OFAC revokes so-called U-turn authorization for Cuba-related financial transactions
OFAC published a final rule that modifies the Cuban Assets Control Regulations to revoke the so-called "U-turn" authorization.
Foreign Corrupt Practices Act issues dog two projects in South Africa.
Japanese company Hitachi agreed to pay the US government a $19 million civil penalty to settle a complaint the US Securities and Exchange Commission filed against the company in court. The details are in a settlement that was filed with the court in late September.
Hitachi set up a company in South Africa in 2005 to bid on contracts to supply the boiler works for two coal-fired power plants: the Medupi and Kusile projects. Eskom, the South African utility, ultimately awarded Hitachi the contracts worth $5.6 billion. Eskom is owned by the South African government.
Hitachi sold 25% of the stock in its South African company to another company that the SEC said is a front for the African National Congress, the ruling political party in South Africa, and encouraged the front company to use its political influence to help secure the contracts. The chairman of the front company was married to a family member of the Eskom CEO. The front company had extensive ties with the ANC, according court documents.
Hitachi paid the front company a success fee of $1 million in 2008 that Hitachi recorded on its books as a “consulting fee.” It paid another $1 million in 2010 that it recorded as a dividend on the 25% shareholding.
The Foreign Corrupt Practices Act requires US and foreign companies that have to file reports with the Securities and Exchange Commission to keep books that accurately reflect what they are doing and also to have internal controls that will help them spot any bribes paid to foreign government officials or officials of foreign political parties.
Hitachi was an issuer of US securities. It had American depositary receipts, or ADRs, that were traded on the New York Stock Exchange at the time of the violations. It delisted the ADRs in 2013, but they continued to trade on over-the-counter markets.
The case was a collaboration between the SEC and the integrity and anti-corruption department of the African Development Bank. In recent years, the AfDB has vigorously enforced ethics violations, according to Keith Rosen, an FCPA expert with Chadbourne. “For example, on October 1, 2015, the AfDB settled claims against SNC-Lavalin Group Inc. alleging the company made illicit payments to public officials in order to secure contracts on two AfDB-financed projects, and in December 2014, the AfDB imposed a three-year debarment and an $18.86 million fine on China First Highway Engineering Co. Ltd. following the company’s admission of fraudulent and collusive practices in an AfDB-financed project,” Rosen said.
The SEC settled charges with Goodyear that led to a $16 million fine against the tire company in February 2015 related to bribes paid to obtain tire sales in Kenya and Angola. In September 2015, Hyperdynamics Corporation settled SEC charges that its subsidiary in Guinea failed accurately to record payments to two companies.
On 5 September 2019, Professor John McMillan AO’s Final Report (Report) on the operation of the Narcotic Drugs Act 1967 (ND Act) was tabled in Parliament. Section 26A of the ND Act required the Minster to cause a review of the operation of the ND Act to be undertaken.