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The Morning Risk Report: Updated FCPA Guide Reinforces Broad View of Accounting Provisions
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The second edition of an influential handbook on the U.S. Foreign Corrupt Practices Act incorporates nearly eight years of developments in the antibribery law. PHOTO: MARY F. CALVERT/REUTERS
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Good morning. The second edition of an influential handbook on the U.S. Foreign Corrupt Practices Act incorporates nearly eight years of developments in the antibribery law. It also clarifies the government’s view on controversial aspects of the statute’s enforcement, Risk & Compliance Journal’s Dylan Tokar reports.
The latest edition of “A Resource Guide to the U.S. Foreign Corrupt Practices Act,” released last week, includes more than 2,600 tweaks in both form and content. It summarizes changes to enforcement policies over the past eight years; lists new partner agencies; provides fresh, anonymized case studies of FCPA cases; and updates government practices based on high-profile judicial rulings. It also obliquely responds to criticism of the government’s application of the law.
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The U.S. Department of Justice and U.S. Securities and Exchange Commission, which share responsibility for enforcing the FCPA, released the first edition of the guide in 2012 to educate companies about the law, which prohibits businesses with ties to the U.S. from paying bribes to foreign government officials.
Since then, the agencies have broken the record for the largest corporate settlement under the FCPA several times over, and other countries have passed or strengthened their own anticorruption legislation, resulting in the rise of internationally coordinated resolutions.
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From Risk & Compliance Journal
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Ricardo Alberto Martinelli Linares, right, and his brother Luis Enrique stand inside a holding cell at the judicial court building in Guatemala City. PHOTO: MOISES CASTILLO/ASSOCIATED PRESS
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Federal prosecutors charged two sons of a former president of Panama for their alleged roles in a massive bribery and money-laundering scheme involving Brazilian construction giant Odebrecht.
Luis Enrique Martinelli Linares and Ricardo Alberto Martinelli Linares allegedly used a global network of bank accounts and shell companies to facilitate about $28 million in bribe payments, at the direction of Odebrecht, to a high-ranking government official in Panama, according to a complaint unsealed in the U.S. District Court for the Eastern District of New York.
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Deutsche Bank has had a series of run-ins with U.S. regulators. PHOTO: ALEX KRAUS/BLOOMBERG NEWS
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New York’s financial-services regulator fined Deutsche Bank $150 million on Tuesday for failing to properly monitor its dealings with late financier and convicted sex offender Jeffrey Epstein.
The fine, marking the latest in a series of run-ins with U.S. regulators for the German lender, was issued also in part for its relationship with two European banks embroiled in money-laundering scandals. In those cases, too, Deutsche Bank failed to act on clear red flags, which resulted in those banks being able to transfer funds, including to the U.S.
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A federal judge cast doubt on Bayer’s proposal to neatly resolve all future lawsuits over the safety of its Roundup weedkiller, potentially snagging the German company’s attempts to move past the massive liability.
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A top U.S. Customs and Border Protection official said a recent seizure of nearly 13 tons of hair from a Chinese manufacturer was part of a broader agency effort to clamp down on imports suspected of originating from forced labor in China’s Xinjiang region, where Muslims have faced mass detentions.
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A company awarded a no-bid $10.2 million federal contract to make Covid-19 test kits notified state regulators it closed its doors less than two months after it was created amid U.S. investigations, congressional inquiries and complaints from former workers.
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Major U.S. movie-theater chains are suing the governor of New Jersey over the state’s plans to allow some public spaces—such as churches and shopping malls—to reopen while continuing to bar cinemas from resuming operations.
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New York’s largest nurses union filed charges of unfair labor practices against several hospitals in the state, seeking the number of nurses who had been infected with the coronavirus. The union filed the charges with the New York City offices of the National Labor Relations Board, targeting multiple hospitals.
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The recipients of federal bailout funds meant to save American jobs during the coronavirus pandemic include dozens of big law firms, some of whose partners bring home more than $1 million a year.
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U.K.’s New Sanctions Policy Could Add Compliance Burden For Some
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The U.K.’s new sanctions regime against alleged human rights abusers could force certain businesses to conduct additional risk assessments. The new designations extended British legislation along the lines of a U.S.’s program targeting corrupt actors and human-rights offenders. The sanctions could compel businesses to place a greater emphasis on human-rights risk in the on-boarding of new clients and as they assess existing customers, says Anna Bradshaw, a sanctions lawyer at Peters & Peters Solicitors LLP.
The U.K.’s new sanctions system has a broader and more prescriptive stance on what it means for an entity to be controlled by a designated person than the regime in the European Union, which the U.K. followed before it withdrew from the EU. The broadened meaning of an entity in control by a designated person will require additional due diligence, Ms. Bradshaw said.
Businesses that operate only in the U.K. and in the EU, particularly those in the regulated sectors such as the financial sector, may now need to consider what information to request to ensure they aren’t dealing with a person or entity owned or controlled by, or acting on behalf of, a designed person. “Everyone is aware of financial-crime risk, but the human-rights risk is a bit more difficult to grapple with, and also would be brand new to small or medium-size operators,” Ms. Bradshaw said.
—Mengqi Sun
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An eBay office in Germany last year. PHOTO: FABRIZIO BENSCH/REUTERS
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A retired police captain who oversaw security operations at eBay’s European and Asian offices has been charged in a cyberstalking campaign that targeted a couple whom eBay executives viewed as critical of the company, the Justice Department said.
Philip Cooke, 55 years old, was charged in Boston federal court with conspiracy to commit cyberstalking and conspiracy to tamper with witnesses to hinder the local police investigation. He’s the seventh former eBay employee charged in the alleged cyberstalking campaign against a Massachusetts couple who publish an e-commerce blog, EcommerceBytes.
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By suspending the processing of Hong Kong government requests for user data, Facebook, Twitter and Google put up a united front in challenging a law that is the sharp edge of Beijing’s crackdown on the city’s protest movement. The opaque and top-down nature of the law has sown fear among companies and lawyers who have scrambled to interpret new rules that are only published as they take effect.
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TikTok has exited two international markets in recent weeks, as the first global social-media sensation to emerge from China seeks to navigate a variety of geopolitical tensions. Here’s a look at TikTok’s user data practices and concerns U.S. officials are raising.
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Russian authorities detained a former journalist working at the country’s space agency and accused him of handing over military secrets to NATO, the latest in a string of treason accusations brought against prominent Russians.
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Coronavirus antibody testing being conducted Tuesday at a converted vehicle-inspection station in San Antonio. PHOTO: ERIC GAY/ASSOCIATED PRESS
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Officials across the country struggled to balance rising coronavirus cases with the need to reopen their economies, as the Trump administration followed through on earlier threats to withdraw the U.S. from the World Health Organization.
Federal Reserve Vice Chairman Richard Clarida said in a television interview that the fate of the economy is tied to what happens with the pandemic, adding that the central bank can and will do more if it determines such action will help it achieve its job and inflation goals. The number of Americans dismissed from their jobs fell sharply in May to match levels recorded before the coronavirus pandemic and related shutdowns caused widespread layoffs.
“The COVID event is not behind us yet,” Randal Quarles, the Fed’s vice chairman for financial regulation, said in prepared remarks. “We know that the financial system will face more challenges.”
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United Airlines said the drop in bookings has been most acute at its Newark, N.J., hub. PHOTO: ANGUS MORDANT/BLOOMBERG NEWS
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Airlines are preparing to cut thousands of workers and tap government loans as a surge of coronavirus cases and fresh government travel restrictions upend a nascent recovery in travel.
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The Trump administration’s latest rules on international students are leaving colleges in a bind: hold in-person classes—a proposition many have deemed too dangerous—or risk losing enrollees from abroad. Under the policy issued by U.S. Immigration and Customs Enforcement, international students won’t be allowed to enter or remain in the country if their universities opt to teach classes entirely online this fall.
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Representatives of three companies are refusing to recognize the results of Luckin Coffee’s extraordinary shareholder meeting, according to a person familiar with the matter. PHOTO: WU HONG/EPA/SHUTTERSTOCK
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A fight for control of Luckin Coffee is hamstringing the embattled company, which has yet to release the results of a controversial shareholder vote that took place over the weekend.
Luckin on Sunday held an extraordinary general meeting in Beijing, during which its chairman and co-founder, Charles Lu, asked shareholders to vote out four of the company’s eight directors—including himself—and replace them with two individuals whom he nominated as independent directors. Some shareholders saw it as an attempt by Mr. Lu, who is at risk of losing most of his voting rights at Luckin, to hang on to control of the upstart coffee chain via proxies.
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Governments around the world are spending like never before to kick-start their economies in the wake of Covid-19 lockdowns, in many cases tying green initiatives to rescue packages, even as some industries say saving jobs should trump environmental concerns.
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Facebook Chief Executive Mark Zuckerberg was involved in the meeting with civil-rights groups Tuesday. PHOTO: MICHAEL REYNOLDS/EPA/SHUTTERSTOCK
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Facebook has been too reactive and slow in addressing hate speech, voter suppression and other problematic content on its platform, according to a report from lawyers hired by the company to audit its handling of civil-rights issues.
The report praises the social-media giant for undertaking a self-examination and making some meaningful changes, including instituting rules against voter suppression and creating a team to study algorithmic bias. But the 100-page document also calls Facebook’s efforts inadequate given the harm some content can cause.
The report, which ends a two-year review by civil-rights attorney Laura Murphy and a team from law firm Relman Colfax PLLC, was released the day after a meeting Tuesday between Facebook leaders including Chief Executive Mark Zuckerberg and outside civil-rights advocates who have organized an advertiser boycott of the platform. Representatives of those groups said they didn’t make meaningful progress on their demands.
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