Header graphic for print

The Anticorruption Blog

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.

Monthly China Anti-Bribery Update Report — January 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 January 4, 2015 that Xu Meng (“Xu”), the former Party Secretary of Ya’an City, Sichuan Province, had been sentenced by the Intermediate People’s Court of Dazhou City, Sichuan Province to 16 years in prison for taking bribes and abuse of power.

 

Xu was found guilty during his term in office from May 2009 to November 2013 of accepting, together with his brother, bribes totaling RMB 5.48 million (USD 877,579) in the form of cash, company equity, vehicles, etc. from various enterprise located in Hainan Province and Sichuan Province. In exchange, Xu abused his position to seek illegal benefits in real estate developments for the bribe givers. Xu was given a lighter sentence due to his confession.

 

(2) It was reported on January 7, 2015 that Lu Zhanglei (“Lu”), the former Chief of the Management Station of Fishery Administration and Fish Ports of Wenchang City, Hainan Province, was sentenced to 12-years’ imprisonment by Hainan No. 1 Intermediate People’s Court for accepting and giving bribes.

 

Reportedly, in 2006, Lu, together with others, accepted bribes from several individuals totaling RMB 1.89 million (USD 302,891) and sought illegal benefits for the briber givers with respect to the distribution of fishery tools, the annual inspection of fishery vessels, and granting exceptions for fishing during periods of fishing moratorium, etc. To shield against sanction, Lu offered bribes to the then Director of Ocean and Fishery Bureau of Wenchang, Lin Zhitie (“Lin”) at the end of each fishing moratorium from 2007 to 2011. The bribes aggregated to RMB 170,000 (USD 27,244). Lu said at the hearing that he plans to appeal.

 

(3) On January 12, 2015, Luo Guoqing (“Luo”), a former Member of Communist Party of China (“CPC”) Quanzhou Standing Committee and Party Secretary of Quanzhou, Fujian Province, was sentenced by the Intermediate People’s Court of Longyan City, Fujian Province to 15 years in prison for accepting bribes, and Luo’s personal property valued at RMB 2 million (USD 320,284) was confiscated.

 

Reportedly, during his term of office from 2005 to 2011, Luo sought illegal benefits for bribe-givers by abusing his position, and accepted bribes amounting to RMB 9.09 million (USD 1.45 million). Luo was given a lighter sentence due to his confession and return of illegal gains.

 

(4) On January 13, 2015, Zhu Yongguo (“Zhu”), a former Office Chief of Economic and Information Commission of Anhui Province, was sentenced to 15 years’ imprisonment by the Intermediate People’s Court of Xuancheng City, Anhui Province, with the confiscation of personal property of RMB 750,000 (USD 120,106).

 

Zhu reportedly solicited and accepted bribes during his term of office up to RMB 5.97 million (USD 956,048), including RMB 5.41 million (USD 866,369), ERU 17,000 (USD 19,465), USD 13,000, shopping cards valued at RMB 290,000 (USD 46,441), and two gold bars of 50 grams and 20 grams respectively.

 

4. Other

 

(1) On January 13, 2015, PRC President Xi Jinping (“Xi”) gave a speech related on anti-corruption at the fourth plenary session of the 18th CPC Central Commission for Discipline Inspection. The speech emphasized that the country holds a “zero-tolerance attitude” towards corruption, and the high pressure on cracking down corruption will be continued. The examination of the leadership of state-owned enterprises, according to Xi, will be further strengthened, and a certain number of important Party rules and regulations will be revised to regulate Party members more efficiently.

 

(2) According to a press conference held by the Supreme People’s Procuratorate on January 19, 2015, since the initiation of certain special actions in October 2014 to pursue job-related criminal suspects who have fled or transferred ill-gotten properties abroad, the nationwide procuratorate organs have captured 49 suspects as of December 31, 2014, among whom 11 are suspected of embezzlement and 31 are suspected of bribery.

 

5. China-related FCPA Action

 

No developments.

 

 

2014 Corruption Perceptions Index

Posted in Commercial Bribery

Transparency International recently released its 2014 Corruption Perceptions Index. The Index is an excellent tool for identifying geographic areas that generally present corruption-related risks and where companies are likely to encounter corruption-related challenges. Twelve data sources were used to develop the 2014 Index, including ratings and assessments from the African Development Bank, the Economist Intelligence Unit, and the World Bank.

The Index has scores ranging from zero through one hundred, with the low end of the scale indicating a country to be highly corrupt, and a high score suggesting that a country is very clean. No country received a perfect score. Denmark had the highest score with ninety-two. The bottom ten countries were Eritrea, Libya, Uzbekistan, Turkmenistan, Iraq, South Sudan, Afghanistan, Sudan, North Korea, and Somalia. Continue Reading

Monthly China Anti-Bribery Update Report — December 2014

Posted in China

1. New law or regulation

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

 

2. Upcoming law or regulation

No developments.

 

3. Government Action

(1) On December 5, 2014, Zhang Xiaodong (“Zhang”), the former Party Secretary of Anyang City, Henan Province, was sentenced for taking bribes by the Intermediate People’s Court of Zhumadian City, Henan Province to life in prison plus confiscation of all personal property. Continue Reading

The UK Bribery Act – what to expect in 2015

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

We have reported previously that the UK’s Serious Fraud Office (SFO) has confirmed its commitment to prosecuting bribery and corruption and that although there is yet to be a “big case” under the UK Bribery Act 2010, the SFO are busy investigating companies it suspects may have broken the law. As we approach the end of 2014, it is interesting to reflect on what we can expect over the coming year.

Following a statement made by the UK Home Secretary Theresa May, there has been talk about the responsibilities of the SFO being transferred to the National Crime Agency (NCA), established in October 2013 to target the criminals and groups posing the biggest risks to the UK. This would mean that all white-collar crime was under the same control, removing the split where the budget of the NCA is controlled by the Home Office controls but the budget of the SFO is controlled by the attorney-general’s office. The chairman of the SFO, David Green CB QC’s opinion is that this is “just not sensible”, given the upheaval and uncertainty that this would bring, with no guarantee of better results, and that there is a need for the regulator of top end bribery to remain independent from the government and have these types of offences as its top priority.

There has been some concern that the lack of enforcement under the Bribery Act by the SFO could be due to the fact that the SFO’s budget was cut from £52million in 2008 to £32million in 2014. The SFO have dealt with this by using blockbuster or ring-fenced funding to ensure its most expensive investigations can continue. Continue Reading

Monthly China Anti-Bribery Update Report — November 2014

Posted in China

1. New law or regulation

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

 

2. Upcoming law or regulation

No developments.

 

3. Government Action

(1) On November 4, 2014, Yang Xianjing (“Yang”), the former Inspector of the Department of Land and Resources of Anhui Province, was sentenced by the Intermediate People’s Court of Bengbu City, Anhui Province to life in prison for abuse of power and taking bribes, with confiscation of all his personal property.

Yang was accused of taking advantage of his position from 2007 to 2011, illegally separating, renewing, and transferring the exploration rights of several mines, causing the state to suffer economic losses exceeding RMB 189,000 (USD 30,696). Continue Reading

Russia Data Privacy Update – New Regulations

Posted in Russia

In July 2014 Russia enacted Federal Law No. 242-FZ which introduced new requirements for storage of personal data of Russian citizens (the “Amendment”). The Amendment will become effective September 1, 2016. The purpose of the Amendment is two-fold:

No. 1: It amends Federal Law No. 152-FZ “On Personal Data” dated July 27, 2006 (the “Personal Data Law”) by introducing new obligations with regard to the storage of Russian citizens’ personal data.

No. 2: It amends Federal Law No. 149-FZ “On Information, Information Technology and Protection of Information” dated July 27, 2006 (the “Information Law”) by introducing a mechanism for the regulator, i.e. the Federal Service for Supervision of Communications, Information Technology and Mass Media (the “RKN”), to block websites that process personal data of Russian citizens in violation of the Russian data protection laws.

Our findings include, among others, that the Amendment applies to non-Russian companies, regardless of their presence in Russia.

Click here to learn more.

China Data Privacy Update

Posted in China

Peter William Humphrey, a British citizen, and his American wife, Yu Yingzeng, were prosecuted on August 8, 2014 in Shanghai No.1 Intermediate People’s Court for illegally obtaining the personal information of Chinese citizens. The court sentenced Mr. Humphrey to a fixed-term imprisonment of two and one-half years, a fine of RMB 200,000, and deportation from China after serving the imprisonment term; and sentenced Yu Yingzeng to a fixed-term imprisonment of two years plus a fine of RMB 150,000.

Before they were arrested in August 2013, the couple operated a business risk advisory firm in Shanghai known as ChinaWhys. This was only weeks after the firm delivered an investigation report to the British pharmaceutical company GlaxoSmithKline (“GSK”) China. Inevitably, their detention became linked with the GSK China bribery scandal, but the case has implications for China’s emerging data protection and privacy regime.

The PRC criminalized the sale of personal information in the seventh amendment to the PRC Criminal Law on February 28, 2009. Continue Reading

Monthly China Anti-Bribery Update Report — October 2014

Posted in China

1. New law or regulation

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

 

2. Upcoming law or regulation

(1) It was reported on October 27, 2014 that the Draft Ninth Amendment to Criminal Law (the “Draft Amendment”) was under review by the National People’s Congress Standing Committee. The Draft Amendment proposes to increase the penalties for the crime of bribery and remove the specific monetary criteria for deciding the level of punishment. According to the Draft Amendment, sentencing would be made according to both the amount of money involved and the severity of the crime. Continue Reading

GSK BRIBERY CASE – END OF THE MATTER?

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

This article was originally published by LexisNexis and is reproduced with permission.

GlaxoSmithKline (GSK) has been fined £300 million and five of its employees given suspended prison sentences in China for bribery – but is this the end of the matter? What impact will the verdicts have on other multinational companies conducting business in China?

Proceedings Against GSK and its Employees in China

On September 19 the Changsha Intermediate People’s Court in Hunan province found that GSK had “offered money or property to non-government personnel in order to obtain improper commercial gains” by paying hundreds of millions of pounds worth of bribes, via travel agencies, to doctors, health officials and hospitals in order to use GSK’s products.

At the start of the investigation last year, Gao Feng, the head of China’s fraud unit, reportedly said: “We found that bribery is a core part of the activities of the company. To boost their share prices and sales, the company performed illegal actions.” It was alleged that pay/bonus packages focused too heavily on sales performance, which reportedly encouraged people to engage in bribery, and that knowledge of the bribery that was occurring was widespread across the organization (with departments beyond the sales teams having some level of involvement). GSK employee Mark Reilly (who we understand returned to China to assist Chinese authorities with their investigation) was given a three-year suspended sentence and a deportation order. Four Chinese GSK defendants – Liang Hong (Head of Operations), Zhao Hongyan (Legal Counsel), Zhang Guowei (Head of Human Resources) and Huang Hong (Head of Business Development) – were also given suspended sentences. All five individuals had entered guilty pleas. Continue Reading