Last month, Dutch telecom company, VimpelCom Limited, agreed to pay $795 million in penalties to U.S. and Dutch authorities for bribing government officials in Uzbekistan, in violation of the U.S. Foreign Corrupt Practices Act (“FCPA”) and Dutch law. VimpelCom’s CEO is facing criminal charges, government forfeiture actions were launched to recover hundreds of millions of dollars, and an independent monitor was appointed to supervise the company for at least three years.
While that case sounds egregious, massive penalties for corporate bribery are common. In recent years, Siemens AG was fined $800 million in the U.S. and $800 million in Germany for paying bribes in Argentina; Alston SA was fined $774 million for bribery in several countries; a Chinese court fined GlaxoSmithKline $500 million for bribing doctors in China; BAE settled bribery charges for $400 million; Alcoa for $380 million and Hewlett-Packard for $108 million. Continue reading →
Corporate bribery is in the headlines. Last week, the media was reporting accusations that Hong Kong’s top government official took $6.4 million in bribes from an Australian engineering firm. Before that, a top official in China’s central planning commission admitted taking $5.8 million in bribes from Toyota and other companies, and a Chinese court fined GlaxoSmithKline (“GSK”) $500 million for bribing doctors. Before that, Alcoa settled bribery charges in the U.S. for $380 million, while Hewlett-Packard settled charges for $108 million.
Each time, the news is followed by a flurry of articles from corporate compliance experts urging companies to take ethics and compliance more seriously, including obtaining full support of the CEO and Board, assigning oversight responsibility to high-level personnel, allocating resources, implementing policies and procedures, providing regular education and training, incentives and discipline, performing continuous auditing, monitoring and fine-tuning, and responding promptly to any violations.
Some may feel that’s a bit much, that, “Our company values ethics and integrity, but can’t afford a full-blown compliance program.” In truth, most global companies can’t afford not to implement such measures, and it’s not just about bribery. Below are some reasons why companies should honestly assess their compliance programs and make earnest efforts to plug any gaps. Continue reading →