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RTX compliance fines now top $1 Billion.

Compliance-challenged defense contracting giant RTX has agreed to pay nearly $1 billion to settle charges of government contract fraud, foreign bribery, and export control violations. The settlement comes on the heels of a $200 million settlement in August with the State Department [12717] for a raft of export control violations. Raytheon will enter into a three-year deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Massachusetts charging the firm with two counts of major fraud against the United States. As part of that resolution, Raytheon admitted to engaging in two separate schemes to defraud the Department of Defense (DOD) in connection with the provision of defense articles and services, including PATRIOT missile systems and a radar system. Separately, Raytheon entered into a three-year DPA in connection with a criminal information unsealed today in the Eastern District of New York charging Raytheon with two counts: conspiracy to violate the anti-bribery provision of the FCPA for a scheme to bribe a government official in Qatar and conspiracy to violate the AECA for willfully failing to disclose the bribes in export licensing applications with the Department of State as required by part 130 of ITAR.

FCPA Enforcement Up Some, Still Down

After a particularly slow second quarter, FCPA enforcement activity picked up between July and September of 2024, with the DOJ initiating one new FCPA-related enforcement action, unsealing two previously filed actions, and issuing one declination letter, according to a tally from Stanford University's FCPA Clearinghouse. "Enforcement activity through Q3 of this year remained well below even the last three years of lower than average enforcement" the report notes

Deere Thai Acquisition Yields FCPA Settlement

The Securities and Exchange Commission announced that Deere & Company, which does business as John Deere, agreed to pay nearly $10 million to resolve SEC charges that it violated the Foreign Corrupt Practices Act (FCPA) arising out of bribes paid by its wholly owned subsidiary, Wirtgen Thailand. Thailand employees bribed Thai government officials with the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads to win multiple government contracts and also bribed employees of a private company to win sales to that company.

Houston Trader Pleads Guilty in PEMEX Bribery Case

A Texas commodity trader pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and engaging in interstate and foreign commerce to promote and to distribute the proceeds of commercial bribery for paying bribes to officials at the Mexican state-owned oil company, PEMEX. The plea follows Javier Aguilar's conviction earlier this year in a related case for paying bribess to Ecuadorian officials and laundering the funds for both the Ecuadoran and Mexican schemes.

Minister Convicted in Tuna Bond Case

A federal jury in Brooklyn, New York, convicted the former Finance Minister of Mozambique for his role in a $2 billion fraud, bribery, and money laundering scheme that victimized investors in the United States and elsewhere. According to court documents and evidence presented at trial, Manuel Chang, 68, of Mozambique, received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects.

Voting Machine Executives Charged in Philippine Bribes

Three executives of the Smartmatic voting machine company and the former Chairman of the Phillipine Commission on Elections were indicted Thursday for their roles in an bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections.

Nepal Bribery Snares Aircraft Service Exec

Illinois aviations services provider AAR appears close to resolving bribery allegations involving the sale of used Airbus A330s at inflated prices to the Nepal Airlines, the flag carrier of Nepal. A July 19 plea deal reached by Deepak Sharma, former President of International Supply Chain for AAR was usealed in the District of Columbia. Sentancing is forthcoming. On April 4, Nepal’s anti-graft body completed its five-year probe into the $209.6-million Airbus deal, the largest ever in Nepal’s aviation history. The body concluded that Nepal Airlines' procurement of two wide-body jets caused the government a loss of $13.38 million. The case has implicated 32 individuals.

FCPA Enforcement Takes a Breather

Neither the SEC nor the DOJ filed a new FCPA Enforcement Action in the second quarter of 2024, which is relatively rare, according to a report from Stanford University's FCPA Clearinghouse. The last time a quarter passed without a single new enforcement action was in 2013, and before that, in 2003. Enforcement activity in the first six months of the year was the lowest recorded in almost two decades.

Polite Bowing Out with a Bang

Departing Assistant Attorney General for the Criminal Division Kenneth Polite told Reuters the department’s enforcement pipeline has several more “global resolutions,” or large corporate settlements pending in coming months. Mr. Polite, who will be joining Sidley Austin in October after overseeing corporate resolutions such as Glencore, ABB, Danske, and Stericycle attributed the backlog to COVID related- delays. Polite said to expect "much larger schemes and activities."

Oil Services Firm Settles Over Angolan Bribery

The U.S. Securities and Exchange Commission (SEC) has settled violations of the Foreign Corrupt Practices Act (FCPA) with Frank's International, a global oil services company. Between January 2008 and October 2014, Frank's paid commissions to a sales agent in Angola, knowing there was a high probability the agent would use the funds to bribe Angolan government officials on behalf of the company.

Dirty Miner gets Clean Slate from Justice

A Pennsylvania coal miner formerly controlled by Texas buyout firm Quintana Capital has been given a pass on prosecution for FCPA violations involving $143 million in coal sales to Egypt in exchange for a $1.2 million payment to the Department of Justice Fraud Division.

FCPA / Justice Buries the Hatchet with Ericsson

Swedish Telecoms giant and serial FCPA violator LM Ericsson signed a new deal with the Justice Department acknowleging further breaches of the deferred prosecution agreement it entered into for corruption in Djibouti, China, Vietnam, Indonesia and Kuwait.

FCPA / Petrobras 'Car Wash' Indictments

A Connecticut man and a foreign national have been charged with conspiracy, multiple counts of violating the Foreign Corrupt Practices Act (FCPA), and money laundering in connection with an alleged …

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Vol 44 No. 43 October 21 2024

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Canadian Firm Gets Reprieve for Reforms; BIS adds 26 to Entity List

Bureau of Industry and Security (BIS) added 26 entities to the Entity List, while giving relief to one Canadian firm for substantive reforms to its business practices. Under the destinations of the People’s Republic of China (PRC) (6), Egypt (1), Pakistan (16), and the United Arab Emirates (UAE) (3), the additions are related to alleged violations of export controls, involvement in weapons programs of concern, and evasion of U.S. sanctions and export controls on Russia and Iran. Sandvine Incorporated, an entity listed under the destinations of Canada, India, Japan, Malaysia, Sweden, and the UAE, has been removed following significant reforms to address and prevent the misuse of its technology in ways that undermine democracy and abuse human rights

Oil Price Cap Update

Treasury's Office of Foreign Assets Control (OFAC) has issued an updated Maritime Oil Industry Advisory for both government and private sector actors involved in the global maritime industry. Prepared by the Price Cap Coalition, (G7, the European Union, Australia, and New Zealand, the Advisory makes ":reccomendations" which are routinely ignored by the relevant players, notably buyers China and India, Convenience Registries (Liberia, Maldives, Eswatini and the like), as well as firms located in G-7, EU or other third countries who disregard "advisories" when there is money to be made. Until the Coalition is willing to take concrete action to halt the shipping in unsafe and underinsured vessels, likely after a catastrophic spill, these exercises are having little to no effect on the flow of Russian Oil into the world market.

No Progress on WTO Big-Ticket Items

The second day of the World Trade Organization’s (WTO) General Council (GC) meeting concluded on a bleak note, with little to no progress on key issues, including agriculture, the second half of the proposed fisheries agreement, and ongoing concerns over reforming the dispute settlement system (DSS), according to people familiar with the discussions. Several members reportedly raised sharp concerns about the lack of progress in elements such as the "scope of the mechanism" and the "standard of review." Developing countries—Egypt, India, Chad (on behalf of the African Group), and South Africa—emphasized the importance of accessibility.

DG's Efforts to Boost Trade Talks

A proposed decision by World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala to establish a formal process under the Committee on Agriculture Special Session (CoA SS) to jumpstart agriculture negotiations has caused unease among several members and raised questions about the integrity of the process, according to people familiar with the developments. Members are working to understand the implications of formalizing the process and appointing facilitators, given that meetings of the Doha negotiating body on agriculture are conventionally held informally. The CoA SS refers to the Doha agriculture negotiating body, which operates under the overarching mandate of the Doha Trade Negotiations Committee.

RAPTAC / Regulations and Procedures Roundup

The Commerce Department’s Bureau of Industry and Security Regulations and Procedures Technical Advisory Committee held their quarterly meeting Tuesday, with a wary eye towards the year end and potential for a change of regime.

"Multilateral" DPRK Sanctions Monitor Planned

The United States, South Korea and Japan announced the formation of a Multilateral Sanctions Monitoring Team (MSMT) on North Korea as an alternative to the dissolved U.N. panel of experts that had monitored sanctions enforcement until April. VOA reports that members of the former U.N. panel of experts said the new mechanism could function effectively but might be hurt by the lack of a United Nations mandate. China and Russia, two of the five veto-wielding Security Council permanent members, will not participate in the newly formed team.

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