In a series of recent rulings, the European Court of Justice overturned economic sanctions issued by the Council of the European Union (EU) on several Iranian banks and shipping lines. […] The EU had sanctioned these entities for their support of nuclear proliferation activities in Iran, but the Court determined that the EU lacked sufficient evidence to introduce such sanctions.
In this wide-ranging interview, FCPA attorney Tom Fox talks with Matt Kelly, Publisher and Editor of Compliance Week, about some of the data privacy and management challenges facing companies today and in the future. Among other topics, the two compliance heavy weights touch upon:
- Ethics issues of capturing and using location data
- Navigating the differences between EU and US conceptions - and regulation - of data privacy
- Implications for Internet retailers and other companies with significant online presence of third-party data collection
Malta’s Parliament approved the country’s long-awaited Whistleblower Act. Effective September 15, 2013, the act provides varying programs of protection for individuals blowing the whistle on corrupt practices. The passage of the whistleblower act was the culmination of more than six years of legislative effort.
Read: Whistleblowing in Malta»
The principal objectives of Directive 2013/34/EU (the Directive) were to consolidate EU accounting requirements and to simplify financial reporting requirements for small and medium companies. However, the Directive also introduced new obligations upon large companies operating in the extractive (oil, gas and mining) and logging industries to report details of all material payments they make to host governments in connection with projects in those sectors…
… the proposed Regulation seeks to restore confidence in indices and benchmarks following the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) scandals in 2012. In particular, the Commission aims to improve the reliability and integrity of benchmarks by preventing their manipulation and clarifying the remit of supervisory bodies to improve the detection and prevention of manipulation. Furthermore, it seeks to increase transparency in the benchmarks, and introduces fines for cases of manipulation.
In September 2013, the EU General Court annulled a series of asset freeze sanctions imposed by the Council of the European Union on a number of Iranian entities and one person. The General Court requires the EU regulators to adduce stronger evidence to justify the imposition of sanctions. Failure to do so risks undermining the European Union’s efforts to constrain Iran’s alleged efforts to develop its nuclear and missile programme…
The [European Commission (E.C.)] recognizes that it is not enough to have the right to an action for damages for competition law violations in the European Union. A victim must be able to exercise that right without obstacles and legal uncertainties. The E.C.’s directive is a solid move in the right direction to fulfilling those objectives...
Companies need be proactive and take steps to dealing with a data protection audit. Any regulatory inspection is a burdensome undertaking, and inspections carry the risk of noncompliance being exposed, sanctions, adverse media attention and damage to reputation. Sometimes noncompliance is only identified after an inspection has been carried out. Even for fully compliant organizations, inspections bring disruption to the conduct of normal business.
“The UK Government has announced a review of the Bribery Act 2010 and its intent to reduce the cost of compliance for small and medium-sized businesses. The main focus will apparently be on facilitation payments. These are small payments given to officials to permit or speed up a service, and that are illegal under the UK Bribery Act but narrowly permissible under the U.S. Foreign Corrupt Practices Act (FCPA). The current legislation has been challenged by businesses that operate in jurisdictions where such payments are a common and arguably necessary occurrence and also by those companies that are subject to both the Bribery Act and the FCPA. At the same time, the facilitation payments exception under the FCPA itself appears to be under review and perhaps on the way out.
While many laud the UK Government’s expressed intention to reduce red tape for small and medium-sized businesses generally, these proposals are in contrast to repeated promises to clamp down on bribery, as well as contrary to the Serious Fraud Office (SFO) guidance statements that facilitation payments are regarded as bribes. It will be interesting to see whether any meaningful proposals actually come out of the review.”
Read the full update, UK Bribery Act: Red Light, Green Light or Mixed-Signals? - Pillsbury Winthrop Shaw Pittman LLP»
From attorneys at White & Case:
“The EU has renewed its sanctions against Syria until 1 June 2014, with the exception of the arms embargo. For Belarus, the Council has decided to delist three parties from the asset freeze list. For Libya, the Council has implemented recent EU sanctions amendments with respect to arms embargo exemptions and release of certain frozen funds.”
Read the update, EU renews sanctions against Syria (except the arms embargo), and updates/implements measures against Belarus and Libya - White & Case LLP»
In early April, the European Union agreed to new regulations that would require oil, gas, mining, and forestry companies to provide additional detail on payments they make to foreign governments. From attorney Raymond Banoun at Cadwalader:
“The proposal follows guidelines developed by the Extractive Industry Transparency Initiative (EITI) and requires all extractive and forestry industry companies listed on EU exchanges to report payments made to governments and local authorities in each country and for each project. Importantly, large unlisted companies registered in the EU also are required to comply. The extractive industry consists of all companies with activities involving the exploration, discovery, development and extraction of minerals, oil and natural gas deposits, while the forestry industry covers companies with activities involving the clear-cutting, selective logging or thinning of primary forests.
Companies in these industries will need to report taxes, royalties, signature bonuses, licenses, concessions, leases, and any other payments made to government and local authorities in the countries where the companies operate. ‘Other payments’ subject to reporting requirements may include rental fees, transit fees, and dividends. This level of disclosure is required for each project the company has undertaken in each country. The threshold for the disclosure of payments related to each project is set at €100,000 (approximately $130,000).”
Read the full update, European Union Pending Legislation Requiring Additional Transparency from Extractive Industries - Cadwalader, Wickersham & Taft LLP»
Earlier this week, European regulators implemented a number of changes to economic sanctions. From attorneys at White & Case:
“For Burma/Myanmar, the Council has decided to lift all economic sanctions, while keeping the existing arms embargo in place for one more year. For Syria, the Council has eased certain EU sanctions measures, including the oil embargo, by allowing Member State authorisation (following consultation of the Syrian opposition) of certain types of transactions with the aim of helping civilians and supporting the opposition.
For North Korea, the EU has introduced amendments to reflect newly adopted UN sanctions measures, including the addition of parties to the UN list of designated persons and entities subject to an asset freeze. Finally, with respect to Libya, the EU Council has decided to delist one person whose assets have been frozen and to allow assistance to the Libyan government for security/disarmament reasons.”
Read the full update, EU lifts sanctions against Burma/Myanmar, eases measures against Syria and Libya, and tightens sanctions against North Korea - White & Case LLP»
From law firm King & Spalding, a look at efforts in Canada and Europe to implement disclosure requirements for companies that manufacturing products containing tin, tantalum, tungsten, gold, and other so-called “conflict minerals:”
“The European Commission (EC) Directorate-General for Trade has issued a consultation to solicit interested parties’ views on a potential EU initiative for responsible sourcing of minerals coming from conflict-affected and high-risk areas. This ‘conflict minerals’ consultation seeks information from EU zone companies that would help the EC decide whether to ‘complement’ the U.S. conflict minerals due diligence regime passed as part of the Dodd-Frank Act and recently instituted by the Securities and Exchange Commission…
Similarly, a proposed Canadian ‘Conflict Minerals Act’ would impose due diligence and disclosure requirements similar to those in the U.S. on Canadian companies that use ‘designated minerals’ (including tantalum, tin, tungsten, or gold) originating in the Great Lakes Region of Africa. It is noteworthy that the Canadian proposal would extend disclosure obligations to cover the extraction, processing, purchasing, or trading of conflict minerals, roles that are exempted in some cases from the SEC’s rules.”
Read the full update, European Commission Issues Consultation for Views on Potential EU Conflict Minerals Initiative; Canada floats “Conflict Minerals Act” - King & Spalding»
The European Commission has proposed amendments to its Transparency Directive that would bring anti-corruption reporting requirements for oil, gas, and mining companies in line with those of the United States. From attorneys at Dechert:
“Large non-listed companies incorporated in the European Economic Area which operate in the oil, gas and mining sectors will need to annually disclose any payments made to the national, regional or local authority of a host country on a country and project basis where the payment is above a threshold of EUR 100,000 (c. GBP 85,000 / USD 131,000). Sanctions for failure to comply are likely to be punitive.
The payments to be disclosed will include taxes on profits, royalties, dividends, bonuses, licence fees and other direct benefits to the government concerned, amongst others. There will be no exemption to the disclosure requirements, even if the disclosure is not permitted by the host country’s criminal law.”
Read the full update, New Anti-Corruption Provisions in EU Legislation: Increased Accountability for Mining, Oil and Gas Companies - Dechert LLP»