Potential sanctions imposition pursuant to US Administration's new strategy on Iran
On 13 October 2017, President Trump laid out new strategies for his administration concerning Iran. In a speech delivered at the White House, he also announced that his administration will not certify Iran's compliance with the Joint Comprehensive Plan of Action ("JCPOA"). Such a step raises the spectre of sanctions being reimposed and may well disrupt foreign direct investment in Iran.
Subsequently, the Treasury Under Secretary for Terrorism and Financial Intelligence also indicated the potential of more sanctions targeting Iran in a recent speech. Details of the Trump administration's new sanctions policy can be found here.
US revokes Sudan sanctions
The US government has announced that effective 12 October 2017, sanctions imposed on Sudan and the Government of Sudan are to be revoked. US persons are now permitted to conduct business with Sudan, Sudanese companies, and the Government of Sudan and are not required to block property of Government of Sudan. The revocation does not affect US sanctions related to the conflict in Darfur, nor does it affect continuing sanction designations of any Sudanese persons
OFAC fines US company for facilitating sales from Canada to Sudan
On 5 October 2017, the Office of Foreign Assets Control ("OFAC") announced that White Birch USA has agreed to pay $372,465 to settle its potential civil liability for three apparent violations of the Sudanese Sanctions Regulations. Multiple White Birch USA personnel, including individuals in supervisory or managerial positions, are reported to have had actual knowledge of and were actively involved in, or had reason to know of, the conduct that led to the apparent violations.
SEC settles with Alere over FCPA and accounting fraud violations
On 28 September 2017, the Securities and Exchange Commission ("SEC") announced that through an administrative order it has settled with Alere Inc. ("Alere"), a public medical device company, for accounting fraud and Foreign Corrupt Practices Act ("FCPA") violations. According to the order, between 2011 and 2016 the South Korean subsidiary of Alere improperly inflated revenues by prematurely recording sales for products that were still being stored at warehouses or otherwise not yet delivered to the customers. Alere also engaged in improper revenue recognition practices at several other subsidiaries. The SEC's order also found that between 2011 and 2013, Alere subsidiaries in India and Colombia obtained or retained business by using distributors or consultants to make improper payments to officials of government agencies or entities under government control.
OFAC fines US company for shipping jewellery to SDN based in Hong Kong
On 26 September 2017, OFAC announced that luxury goods company Cartier has agreed to pay $334,800 to settle its potential civil liability for four apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations. According to OFAC, between 2010 and 2011, Cartier exported four shipments of jewellery to Shuen Wai Holding Limited in Hong Kong, an entity OFAC added to the List of Specially Designated Nationals and Blocked Persons (the “SDN List”) in November 2008.
Telia and its Uzbek subsidiary enter into a global settlement for corrupt payments in Uzbekistan
On 21 September 2017, the US Department of Justice ("DOJ") announced that Stockholm-based Telia Company AB ("Telia"), an international telecommunications company that was formerly an issuer of publicly traded securities in the US, and its Uzbek subsidiary, Coscom LLC ("Coscom"), entered into a global foreign bribery resolution and agreed to pay a combined total penalty of more than $965 million to resolve charges arising out of a scheme to pay bribes in Uzbekistan.
According to the companies’ admissions, through various managers and employees within Telia and Coscom paid approximately $331 million in bribes to an Uzbek government official, who had influence over the Uzbek governmental body that regulated the telecom industry. The companies structured and concealed bribes through various payments including payments to a shell company that certain Telia and Coscom management knew was beneficially owned by the foreign official. The bribes were paid on multiple occasions between approximately 2007 and 2010 so that Telia could enter the Uzbek market and Coscom could gain valuable telecom assets and continue operating in Uzbekistan. Certain Telia and Coscom management also contemplated structuring an additional bribe payment in late 2012, after Swedish media began reporting about Telia’s corrupt payments in Uzbekistan, Swedish authorities began a criminal investigation and Telia opened an internal investigation.
Telia entered into a deferred prosecution agreement for conspiracy to violate the anti-bribery provisions of the FCPA. In addition, Coscom pleaded guilty and was charged with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the DOJ, Telia agreed to pay a total criminal penalty of $274,603,972 to the US, including a $500,000 criminal fine and $40 million in criminal forfeiture that Telia agreed to pay on behalf of Coscom. Telia also agreed to implement rigorous internal controls and cooperate fully with the DOJ's ongoing investigation.
The SEC and Public Prosecution Service of the Netherlands (Openbaar Ministrie, or "OM") announced separate settlements with Telia in connection with related proceedings. Under the terms of its resolution with the SEC, Telia agreed to a total of $457,169,977 in disgorgement of profits and prejudgment interest, and the SEC agreed to credit any disgorged profits that Telia pays to the Swedish Prosecution Authority ("SPA") or OM, up to half of the total. Telia agreed to pay the OM a criminal penalty of $274,000,000 from a total criminal penalty of $548,603,972. The combined total amount of criminal and regulatory penalties paid by Telia and Coscom to US, Dutch, and Swedish authorities will total $965,773,949.