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The Anticorruption Blog

Five Minutes on… Anti-Bribery and Corruption Laws in Europe

Posted in Commercial Bribery, Compliance Program, Courts, FCPA Jurisdiction, Foreign Corrupt Practices Act, France, Germany, UK Bribery Act, United Kingdom

Anti-bribery and corruption has been a hot topic in the US for almost 40 years. The topic has historically however received much less attention within Europe. That is now changing as Europe is beginning to catch up and many European countries have already implemented anti-bribery laws much stricter than those in the US. Recent events have put the topic back on the agenda and we can expect further debate on the effectiveness and efficacy of enforcement in Europe.

Five Minutes On… is a series designed for companies doing business across borders, providing counsel an overview of a complex topic in a format that allows rapid assimilation. To view a full copy of the article on Anti-Bribery and Corruption Laws in Europe please click here.

 

 

Monthly China Anti-Bribery Update Report — June 2015

Posted in Uncategorized

1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) It was reported on June 5, 2015 that Li Jiezhi (“Li”), the former Deputy General Manager of Anhui Highway Holding Group Co., Ltd. was sentenced to 20 years in prison for accepting bribes and for misappropriation of public funds by the People’s Court of Huaiyuan County, Anhui Province.

Reportedly, Li misappropriated public funds up to RMB 30 million (USD 4.83 million) together with others for his own business operation, and illegally accepted cash, shopping cards, and precious metal valued at RMB 3 million (USD 483,525).

(2) On June 11, 2015, Zhou Yongkang (“Zhou”), a former member of the Political Bureau of the Communist Party of China Central Committee, was sentenced to life in prison by No.1 Intermediate People’s Court of Tianjin for taking bribes, abusing power, and intentional disclosure of state secrets following a first trial. Zhou was also deprived of his political rights for life, and all of his personal properties were confiscated.

According to the court, Zhou was proved to have taken advantage of his position and to have sought illegal benefits for several high level officers, including Jiang Jiemin (“Jiang”), the former Chief of State-owned Assets Supervision and Administration Commission. In return, Zhou, along with his wife and son, accepted cash and properties from bribe-givers in amounts exceeding RMB 129.7 million (USD 20.9 million).

The court further ruled that Zhou abused his office by requiring Jiang and Li Chuncheng, the former Deputy Secretary-General of CPC Sichuan Provincial Committee to provide assistance to certain individuals (including his sons) for their business activities, who accordingly gained illegal benefits up to RMB 2.136 billion (USD 344.2 million), causing large economic losses to the state and to public properties estimated to be more than RMB 1.486 billion (USD 23.93 million).

(3) On June 12, 2015, Li Nianyou (“Li”), the former Deputy Director of Hainan Provincial Department of Ocean and Fisheries, was sentenced to imprisonment for 15 years and wsa deprived of his political rights for 5 years after a first trial by the Intermediate People’s Court of Hainan Province.

Allegedly, during the period from 1995 to 2013, while Li held positions in the Transportation Bureau and Department of Ocean and Fisheries of Hainan Province, he accepted bribes on multiple occasions aggregating RMB 4.53 million (USD 730,128) and took advantage of his positions to seek benefits for 16 individuals in the appropriation of funds for project, job transfers, and administrative approval related matters.

(4) On June 25, 2015, Lin Qiaoyin (“Lin”), the former Party Member and Vice President of Municipal Political Consultative Conference of Ji’an City, Jiangxi Province, was sentenced to 13 years in prison by the Intermediate People’s Court of Yingtan City, Jiangxi Province for taking bribes.

According to the court, from September, 2000 to October, 2010, Lin took advantages of his position as the Party Secretary of Xiajiang County, Jiangxi Province and sought illegal benefits for bribe-givers engaged in land transfer, project contracting and project operations, real estate appraisal, and capital appropriation. In exchange, Lin illegally accepted cash amounting to RMB 7.525 million (USD 1.21 million). Lin was given a lighter sentence due to his confession and his return of illegal gains.

(5) It was reported on June 25, 2015 that the Intermediate People’s Court of Suzhou City, Anhui Province affirmed the life imprisonment sentence of Chen Lianggang (“Chen”), the former Director of Land and Resources Bureau of Anhui Province. In addition, Chen was deprived of his political rights for life, and all of his personal properties and ill-gotten gains were confiscated.

Chen was found guilty of taking advantages of his position to seek illegal benefits for several real estate developers and individuals during his term of office from 2004 to 2013. In exchange, Chen illegally accepted cash totaling RMB 2.96 million (USD 477,088), USD 20,000, shopping cards valued at RMB 75,000 (USD 12,088), shares of an investment company valued at RMB 800,000 (USD 128,942), and dividends from a real estate development company up to RMB 2.96 million (USD 477,088).

4. Other

(1) It was reported on June 29, 2015 that the Reporting Center of the Supreme People’s Procuratorate received on average 15,000 letters per week over the past year. The Reporting Center was established to engage the public to combat corruption and bribery through a reporting system. Reports can be made on a no-name basis, and such “whistleblowers” may be rewarded if the case he/she reports is placed on file for investigation and a valid judgement in the case is eventually made by the court. All personal information of the “whistleblowers” is to be kept confidential.

5. China-related FCPA Action

No developments.

The UK Serious Fraud Office (SFO) gets serious

Posted in Commercial Bribery, Compliance Program, Courts, Foreign Corrupt Practices Act, UK Bribery Act, United Kingdom

Reports suggest that the SFO is currently investigating and prosecuting serious allegations of complex fraud and corruption. The announcement this spring that the SFO had started an investigation into the Bank of England’s actions following the rigging rumours, (as reported by the BBC amongst others) demonstrates its intention to pursue high-profile offenders.

David Green, who was appointed as Director of the SFO in April 2012, promised to prioritise the more difficult cases that may fall outside of the expertise of other bodies. He was reported in Fraud Magazine as saying: “Many had the impression that the SFO had developed a certain nervousness about taking on the very top-level cases for which, in my view, it was designed. I have changed that”

In this blog we:

  • look at the new focus of the SFO to combat high level economic crime amongst top level organisations;
  • provide examples of SFO success stories, giving details of the current conviction statistics; and
  • offer a brief discussion of the impact that the Bribery Act 2010 (“Bribery Act”) has had to date.

“Very top-Level” Investigations

Three years on from the appointment of David Green, the SFO seems to be focusing their attentions on industry giants. The SFO is currently investigating major players including a world renowned luxury car manufacturer, international banks, a household name supermarket, a multinational pharmaceutical company and a leading air travel manufacturer for offences such as overseas corruption, accounting irregularities and fraud. There have been some headline grabbing charges and convictions over the last year including:

  • the prosecution of Ulf Magnus Peterson, the head of the collapsed hedge fund Weavering. Peterson received a 13 year prison sentence after being found guilty of fraud, forgery, false accounting and fraudulent trading earlier this year (Reported by the Daily Mail, Bloomberg and the Financial Times);
  • the JJB prosecution in which the former Chief Executive of JJB was found guilty of fraud, furnishing false information and attempting to pervert the course of justice and sentenced to a 4 year prison sentence. The beneficial owners of a JJB supplier, were also sentenced to 18 months’ imprisonment for perverting the course of justice (reported by the Guardian, the Telegraph and the BBC); and
  • the ongoing Alstom investigation, which saw Mr Lainé (the former Senior Vice President Ethics & Compliance and director of Alstom International Limited) become the sixth person involved to be charged by the SFO (See the SFO press release for more information).

The Statistics

The SFO claims it “has recovered its mojo”, but do the statistics support that? Conviction rates[1] which were as low as 70% for 2012/13, have improved significantly since David Green took charge, reaching 85% in 2013/14.  Exaro, the online investigative paper commented that David Green “spent much of his first year as head of the SFO erasing the legacy of his predecessor, Richard Alderman”. At least a portion of the unsuccessful cases brought in 2012 could therefore represent part of that legacy. The recent return to success may also be thanks to the general move away from offering deals to self-reporting corporate bodies, as the new tougher SFO aims for convictions. The SFO has confirmed that “self-reporting is no guarantee that a prosecution will not follow”.

The SFO has now also “rekindled” its relationship with the US Department of Justice (“DoJ”). Previously, the US counterpart felt that the SFO was “interfering in its cases”. Perhaps the improved conviction figures, coupled with the new hardline public image of the SFO under David Green, have given the DoJ a new found confidence in the UK prosecutor. (See Practical Law article: Bribery and corruption: negotiated settlements in a global enforcement environment for more information).

Bribery Act, Anti-climax?

The recent successes have not however been attributed to the introduction of new offences under the Bribery Act. Since 2011, the extent of the impact of the Bribery Act in the UK has been queried – so much so that Stuart Alford QC, Joint Head of Fraud at the SFO, decided to address the following, all too common, question: ‘why have there been no Bribery Act prosecutions; is this Act really being taken seriously?’

In response, the QC highlighted the following key points:

  • there have been convictions! The first two convictions under the Bribery Act 2010 took place in December 2014 following the SFO investigation into the £23m AgroEnergy biofuel scam;
  • the Bribery Act is not retrospective – therefore, criminal conduct punishable under the Act has to have taken place after 1 July 2011; and finally
  • the Bribery Act represents a very significant change and it will take time for corporate ethics to develop as envisaged in the Act. By way of reference, it is helpful to note that it took many years for prosecutions to come through under the 1977 Foreign Corrupt Practices Act in the USA.

According to Stuart Alford QC: “the record in respect of the Bribery Act is not nearly as troubling as some people make out. This is a piece of legislation which is taken very seriously, and you will start to see an increase in the number of prosecutions: both from the SFO and other agencies.”

The new robust SFO should give us plenty to report on in the coming months and perhaps we will start to see more Bribery Act cases over the course of the year.

[1] Conviction rates as provided in the SFO Annual Reports for 2013 and 2014.

FOURTH EUROPEAN ANTI-MONEY LAUNDERING DIRECTIVE LAUNCHES UBO-REGISTER

Posted in Uncategorized

Written by Anthony Van der Hauwaert (Partner) and Thibault Viaene (Associate), Squire Patton Boggs, Brussels.

On 20 May 2015, the European Parliament increased the hunt for tax evaders, money launderers and terror financiers by adopting the fourth instalment of the Anti-Money Laundering Directive (“AMLD”). The main novelty of the new directive is the introduction of a central UBO-register, a public register which identifies the ultimate beneficial owners (“UBO’s”) of companies and trusts. The implications for Belgian companies are not to be neglected.

Under the previous version of the AMLD, which was adopted in 2005 and transposed into EU Member States’ legislation in 2007, financial institutions, lawyers, notaries and accountants were already obliged to verify who the ultimate beneficial owners of their customers were, but the new directive clearly goes beyond the one it replaces by obliging EU Member States to obtain and hold information on the UBO’s of both companies and trusts.

Member States now have two years to put in place an adequate, accurate and current UBO-register which identifies the beneficial owners of corporate entities established within their territory. A beneficial owner means any natural person who ultimately owns or controls the corporate entity through direct or indirect ownership or control over 25% of the shares or voting rights.

The UBO-register will be accessible for:

  • competent authorities (such as tax administrations and national banks) and EU Intelligence Units, without any restriction;
  • so-called “obliged entities” (notaries, lawyers, banks, … whilst performing their customer due diligence duties); and
  • the public.

The public (any person or organization) can access the UBO-register if they are able to demonstrate a “legitimate interest”. For example a plaintiff in a legal procedure could be able to access the UBO-register in case it seeks evidence of fraud or corruption.

Since tax evaders, money launderers and terror financiers often hide behind trusts and comparable setups, their UBO’s must also be recorded in a separate “fiscal register”, but only if the trust concerned generates tax consequences. The identity of the settlor, trustee(s), the protector (if relevant), of the beneficiaries or class of beneficiaries, and of any other natural person exercising effective control over the trust must also be included in the register. The register will only be accessible to competent authorities, EU Intelligence Units and obliged entities.

Unlike in many other countries, shareholding in Belgian companies is not public. It is yet to be seen whether the introduction of a central UBO-register will change a great deal in Belgium, since a legitimate interest is required to access the register and Member States are able to deny access to the UBO-register in exceptional circumstances. Details on how the system will be implemented in Belgium are not yet available at this stage. Whether an actual public shareholders’ register will be put in place – as was recently the case in Denmark or The Netherlands − is unclear. It may be that the UBO-register will be linked to the Register of Legal Persons of the Official Belgian State Gazette or the Crossroad Bank for Enterprises and that those who want to access it will have to register online and pay a fee.

In times of international terrorism and widespread tax evasion, the UBO-register could prove to be a powerful tool to combat financial and economic crime. In implementing the system in Belgium, the legislator should however try to minimize the administrative burden and expenses, both for corporations and notaries.

Anthony Van der Hauwaert

Thibault Viaene

 

Monthly China Anti-Bribery Update Report — May 2015

Posted in Uncategorized

1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) It was reported on May 5, 2015 that Zhu Yifang (“Zhu”), the former Deputy Party Secretary of the Pingdingshan Municipal Political Consultation Conference of Henan Province, was sentenced by the Intermediate People’s Court of Zhumadian City, Henan Province to life in prison for taking bribes, embezzlement, and large unidentified properties. All his personal properties were confiscated.

Reportedly, Zhu was found guilty of abusing his office to accept and solicit bribes totaling RMB 19.89 million (USD 3.2 million), USD 17,000, and a vehicle valued at RMB 340,000 (USD 54,832). Further, Zhu illegally embezzled RMB 450,000 from public funds, and held properties without clear sources exceeding RMB 13.73 million (USD 2.21 million), USD 70,000, and JPY 40,000 (USD 322). Zhu was given a reduced sentence due to his confession and return of illegal gains.

(2) On May 5, 2015, Xie Xingchang (“Xie”), the former Deputy District Dead of Keqiao District, Shaoxing City, Zhejiang Province, was sentenced by the Intermediate People’s Court of Shaoxing City, Zhejiang Province to life imprisonment for taking bribes exceeding RMB 13 million (USD 2.09 million). He was also deprived of political rights for life and all his personal properties were confiscated after the first trial.

During his term in office from 2003 to 2014, Xie took advantage of his position to seek illegal benefits for several companies with respect to the transfer of land use rights, the development and construction of real estate projects, the grant of governmental preferential policies, and project contracting. In exchange, Xie repeatedly accepted or demanded bribes valued at RMB 13 million (USD 2.09 million), USD 10,000, and EUR 3,000 (USD 3407) from the chairman or other controlling person at these companies. As of the judgement date, part of the bribes, i.e., RMB 6.5 million (USD 1.04 million), have been recovered by the state.

(3) On May 7, 2015, Zhou Jianming (“Zhou”), the former President of the Intermediate People’s Court of Ankang City, Shan’xi Province (the “Court”), was sentenced to 11 years in prison by the Intermediate People’s Court of Xi’an City, Shan’xi Province for taking bribes after his first trial. His personal property valued at RMB 120,000 (USD 19,342) was confiscated and all the bribes totaling at RMB 1.693 million (USD 272,895) have been recovered.

Allegedly, during his term in office from April 2010 to January 2012, Zhou sought illegal benefits for several construction contractors and equipment suppliers by taking advantage of his position as the head of the group leading the construction project for court building complex. In return, Zhou illegally accepted money and other properties valued at RMB 1.693 million (USD 272,895) from the bribe-givers. Zhou was given a lighter sentence due to his confession and good attitude and the return of all the bribes.

(4) On May 18, 2015, Miao Yongmou (“Miao”), the former Deputy Director of Nantong Meteorological Bureau, was sentenced to 8 years’ imprisonment for taking bribes by the Intermediate People’s Court of Nantong City, Jiangsu Province plus confiscation of property valued at RMB 250,000 (USD 40,325).

It was reported that Miao took advantage of his position and accepted bribes aggregating to RMB 1.124 million (USD 181,301). After the case came to light, Miao surrendered all ill-gotten gains and confessed his crime.

(5) On May 29, 2015, Tian Yulin (“Tian”), the former Mayor of Tonghua City, Jilin Province, was sentenced to death by the Intermediate People’s Court of Songyuan City, Jilin Province for accepting bribes, with a two-year reprieve.

Tian was found guilty of soliciting and taking bribes totaling RMB 44.22 million (USD 7.13 million) during his term in office from October 2007 to August 2013, among which RMB 35.74 million (USD 5.76 million) was solicited from others. Tian appealed in court.

4. Other

(1) On May 15, 2015, the Supreme People’s Procuratorate promulgated the Notice of Participation into the Battle against the Transfer of Bribes through Offshore Companies or Illegal Private Banks (the “Notice”). This Notice requires the procuratorial organs at all levels (the “Organs”) to block the so-called slush funds from being transferred overseas. For those bribes already-transferred overseas (whether properties or money) or in those situations where the suspect has fled abroad, the Organs are to timely issue an international “red wanted notice” or request for judicial assistance depending on the circumstances.
5. China-related FCPA Action

No developments.

Monthly China Anti-Bribery Update Report — April 2015

Posted in Uncategorized

1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules:

(1) On April 27, 2015, the General Office of the Communist Party of China (“CPC”) promulgated the Nomination and Inspection Rules of Secretary and Deputy Secretary of Discipline Inspection Commission at Provincial (Autonomous Regions or Municipalities) Level (for Trial Implementation), Nomination and Inspection Rules of Leader and Deputy Leader of the Discipline Inspection Commission designated by Central Commission for Discipline Inspection (“CCDI”) (for Trial Implementation), and Nomination and Inspection Rules of Secretary and Deputy Secretary of the Enterprises under the Management of Central Government (for Trial Implementation) (collectively the “Rules”).

The Rules emphasize that candidates for discipline inspection leaders must be selected from among excellent cadres with outstanding performance in building the Party’s clean and honest style within or outside of the discipline inspection system. The Rules also detail the requirements and procedures for the selection of such leaders to ensure a solid discipline inspection team for the anti-corruption campaigns.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) On April 7, 2015, Ji Jianye (“Ji”), the former Mayor of Nanjing City, Jiangsu Province, was sentenced to 15 years imprisonment for taking bribes by the Intermediate People’s Court of Yantai City, Shandong Province plus confiscation of personal property totaling RMB 2 million (USD 321,602).

During his term of office from the end of 1999 to September, 2012, Ji reportedly accepted bribes exceeding RMB 11.32 million (USD 1.82 million) in the forms of cash, painting, vehicle, lower purchase price for real estate, and free fit-outs on 21 occasions from seven individuals. In exchange, he sought illegal benefits for bribe-givers in job promotion, project contracts, etc. Ji was given a lighter sentence due to his confession and return of illegal gains.

(2) On April 9, 2015, Liao Shaohua (“Liao”), the former Member of the Standing Committee of CPC Guizhou Provincial Committee and former Party Secretary of CPC Zunyi Municipal Committee, was sentenced by the Intermediate People’s Court of Xi’an City, Shanxi Province to 16 years in prison for taking bribes and abusing power.

Liao was charged with abusing his position to seek illegal benefits for 11 bribe-givers in exchange of bribes of up to RMB 13. 24 million (USD 2.12 million) and with having caused the state to suffer losses in financial funds of RMB 3.1 million (USD 498,484). Liao was given a lighter sentence due to his confession.

(3) On April 17, 2015, Chen Bohuai (“Chen”), the former Deputy Chairman of the Chinese People’s Political Consultative Conference (“CPPCC”) Hubei Committee, was sentenced to 17 years imprisonment by the Intermediate People’s Court of Fuzhou City, Fujian Province for abusing his power and taking bribes. His personal property valued at RMB 300,000 (USD 48,240) was confiscated.

Allegedly, during his term as the Deputy Chairman of CPPCC Hubei Committee and the Deputy Director-general of Hubei Agriculture Department, Chen sought personal gain by authorizing and approving the illegal transfer of state-owned land use rights owned by the subordinate entity to Hubei Agriculture Department for the purpose of profit-making business, which resulted in losses totaling RMB 610 million (USD 98.08 million) for the state. Meanwhile, Chen was also found guilty of taking advantage of his position to accept bribes from others amounting to RMB 2.83 million (USD 455,068).

(4) It was reported on April 28, 2015 that Liu Xueku (“Liu”), the former Director of Hebei Development and Reform Commission (“HDRC”), was sentenced by the Intermediate People’s Court of Handan City, Hebei Province to 18 years in prison plus confiscation of personal property up to RMB 1 million (USD 160,801) and a penalty of RMB 500,000 (USD 80,400) for taking bribes, holding large amounts of unidentified property and insider trading.

According to the court, Liu took advantage of his positions as Deputy Director of HDRC from 2004 to 2006 and then as the Director of HDRC from 2011 to 2013, seeking illegal benefits for Ma Jianguo in project contracting and settlement and for Jiang Xiaodong in applications for provincial key projects. In return, Liu, along with his wife and son, jointly and illegally accepted money and other properties from above individuals totaling RMB 11.14 million (USD 1.83 million). Reportedly, the property and expenses of Liu’s family have apparently exceeded the family’s total legitimate income. Liu was also found guilty of disclosing inside information to others for insider security trading.

(5) On April 29, 2015, Xu Biao (“Xu”), the former Deputy General Manager of Chendu Industry Investment Group Co., Ltd and the former Director of the Finance Bureau of Qingbaijiang District, Chengdu City, was sentenced to 12 years and 6 months imprisonment for accepting bribes by the Intermediate People’s Court of Chengdu, Sichuan Province.

Xu was found guilty of taking advantage of his position in order to seek illegal benefits for others as the exchange of bribes amounting to RMB 2.7 million (USD 434,163) during his term from 1998 to 2013 successively as officer of Finance Bureau of Qingbaijiang District and senior management of several Chengdu based state-owned enterprises.
4. Other

(1) On April 20, 2015, the Central Commission for Discipline Inspection of CPC published another 112 cases on its official website in relation to the violation of the Eight-Point Code. Published cases involve 28 provincial administrative regions plus Xinjiang Production and Construction Corps, State Tobacco Monopoly Administration and China National Offshore Oil Corporation. Typical issues arising from such cases are illegal allocation of allowances and subsidies, illegal gains of gifts and money, travels by public funds, extravagant funerals and weddings, illegal use of company’s vehicle, and entertainment using public funds, etc. Beijing, Guizhou, and Shaanxi rank as the 3 provincial regions with the most cases (8 cases respectively) published this time.
5. China-related FCPA Action

No developments.

Monthly China Anti-Bribery Update Report — March 2015

Posted in Uncategorized

1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) It was reported on March 2, 2015 that Fu Chunrong (“Fu”), the former Party Secretary of Huichang County, Jiangxi Province, had been sentenced by the Intermediate People’s Court of Ganzhou City, Jiangxi Province to 13 years in prison for taking bribes.

Fu was found guilty of accepting bribes from 38 individuals amounting to RMB 4.45 million (USD 716,505), ERU 30,000 (USD 31,929), HKD 310,000 (USD 40,000) and USD 25,000 during his term of office from 2000 to 2014. In exchange, Fu took advantage of his position, seeking illegal benefits for 22 construction contractors and private business owners in project awarding and development, and 16 state functionaries in position promotions. Fu was given a lighter sentence due to his confession.

(2) On March 19, 2015, Chen Haiju (“Chen”), the former Deputy General Manager of China Eastern Airlines, a state-owned enterprise based in Shanghai, was sentenced to life imprisonment by the No. 1 Intermediate People’s Court of Shanghai for taking bribes, and all his personal property was confiscated.

It was alleged that during his term from 2001 to 2013 as the Director of the Air Traffic Management Bureau of the Civil Aviation Administration of China and the senior management of China Eastern Airlines Chen had sought illegal benefits from project contracting, Chen accepted bribes from several individuals exceeding RMB 4.86 million (USD 782,520). Chen denied all his crimes at the trial last April.

(3) It was reported on March 24, 2015 that Zhang Zhijian (“Zhang”), the former Party Secretary of Hainan College of Economics and Business (the “College”), had been sentenced to 12 years’ imprisonment by the Intermediate People’s Court of Haikou City, Hainan Province for accepting bribes.

Zhang was accused of abusing his power over the construction of the teaching building, administrative building, the library, others, and of seeking illegal benefits for bribe-givers, and accepting bribes totaling RMB 4.51 million (USD 726,288) over 16 occasions. Zhang was given a lighter sentence due to his confession and otherwise meritorious behavior.

(4) On March 27, 2015, Liao Xiaobo (“Liao”), the former Deputy Chief of the Development and Reform Commission of Guangxi Zhuang Autonomous Region, was sentenced to life in prison for accepting bribes by the Intermediate Peoples’ Court of Nanning City, with all his personal property confiscated.

Liao was accused of accepting bribes totaling RMB 32.21 million (USD 5.18 million), HKD 405,500 (USD 52,322) and USD 340,000 in the forms of cash, shopping cards, golf cards, luxury watches, etc. during his term of office from 2006 to 2013. In return, Liao is reported to have provided assistance in project negotiations, contract awarding and project approval in relation to infrastructure construction projects, abusing his position. Liao was expelled from his position and from the Party in October, 2013 for severe violations of law and disciplines.

4. Other

(1) According to Yu Zhengsheng (“Yu”), the Chairman of the 12th National Committee of the Chinese People’s Political Consultative Conference (CPPCC) from his work report of the CPPCC National Committee’s Standing Committee at the third session of the 12th CPPCC National Committee on March 3, 2015, 14 members have been expelled from the 12th CPPCC since 2013, including two Deputy Chairmen, Ling Jihua and Su Rong. Yu said, “Further efforts should be taken to build a fine Party culture, keep its organizations clean and crackdown corruption.”

(2) According to a work report delivered by Cao Jianmin (“Cao”), the Procurator-General of the Supreme People’s Procuratorate (the “SPP”) on March 12, 2015 during the third session of the 12th National People’s Congress, during the year of 2014, the national-wide procurators have investigated 41,487 duty-related crimes cases involving 55,101 individuals, an increase of 7.4% in the number of people, including 28 officers at or above provincial and ministerial level. 7,827 individuals who committed bribery related crimes have been prosecuted, an increase of 37.9% compared with the previous year. The SPP will continue focusing on duty-related crimes in the following year, according to Cao.

5. China-related FCPA Action

No developments.

UK company director jailed for bribing public officials in Africa

Posted in Africa, Courts, UK Bribery Act, United Kingdom

In order to win a contract worth £2.26m for making ballot papers, Smith and Ouzman Ltd, a printing firm based in Sussex, gave £395,074 in corrupt payments to public officials in Kenya and Mauritania.

In February 2015, Southwark Crown Court jailed Nicholas Smith, the Sales and Marketing Director, for three years and handed his father, Christopher Smith, Chairman, an 18-month suspended term, 250 hours of unpaid work and a three month curfew. Both have resigned from the company and were disqualified from acting as directors for 6 years. The International Sales Manager and a Sales Agent were both acquitted of making corrupt payments in relation to a contract in Somaliland.

As the payments in question took place before the Bribery Act 2010 came into force, both were convicted of the old (pre-Bribery Act 2010) offence of corruptly agreeing to make payments (three counts and two counts respectively).

The Company was convicted of the same offence but will not be sentenced until October 2015, at which point confiscation proceedings will also take place, meaning that Smith and Ouzman Ltd will face not only an unlimited fine but the financial benefit they gained from the corrupt payments (i.e. the value of the contract) could be confiscated.

Following the conviction, Director of the SFO, David Green CB QC commented: “This is the SFO’s first conviction, after trial, of a corporate for offences involving bribery of foreign public officials. Such criminality, whether involving companies large or small severely damages the UK’s commercial reputation and feeds corrupt governance in the developing world.”

Monthly China Anti-Bribery Update Report — February 2015

Posted in Uncategorized

1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) On February 6, 2015, Ma Yingkui (“Ma”), the former Deputy Chief of the Standing Committee of People’s Congress of Heping District, Shenyang City, Liaoning Province, was sentenced to 13 years in prison for taking bribes exceeding RMB 5.2 million (USD 828,916) and abuse of power by the Intermediate People’s Court of Dandong City, Liaoning Province.

Allegedly, from 2012 to the first half year of 2013, Ma has accepted RMB 1.32 million (USD 210,417), USD 40,000 and shop cards valued at RMB 100,000 (USD 15,940) from an individual named Shi Haiying (“Shi”) on several occasions, and provided assistance for Shi in obtaining illegal demolition compensation for three affiliated companies of Shi exceeding RMB 100 million (USD 15.94 million).

In 2012, Ma accepted RMB 600,000 (USD 95,644) from the chairman of Shenyang Lexi Printing Co., Ltd., an individual surnamed Quan, and sought illegal benefits in demolition and relocation of the company’s plant. Ma was also found guilty of taking bribes on another 30 occasions by abusing his power from 2004 to 2013.

(2) It was reported on February 11, 2015 that Qi Pingjing (“Qi”), the former Deputy Director of China Foreign Languages Publishing Administration, was sentenced to life imprisonment with all his personal property confiscated for accepting bribes and embezzlement by the Intermediate People’s Court of Zibo City, Shandong Province.

Qi was accused of seeking illegal benefits for bribe-givers in raising money for registered capital, real estate purchase, job arrangement, etc. by abusing his position, and accepted bribes amounting to RMB 10.04 million (USD 1.6 million) during his term of office from 2000 to early 2013. Besides, Qi was charged of illegally embalming RMB 600,000 (USD 95,644) in the name of construction payment to a construction company based in Tianjin in the second half year of 2003.

(3) On February 13, 2015, Yang Yueguo (“Yang”), the former Chairman of the People’s Political Consultative Conference of Dehong Dai and Jingpo Autonomous Prefecture, Yunnan Province, was sentenced to life in prison for taking bribes and embezzlement by the Intermediate Railroad Transportation Court of Kunming City, Yunnan Province, with all his personal property confiscated.

Reportedly, during his term of office from 2003 to 2013, Yang has accepted bribes totaling RMB 21.2 million (USD 3.37 million) from several individuals and enterprises, and in exchange, sought illegal benefits in grant of state-owned land use right, coordination of construction project and job promotion for bribe-givers by taking advantage of his position. Yang was also found guilty of embezzling the jadeite products valued at RMB 200,000 (USD 31,881) purchased by public funds in February, 2012. Yang was given a lighter sentence due to his confession.

(4) On February 15, 2015, Huang Fengping (“Huang”), the former Deputy Chief of Shanghai Municipal Commission of Health and Family Planning, was sentenced to 19 years in jail by Shanghai No. 1 Intermediate People’s Court for embezzlement, taking bribes, misappropriation and holding a large amount of property from unidentified sources.

Huang, a well-known neurosurgeons in China, was found guilty of embezzling public funds of RMB 70,000 (USD 11,162) and taking bribes exceeding RMB 301 million (USD 479,998) by abusing his position. During Huang’s term of office as the chairman of Chinese Neurosurgical Society of Chinese Medical Association (the “Association”), he misappropriated properties of the Association worth over RMB 1.41 million (USD 224,849). Furthermore, the sources of his properties valued at RMB 11 million (USD 1.75 million) were unable to be explained. Huang was given a lighter sentence due to his confession.

(5) On February 28, 2015, Ni Fake (“Ni”), the former Deputy Governor of Anhui Province was sentenced to 17 years’ imprisonment by the Intermediate People’s Court of Dongying City, Shandong Province for accepting bribes and holding a large amount of property from unidentified sources, with his personal property valued at RMB 1 million (USD 159,480) confiscated.

Ni was charged of accepting, solely or together with other individuals, cash and jades worth RMB 12.96 million (USD 2.06 million) from 9 individuals on 49 occasions from 2000 to 2012 by taking advantage of his position, and sought illegal benefits for the relevant entities. Ni also failed to explain the sources of his personal property amounting to RMB 5.78 million (USD 921,798). Ni was given a lighter sentence due to his confession and return of illegal gains.

4. Other

(1) On February 6, 2015, the U.S. Securities and Exchange Commission (the “SEC”) announced that the China-based counterparts of the “Big Four” accounting firms (Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers) have reached an agreement with the SEC with regard to their refusal to reveal their clients’ auditing documents to the SEC. According to the SEC, the Big Four has agreed to pay USD 500,000 respectively and admitted that they had failed to provide required documents to the SEC before 2012 when the proceeding was brought against them by the SEC. The Big Four eventually started providing the required documents to SEC, and were required to take specific measures to satisfy the requests from SEC for similar documents in the following four years.

5. China-related FCPA Action

No developments.

Pursue, Prevent, Protect and Prepare – The UK Government’s Anti-Corruption Plan

Posted in Commercial Bribery, Compliance Program, UK Bribery Act, United Kingdom

The UK Anti-Corruption Plan, published in late 2014, sets the strategic direction for anti-corruption activity in the UK.

It contains 66 action points that the UK government will undertake by the end of 2015 in line with four components:

  • Pursue – prosecuting and disrupting people engaged in corruption;
  • Prevent – preventing people from engaging in corruption;
  • Protect – increasing protection against corruption; and
  • Prepare – reducing the impact of corruption where it takes place.

The Plan states that the immediate priorities in the UK are to: Build a better picture of the threat from corruption and the UK’s vulnerabilities; Increase protection against the use of corruption by organised criminals and strengthen integrity in key sectors and institutions, including the criminal justice system and regulated professions; and Strengthen law enforcement response so that the UK can pursue, more effectively, those who engage in corruption or launder their corrupt funds in the UK. The international priorities are to engage with overseas partners to: Improve transparency, tackle money-laundering and return stolen assets; Raise global standards for all, including through our international development programmes; and Promote sustainable growth, including through our work to stop bribery.

The Plan sets 66 specific actions to achieve these objectives. These actions include the following:

  • Examine the merits of a new “failure to prevent economic crime” offence, which would be similar to section 7 of the Bribery Act 2010 (the corporate offence of failing to prevent bribery by associated persons) but be wider in scope, covering, for example, fraud and money laundering, for which it would be a defence to have adequate procedures in place to prevent such crime.
  • Consider how to encourage whistle blowers to report bribery and corruption and develop a model for a single reporting mechanism for allegations of corruption.
  • Create a new central bribery and corruption unit within the National Crime Agency.
  • Recruit specialists into enforcement agencies to support corruption investigations.
  • Increase the powers of enforcement agencies to investigate financial crime.

It also contains a number of actions to try to combat corruption in specific sectors, such as defence and sport.

It is a positive step in the fight of global corruption that, despite the UK having low levels of corruption compared to many other countries, the UK government still sees room for improvement and recognises its role in helping tackle corruption overseas. The 66 action points seem ambitious but if they can be achieved, the UK really would be leading the fight against corruption.