What are the recent trends in investigations and enforcement in your jurisdiction?
Bribery & Corruption
Investigations into, and enforcement of, allegations of foreign bribery appear to be steadily increasing in Australia. The Phase 4 Report (mentioned in our previous response) described Australia's enforcement of its foreign bribery offence as having 'increased markedly' since the Phase 3 Report. Given the increasing cross-jurisdictional cooperation in this area, we expect this trend to continue, particularly if proposed changes to the law are enacted and in force, as some of the changes will enhance the current framework (see response to question 18 below).
Last year, in R v Jousif; R v I Elomar; R v M Elomar  NSWSC 1299, two company directors of an Australian engineering, infrastructure and construction company and a third party facilitator pleaded guilty to conspiring to bribe a foreign (Iraqi) official in breach of federal provisions. The offending conduct included transferring USD1 million for the purpose of bribing the public official. The New South Wales Supreme Court sentenced each director to four years imprisonment and an AUD250,000 fine, while the intermediary received a four year prison sentence. These were the first published prison sentences relating to the federal offence of bribery of a foreign public official.
Investigations into allegations of domestic bribery also appear to be increasing, partly due to active state-based anti-corruption commissions which investigate public sector corruption. On occasions these have a flow-on effect relating to investigations into private sector bribery.
Enforcement of corruption-related offences remains high. At the same time, in December 2017, the Polish government published its Anti-Corruption Strategy 2018-2020. The main objective of the Strategy is to considerably reduce corruption and to promote social awareness in respect of counteracting corrupt practices. The specific priorities to achieve this overall objective are:
- strengthening educational and preventive activities;
- improving monitoring mechanisms regarding corruption-prone issues and monitoring the application of the anti-corruption regulations; and
- improving cooperation and coordination between the law enforcement authorities, including international cooperation.
As detailed in Q14 above and Q18 below, government efforts at creating a modernised framework for carrying out such investigations and enforcement have escalated, with the introduction of significant whistleblower protections in 2010 and 2014 and the introduction of the Criminal Justice (Corruption Offences) Bill in 2017. This is indicative of increasing focus being placed on this area by authorities.
Please refer to Question 15.
In the last two to three years, the SFO has begun to use Deferred Prosecution Agreements (DPAs) following corporate bribery investigations. The SFO entered into its first DPA in 2015, with Standard Bank. Other examples have followed: XYZ (an unnamed company) in 2016; Rolls-Royce and Tesco in 2017.
The SFO has also become more assertive in testing claims of legal professional privilege arising in internal investigations. Companies - particularly against the backdrop of negotiating a DPA - are coming under increasing pressure to waive arguments of privilege.
Finally, there is increased coordination between the SFO and its counterparts in foreign jurisdictions. This can include sharing of information and documents, creating an increasing challenge for companies under investigation to manage their global regulatory risk.
As mentioned in question 15, the UAE treats corruption and bribery very seriously and is constantly striving to ensure that it can minimise the risks of both. The establishment of the DESC, (Dubai Electronic Security Center) in 2014 is clear evidence of this. DESC was established with the aim to develop and implement information security practices, it has been setting good-practice criteria for cyber security across the Emirate. DESC’s strategic plan includes initiatives to combat threats, cyber-attacks, and cyber-crime.
Historically enforcement actions in Singapore have been focussed predominantly on individuals and on private sector bribery. In 2017, 92% of cases handled by the CPIB arose in the private sector with only 8% relating to public sector bribery (down from 15% in 2016).
Enforcement against corporates remains rare, but the recent investigation into Keppel Offshore & Marine may indicate a potential reversal of this trend. The widely reported Keppel case arose from a series of corrupt payments made to officials of Brazilian state-run oil company, Petrobras, and resulted in investigations by – and a subsequent global settlement in December 2017 with – authorities in Singapore, Brazil and the USA.
The Communist Party of China (“CPC”) is building on the overwhelming momentum and keeping up the pressure and the enforcement intensity on anti-corruption and bribery. The overall goal is to improve the system of disabling corruption and bribery, to create an influential atmosphere and to demonstrate the government’s determination to eradicate corruption and bribery. In early January, 2018, President Xi Jinping reiterated during the Central Commission for Discipline Inspection (“DIC”) Meeting that there will be zero tolerance for corruption, and China will leave no blind spots for both bribery offering parties and taking parties.
From a structural perspective, the supervisory system reform is among the latest enforcement trend to rein in corruption, as a representative example for improving the mechanism and integrating the resources for anti-corruption and bribery.
As for the enforcement scope, the focus has been extended from bribery taking, to cover both bribery taking and offering acts. The targets will involve more “seeming outliers” such as the friends or relatives of the state functionaries, or people with a connection to the counterparty of the transaction.
In terms of an industrial perspective, the health care industry remains one of the authority’s primary focuses, with commercial bribery being one of the most common investigations taking place at the moment. Almost one out of every three companies in this industry, that were subject to investigation in 2017, were being investigated for commercial bribery. Other industries such as automobile, fast moving consumer goods, telecommunications, and financial industries are also among the target list of the recent enforcement trend.
In addition, the Chinese government has also attached great importance to the international cooperation on cracking down on bribery and corruption. This is done through continuous efforts, such as the active participation in the internationally joint enforcement programs and facilitating the establishment of the APEC Network of Anti-Corruption Authorities and Law Enforcement Agencies.
Mexico is, as of this date, in a particular circumstance, due to the upcoming presidential election to take place next July (2018). In that sense, the governing party (which has been in the public eye for diverse corruption allegations) has taken an approach to prosecute corrupt public officers and even state governors which are facing bribery, collusion, illicit enrichment, traffic of influences and other indictments. However, in most cases, there have not been official rulings sanctioning those officials, leading to public skepticism as to the actions undertaken by the government.
Mexico has deep corruption problems; it ranked 135 (out of 180, where 1 is the less corrupt and 180 is the most corrupt) in the Corruption Perceptions Index 2017 issued by Transparency International. Hence, the fight against corruption is a daily topic in the spotlight of national media, political parties and civil organizations. By these means, such fight against corruption is one of the main subjects that all political parties and contenders to Mexico’s presidency have adopted as flagship.
Although criticized by several main commentators (mainly because the autonomy given to its prosecuting entities seems insufficient), it is true that the implementation of the SNA has been a huge step towards mitigating corruption, at least, compared to the former system and elements that the government had for such purpose.
In light with the above, we are yet to see whether the next elected President can fully and successfully implement the SNA and reduce one of the most relevant systematic and costly problems of the country.
From a private sector perspective, the -every day increasing- actions taken by foreign authorities to implement anticorruption measures and to sanction corrupt conducts of corporations overseas, as well as worldwide known corruption scandals altogether, have raised the awareness of business organizations towards the implementation of robust compliance programs and investment in the setting up of full compliance departments, including full adoption of policies to comply with the U.S. Foreign Corrupt Practices Act, and, in a less common fashion, with the United Kingdom Bribery Act.
The competent Prosecuting Authorities (namely the Anti-Corruption Prosecutor Office) have become very active in investigating cases of alleged bribery and have been targeting specific industries and sectors, such as the health industry, public works and financial institutions. Many of these investigations have become high profile cases, covered by the media on a daily basis. In many of these cases members of the Anti-Corruption Prosecutor’s Office have traveled to other jurisdictions to seek assistance by other enforcement agencies in collecting evidence and they have been relying heavily on mutual assistance requests especially for acquiring evidence of money transactions between jurisdictions.
In the past year there has also been a combined co-operation of the Anti-Corruption Prosecutor’s Office and other enforcement agencies, especially the General Inspector of Public Administration and the Financial Police to address allegations on corruption.
The most recent trend of investigations and enforcement can be traced back to announcement of demonetization of certain currency notes by the Government for fighting the menace of black money, tax evasion and illicit / counterfeit currency. This was followed by the enactment of the Finance Act, 2017 which amended certain provisions of the Prevention of Money Laundering Act and brought in stringent checks and balances to curb corruption.
In the past recent years the enforcement of the legal framework relating to the fight against corruption has been increasing.
A more thorough approach from the government and a greater effort to comply from the organisations has led to an improvement of the paradigm.
Recent years have been marked by a string of high-profile cases that have involved prominent individuals such as a former Prime-Minister, a former Minister of the Interior, an Appellate Court Judge and several bankers.
However, according to statistics from the General Department of Justice Policy, the number of people accused and condemned for corruption has been falling since 2010, with only 45 accused and 25 convicted in 2015 from 176 accused and 78 condemned from 2010.
Albeit Denmark is being criticised for lagging enforcement against corruption from the OECD and others, there is no imminent changes in law or practice affecting enforcement against corruption in Denmark
Since the introduction of section 100b of the Criminal Procedure Code in August 2017 government authorities are able to secretly monitor IT-systems. This new regulation allows prosecutors to monitor corporate structures and gather evidence, without being detected.
Furthermore, the number of internal investigations led by third parties are increasing.
Companies initiate internal investigations to prevent search and seizures, severe penalties and bad press.
The level of attention by the Public Prosecutor’s Offices in relation to bribery crimes is always high, even if nowadays there are not as many proceedings as there used to be in the mid-nineties, when important scandals related to public bribery at both a local and a national level came to light. It has to be pointed out that, in any case, because of the principle of mandatory prosecution, which applies in Italy, every time a Public Prosecutor is informed of the alleged commission of a crime, he/she has no choice but to investigate it and – in case he or she deems that there is any ground to try the case in Court – to seek for the committal to trial of the defendant.
In the past years, we have seen a significant increase of high-profile corruption cases, as well as several investigations on money laundering cases.
The fight against drug trafficking has also been increasing significantly over the past few years.
HRA: Recently, investigation and enforcement in Mozambique is being very influenced by the public opinion and major media channels.
There are no specific trends as for the investigations and enforcements. Current investigation and enforcement is consistent with past practice.
In French criminal proceedings the powers of investigation depend on the complexity and the seriousness of the offence. The 2013-1117 Act has extended the powers of control of the French administration. However in case of allegation of bribery the judge may order all relevant investigative measures to find evidence. These provisions also apply to bribery. The French anti-bribery agency has also been entrusted with supervisory powers.
In addition to the civil and criminal sanctions that have been reinforced by recent legislation, the new obligations on companies to prevent bribery represent a major development. Breaches of these prevention obligations will be subject to administrative sanctions.
Since a few years, prosecuting international bribery and corruption has been a declared key goal of the current Federal Prosecutor. In line with that goal, the prosecution of large international bribery schemes has steadily increased in the recent years.
In doing so, the Swiss authorities have frequently also resorted to so-called "special" procedures, in particular by penalty orders or abbreviated proceedings (where the accused pleads guilty and agrees on a sentence with the public prosecutor, with the court's role being limited to a review of the agreement). In some instances, the prosecutor has also agreed to close the proceedings after reparatory payments were made voluntarily. These special proceedings are in principle highly efficient, in particular where the facts may not have been determined in all details, and allow for a quick resolution without having to resort to full prosecution. However, the OECD has recently criticized their widespread use as the decisions rendered may lack the necessary dissuasive effect due to overly mild sanctions, and the level of transparency is deemed insufficient as public access to such decisions is limited.
In the recent past, the authorities have also increasingly collaborated with foreign authorities, in particular in cases of major corruption, aiming at internationally coordinating the prosecution in the various jurisdictions to render it more efficient and avoid having to discontinue investigations at a late stage due to overlaps. In corruption cases involving Swiss perpetrators, the Federal Prosecutor's Office is also supporting mutual legal assistance to allow in a first step a prosecution of the main offences abroad, so that the Swiss companies can be prosecuted domestically in a second step based on the foreign conviction.
A few recent trends have emerged in enforcement of the FCPA:
- Increased incentives to cooperate: The most significant recent change in FCPA enforcement is the DOJ’s FCPA Corporate Enforcement Policy, issued in November 2017. The policy sets forth a presumption of declination if no aggravating circumstances are present and corporate entities provide full cooperation, which includes, among other things, voluntary self-disclosure and timely and appropriate remediation. If DOJ decides declination is appropriate, the corporate entity is still required to pay all disgorgement, forfeiture and/or restitution, as appropriate. If the corporate entity does not meet all of those requirements for a declination, the policy provides avenues for the entity to receive up to a 50% reduction in criminal fines and to avoid the appointment of an independent compliance monitor.
- Multi-jurisdictional enforcement and investigations: The DOJ and SEC seek to closely coordinate their investigations and enforcement actions not only between themselves but with foreign authorities as well. As other countries have passed anti-bribery laws, they have increased their enforcement and worked with US authorities in investigating violators and obtaining global resolution. Recent enforcement actions have included coordination with authorities in, for example, Singapore, Brazil, China, the Netherlands and Switzerland involving companies in the oil and gas support services, telecommunications, pharmaceutical and shipping industries.
- Individual accountability and liability: US government authorities continue to emphasise holding individuals—not just corporate entities—accountable and liable for FCPA violations. In several recent enforcement actions against corporate entities, individuals were also criminally charged for their involvement in the bribery violations.