Compliance and Investigations Newsletter no5 – May 2022

The Compliance and Investigations Newsletter aims to provide information on the main news media, trends, cases and legislation related to compliance matters, in Brazil and abroad. This material is for informational purposes and should not be used for decision making. Specific legal advice can be provided by our lawyers.

Enjoy your reading!

Compliance and Investigations Team

 


Glencore pays USD700 million to settle FCPA offenses in the United States, UK, Brazil, and other countries.

On May 24, 2022, the US subsidiary of Switzerland-based mining commodities company Glencore plc entered into a plea agreement with the US Department of Justice (“DOJ”) and agreed to pay USD700 million for violations against the Foreign Corrupt Practices Act (“FCPA”). Additionally, the agreement requires Glencore to retain a compliance monitor for three years.

As part of the resolution in the United States, a subsidiary of Glencore algo agreed to plead guilty and pay USD 485 million to resolve market manipulation investigations carried out by the DOJ and the Commodity Futures Trading Commission (“CFTC”). After crediting about $166 million of that payment to amounts to be paid in the UK and possibly other countries, penalties assessed in the United States will be just over USD1 billion.

At a DOJ press conference, the U.S. Attorney for the Southern District of New York, said, “Bribery was built into the corporate culture” of Glencore. According to FBI agent Brian Turner, the company paid USD100 million in bribes overall, and such corrupt payments were made to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo (DRC).

The plea agreement can read in full here.

For more information, access the FCPA blog here.

For the first time in Brazil, two public prosecutors’ offices simultaneously enter into agreements with one company

On May 4, 2022, the Brazilian Federal Public Prosecutor’s Office (“MPF”) announced that the company Allied Tecnologia signed a leniency agreement with the MPF and a civil non-prosecution agreement with the Public Prosecutor’s Office of the State of São Paulo (“MPSP”), due to irregularities investigated by the Federal Police within the scope of Operation Triuno, initiated on October 22, 2020, as a ramification of Operation Descarte.

The agreements are the first to be signed simultaneously by two public prosecutors’ offices in Brazil and stem from investigations involving the alleged payment of undue advantages to public servants with the goal of reducing tax credit assessed in tax proceedings.

Through such agreements, Allied Tecnologia agreed to pay BRL 23.8 million to the public treasury. In addition, the company is also obliged to seek continuous improvement of its compliance program for a period of five years after the agreements’ approval.

For more information, access the MPF report here.

CGU’s Empresa Pró-Ética inspires compliance programs for Paraguayan companies.

The Minister of the Brazilian Office of the Comptroller-General (“CGU”), Wagner Rosário, carried out an international agenda in Asunción, capital of Paraguay, on May 4 and 5, within the scope of the Paraguay-Brazil-Germany trilateral cooperation project “Bolstering Integrity in Times of Crisis”.

During the launch of the project, minister Rosário highlighted that the initiative resulted “in the creation of a framework of incentives to promote integrity in the Paraguayan business sector, inspired by a successful project of the Brazilian government, known as Empresa Pró-Ética”.

Inspired by the Empresa Pró-Ética program, the Paraguayan government launched the Integrity Seal, aimed at promoting compliance programs within the Paraguayan business sector, in addition to raising awareness among companies regarding their role in preventing corruption and the impact of such events on the economy and business environment.

For more information, access the CGU article here.

U.S. issues charges in first criminal cryptocurrency sanctions case

A U.S. federal judge announced on May 13 that the DOJ had launched the first criminal prosecution involving alleged use of cryptocurrency to evade economic sanctions in the United States.

In an unusual opinion, U.S. Magistrate Judge Zia M. Faruqui of Washington, D.C., accepted a complaint against an American citizen accused of transmitting more than USD10 million worth of bitcoin to a virtual currency exchange in one of a handful of countries comprehensively sanctioned by the U.S. government: Cuba, Iran, North Korea, Syria or Russia.

It was Judge Faruqui’s understanding that sanctions do apply to virtual currency, and he reinforced that “The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with the Office of Foreign Assets Control’s (OFAC) regulations, including as to virtual currency,”

For more information, access here the Washington Post’s article.