Enforcement Trends by Country

Section III: International DevelopmentsChapter Thirteen

Mar 11

International Developments

1. Canada

As a signatory to the OECD Anti-Bribery Convention, Canada was assessed in Transparency International’s biannual Exporting Corruption 2022 Report. The report, released on October 11, 2022,[1] stated that Canada carried out only “limited enforcement” of the Corruption of Foreign Public Officials Act (CFPOA).[2] The report highlights Canada’s failure to use a key anti-corruption measure—the “remediation agreement,” a court-approved agreement that allows Canadian companies to admit to foreign corruption and bribery and avoid criminal convictions in exchange for financial penalties and agreement to cooperate with law enforcement to prosecute individuals involved in corruption.[3]

However, recent enforcement efforts have demonstrated Canada’s efforts to utilize remediation agreements as a tool to address corruption and bribery. On September 21, 2022, the Royal Canadian Mounted Police (RCMP) stated that it was investigating British defense contractor Ultra Electronics Forensic Technology (UEFTI) for alleged bribery and fraud.[4] According to Canadian authorities, four former UEFTI executives allegedly directed their agents to pay public officials in the Philippines to influence and accelerate a multi-million-dollar contract.[5] The company and four executives were each charged with two counts of bribery of foreign officials under Canada’s Corruption of Foreign Public Officials Act and one count of defrauding the public under Canada’s Criminal Code.[6] On September 29, 2022, UEFTI reported that its Canadian forensics division had agreed to a settlement of the claims.[7] This settlement is the second anti-corruption remediation agreement negotiated by Canadian federal prosecutors.[8] The first-ever remediation agreement in the anti-corruption context was approved by the Quebec Superior Court in May 2022 to settle corruption and fraud charges against SNC Lavalin Inc.[9]

As of September 30, 2022, the parties in the UEFTI matter were waiting on approval of the settlement by the Quebec Superior Court. The four former executives are not parties to the settlement agreement and will be prosecuted separately.[10]

2. France

In 2022, the French enforcement authorities continued to actively enforce Sapin II, France’s comprehensive anti-corruption legislation enacted in 2017.

On July 7, 2022, the PNF announced that the Paris Court of Justice had approved two judicial public interest agreements involving allegations of foreign bribery.[11]

First, the French digital security company IDEMIA agreed to pay a nearly €8 million fine to resolve allegations that Oberthur, a predecessor company to IDEMIA, had bribed Bangladeshi foreign officials to win a contract in connection with work on developing a national ID system for Bangladesh.[12] These allegations were also the subject of a November 2017 World Bank settlement with Oberthur. The World Bank had financed the project and, consequently, debarred Oberthur for two and a half years as part of its resolution with the company. The World Bank lifted the debarment in May 2020 after confirming the quality of the remedial measures made to its compliance program.[13]
Second, the French engineering conglomerate DORIS Group agreed to pay a nearly €3.5 million fine and to undergo audits by AFA for a period of three years to resolve allegations that it bribed a foreign official.[14] The PNF opened the investigation in November 2019, shortly after it was revealed that the FBI was investigating DORIS Group’s US subsidiary for allegations of corruption in Angola.

On November 30, 2022, the PNF said in a statement that Airbus agreed to pay €15.8 million to resolve allegations that it had paid bribes to public officials in connection with contracts concerning the sale of commercial aircraft, helicopters, and satellites in Libya and Kazakhastan between 2006 and 2011.[15] The settlement is an extension of a €2 billion agreement that Airbus signed with the PNF in 2020 to resolve allegations of bribery in 16 countries. The latter agreement formed part of a $4 billion global resolution to end various investigations by authorities in the US, UK, and France. The recent settlement concludes all PNF investigations into the multinational airspace corporation. Lastly, the PNF recently opened a preliminary investigation into the organization of the 2023 Rugby World Cup in connection with allegations of corruption, influence peddling, favoritism, and other related offences.[16]

3. Italy

In July 2022, a Milan appeal court finalized the acquittal of oil giants Eni and Shell and individual defendants after the attorney general in an unprecedented move signaled that the prosecution did not plan to pursue the case at the start of the appeal hearing.[17] The Tribunal Prosecutor’s Office, which is a separate prosecutorial body, and the Nigerian government had sought to appeal a March 2021 ruling, which had acquitted the two companies and individual defendants after a three-year trial.[18]

The appeal came after a long-running investigation and prosecution by the Milan public prosecutor into the oil giants. The case related to an award of a license to explore OPL 245, a defined deep-water offshore area approximately 150 kilometers from the Niger delta. The Nigerian government originally assigned OPL 245 to a Nigerian entity, Malabu Oil & Gas, in 1998 but then transferred the rights to Shell and Eni in 2011, in a process that bypassed certain local licensing requirements and, as the prosecutors alleged, at a price far below commercial terms. The rights transfer occurred after Shell and Eni had purchased the license from Malabu Oil & Gas’ owner, Dan Etete, who is a convicted money-launderer and who served as the Nigerian Minister of Petroleum when Malabu Oil & Gas received the OPL 245 license in 1998. Prosecutors had sought custodial sentences for the individuals tried, including Shell and Eni executives, and also sought to confiscate approximately $1.09 billion from the defendants.

While the acquittal of all the defendants was finalized, Nigeria’s appeal seeking $1.1 billion in compensation from the oil giants remained ongoing. In November 2022, however, the Italian appeals court hearing the compensation appeal rejected Nigeria’s compensation request.[19]

4. Mexico

In June 2022, the Organisation for Economic Co-operation and Development’s (OECD) Working Group on Bribery expressed its concern regarding the continued lack of foreign bribery offense enforcement in Mexico.[20] The Working Group on Bribery wrote that since the OECD Anti-Bribery Convention entered into force 20 years ago, Mexico has not successfully concluded a single foreign bribery case. In fact, no case has ever moved past the investigation stage. Further, the number of ongoing investigations has declined since October 2018.[21]

The Working Group on Bribery urged Mexico to take concrete and deliberate steps to address these concerns and to resolve outstanding OECD recommendations, including the enactment of specific legislation for whistleblower protection and corporate liability for foreign bribery.[22]

5. South Africa

The long-standing investigation into state capture allegations in South Africa came to conclusion in June 2022. In 2018, the South African government established the Judicial Commission of Inquiry Into Allegations of State Capture, also known as the “Zondo Commission” after the commission’s chairperson, Deputy Chief Justice Raymond Zondo.[23] The Zondo Commission was formed to investigate allegations of corruption in the public sector following former Public Protector Thuli Madonsela’s 2016 report responding to complaints of unethical conduct in the appointment of certain cabinet ministers and other public officials.[24] The Commission’s inquiry focused on the extent to which “state capture”—a scheme of systemic political corruption through which private individuals and entities influence a state’s decision-making for their own benefit—was at play during former President Jacob Zuma’s tenure.[25] The allegations of state capture largely arose from Zuma’s dealings with the Gupta family—a wealthy, Indian-born family with extensive business interests in South Africa.[26]

After nearly four years of investigation, the Zondo Commission’s June 2022 report affirmed that the Gupta family exerted substantial influence over key appointments and dismissals of various state officials and undermined the procurements process, all while looting public funds for their personal advantage.[27] Specifically, the Commission heard evidence supporting allegations that Zuma sold the Gupta family control over numerous state-owned enterprises, awarded multiple government contracts worth billions of South African Rand to Gupta’s businesses in exchange for little to no work by said businesses, permitted the Guptas to land commercial aircraft at an air force base typically reserved for high-ranking officials, and provided other improper benefits to the Gupta family.[28] The Zondo Commission estimated that the total loss to the state as a result of the alleged state capture exceeds $15 billion rand.[29]

Zuma was arrested for contempt in July 2021 following his refusal to appear before the Zondo Commission to respond to the allegations against him.[30] However, the Zondo Commission’s report recommends that additional individuals and entities implicated in the state capture scheme be investigated further and potentially prosecuted.[31] In response to the report, Zuma’s successor, President Cyril Ramaphosa, has appointed a National Anti-Corruption Advisory Council (NACAC) to advise the South African government on corruption prevention measures in the public and private sectors.[32] The appointment of the NACAC will bolster President Ramaphosa’s existing anti-corruption efforts, including the implementation of the National Prosecuting Authority to investigate and prosecute corruption among high-ranking officials and the “step aside rule,” a resolution requiring all members of the African National Congress charged with corruption to vacate their posts or face suspension.[33] President Ramaphosa formally responded to the Commission’s Report in October 2022.[34] The president’s response—which has been made publicly available—outlines the steps the South African government is taking to implement the Commission’s recommendations to address and prevent future occurrence of state capture.[35] Significantly, the president described his intent to make the Investigating Directorate—a body that the president had previously established to investigate corruption unearthed by the Zondo Commission—a permanent entity within South Africa’s National Prosecuting Authority (NPA).[36]

6. South Korea

In 2021, the South Korean government established the Corruption Investigation Office for High-Ranking Officials (CIO), an investigative body with the power to investigate corruption by current or former officials, including but not limited to by the president, the speaker and all members of the National Assembly, the chief justice and all other Justices of the Supreme Court, all judges and prosecutors, and certain higher-ranking police officials, as well as these officials’ family members.

Since then, as we previously reported, the CIO initiated several investigations in 2021, including:

In May 2021, the CIO raided the Seoul Metropolitan Office of Education over alleged hiring irregularities involving five teachers and Seoul Education Superintendent Cho Hee-yeon, who is accused of abusing his authority by pressing for a special employment process for the teachers, who were fired after being convicted of violating the Public Official Election Act.[37]
In July 2021, the CIO raided and searched the home of a presidential secretary for civil affairs and justice, Lee Gwang-cheol, to obtain evidence relating to a charge of abuse of power for allegedly orchestrating illegalities targeting former Vice Minister of Justice Kim Hak-ui. In addition, the CIO was also reportedly looking into senior prosecutors suspected of an illegal exit ban on Kim, who was stopped from leaving the country in March 2019 while at Incheon International Airport.[38]
In addition, in August 2021, it was reported that the CIO was considering an investigation into an unidentified incumbent lawmaker affiliated with the main opposition People Power Party for allegedly receiving four payments totaling 20 million won (approximately $17,300) in 2016 and 2017 from a former municipal council member and their family in exchange faor influencing the lawmaker’s party to support the council member’s 2018 election campaign.[39]

More recently, in June 2022, the CIO asked for the indictment of Park Jie-won, the former director of the National Intelligence Service, for providing false allegations to reporters about then-presidential candidate Yoon Suk-yeol before the election. The CIO found that Park spoke to five reporters and told them he had evidence that Yoon attempted to influence the outcome of an investigation involving his close aide—statements that the CIO found tantamount to defamation and publication of false information.[40]

These various investigations illustrate both the breadth of the CIO’s authority and suggest that the CIO will be active in pursuing investigations and prosecutions for alleged misconduct by public officials. In fact, in February 2022, the CIO signed a Memorandum of Understanding (MOU) with the Anti-Corruption and Civil Rights Commission (ACRC) signifying their agreement to collaborate to create a clean public sector and to protect and support whistleblowers.[41]