution 119 jurisdictional issues 154–6 lobbying 47, 51–4 members of parliament 504 money laundering 289–92 OECD Convention 13, 28, 72 OECD criticism of 14, 140 penalties 208–13, 233, 234, 249 privilege 295–8, 302 reparation 235–6 Section notices 314–18 self-reporting 284–5, 286–7 settlements 248–60 shareholder litigation 481 spread betting 33 subsidiaries 157, 162–5 whistleblowers 323–4 see also Bribery Act; Serious Fraud Office United Nations (UN) 98, 175, 448, 449, 479 United States (US) compliance monitors 261, 262–7, 270 cross-border data transfers 416, 417 debarment 272, 273–5 disgorgement 219–28 double jeopardy 473 enforcement 2, 123–4, 134–7, 464–8 facilitation payments 195 historical developments 6–10, 11–12 566 Index United States (US) (continued) industrial revolution 119 Innospec case 255, 256 jurisdictional issues 152–4 lobbying 46, 47–51, 53 OECD Convention 28, 72 online gambling 33–4 other legislation 456–60 payola 60–2 penalties 200–7, 233–4, 249 privilege 294–5, 298, 299, 301–2 product endorsements 58 ‘respondeat superior’ 157–8, 304 self-monitoring 270 self-reporting 284–5 settlements 238–43, 244–7, 250, 254 statute of limitations 279–80, 281 subsidiaries 158–61 whistleblowers 319, 320–3 see also Department of Justice; Federal Sentencing Guidelines; Foreign Corrupt Practices Act; Securities and Exchange Commission Universal Corporation 203 Utilities Contracts Regulations (2006) 275–6 values 120 Vetco 30, 443 see also ABB Vetco Gray Vidal, Gore 17 Viglen Technology 60 visas 192, 383–4, 386, 410, 431 voicemail, interception of 65, 67 Volkov, Michael 461 Waigel, Theodor 266, 278 Walpole, Sir Robert 117 Warner, Charles Dudley 46, 107 Washington, George Watergate (1972) 7–8 Weir Group 236 Weissmann, Andrew 461 Whistleblower Protection Act (1989) 323 whistleblowers 311, 319–25, 353, 402–3, 465 compliance reviews 407 suspended sentences 257 wrongful termination 480 wilful blindness 170–1 Willbros 30, 478 Willis 126 wire fraud 450, 451, 456, 458–9 work-product doctrine 295, 301–2 World Bank 99, 113, 132–3, 175, 236, 258–9, 437 World Cup (FIFA) 40, 41–2, 45 World’s Most Ethical Companies (WMEs) 109 Worldwide Governance Indicators (WGI) project 27 written law 89, 93, 145, 148, 183–4, 513 wrongful termination 480 zero-tolerance approaches 328–9, 353, 395 ... Frequently Asked Questions in Anti- Bribery and Corruption Frequently Asked Questions in Anti- Bribery and Corruption David Lawler A John Wiley & Sons, Ltd., Publication This edition first... Competition Act 1998, the FCPA was amended once again to comply with the US’s obligation to enact the OECD 12 Frequently Asked Questions in Anti- Bribery and Corruption Convention These amendments expanded... Pays Bribes? 20 Frequently Asked Questions in Anti- Bribery and Corruption B ribery and corruption cover a wide variety of behaviours and a multitude of different actions that depend on circumstances