Things To Think About
Just prior to President Trump’s inauguration, the US government published a National Action Plan on Responsible Business Conduct (“NAP“). Writing for the NYU Compliance and Enforcement blog, three US practitioners provide their thoughts on what it signals for future US policy:
If the US is signaling a convergence between its anticorruption focus (specifically, preventing and punishing bribery) and the more amorphous human rights agenda (which includes labor standards, women’s rights, minority rights, property protection, environmental protection, and protection of the rights of indigenous peoples), a transformation of “soft” standards of corporate responsibility into “hard” obligations creating broader and less predictable corporate liability is not unforeseeable.
The European Coalition For Corporate Justice provides a comparison of the Swiss, Italian, German and US NAPs here. (Australia does not have a NAP.)
Notable Litigation Actions
Credit Suisse & Deutsche Bank
Better late than never? Credit Suisse and Deutsche Bank have entered civil settlements with the US DOJ for their 2005/6-2007 contraventions of the Financial Institutions Reform, Recovery and Enforcement Act that contributed to the GFC.
Credit Suisse’s settlement includes a $2.48 billion penalty and $2.8 billion in relief for affected consumers and communities. Deutsche Bank will pay a $3.1 billion penalty and provide $4.1 in relief: described by P/D/A Att-Gen Bill Baer as a deservedly “painful penalty” for the bank. The settlements do not preclude criminal prosecution of the banks or any individuals involved. The statement of agreed facts (Credit Suisse; Deutsche Bank) provide a formal narrative of the banks’ cultural decline:
“Thanks for working thru this mess. If it helps, it looks like we will make a killing on this trade.” (Credit Suisse)
(You may recall Speigel’s piece on the fall of Deutsche Bank from last October.)
Rolls Royce plc has entered deferred prosecution agreements with the US DOJ and the UK Serious Fraud Office, and has entered a ‘leniency agreement’ with the Brazilian Ministério Público Federal, to resolve criminal charges concerning its “long-running scheme to bribe government officials in exchange for government contracts” in Kazakhstan, Azerbaijan, Angola, Iraq, Indonesia, Thailand, India, Russia, Nigeria, China, Malaysia and Brazil. $800 million in penalties have been agreed across the three jurisdictions.
US DOJ press release here, US DPA here; UK Serious Fraud Office press release here; judgment here (note the interesting comments about the need to truncate the usual schedule to rush the judgment through before Trump’s inauguration). Also note the different tone in the DOJ release and the UK judgment in particular. National pride? Or different attitudes to corporate crime and offender cooperation?
Law & Policy Updates
The flag hangs at half mast for Federal US regulators this fortnight. In her final address as US Attorney General, Loretta Lynch said:
“My time as the Attorney General of these United States is drawing to a close. But I have also seen that the cause of justice is greater than any one of us – it spans any temporal bounds that we would place on it. It transcends the work of a single administration, or even of a generation.
And if it comes to pass that we do enter a period of darkness, let us remember – that is when dreams are best made.”
Then EPA Administrator Gina McCarthy said on 19 January,
“My hope is that our record will remind people that government can and does work for them, and it will inspire young people everywhere to consider careers in public service because it is indeed the most noble profession.”
A few days later, media outlets reported that President Trump had issued a gag order to five federal agencies, including the EPA, the Department of the Interior and Department of Agriculture.
Shortly after the gag order came the executive order:
“Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.”
Many eyes will be watching how US State regulators respond to the new environment.
Meanwhile, the Antitrust division of the US DOJ has updated its leniency policy.
8 February 2017: ASIC RegTech Roundtable (video conference)
17 February 2017: NELA Climate Change and Environmental Legislation Conference (Murdoch, WA)
28 February- 1 March 2017: Informa Responsible Lending and Borrowing Summit (Sydney)
20-21 March 2017: ASIC Annual Forum (Sydney)
27-28 July 2017: ACCC & AER Regulatory Conference (Brisbane)
Inquiry into the social issues relating to land-based driverless vehicles in Australia (submissions close 6 February 2016) Senate Standing Committee on Industry, Innovation, Science and Resources
Inquiry into whistleblower protections in the corporate, public and not-for-profit sectors (submissions close 10 February 2017) Joint Parliamentary Committee on Corporations and Financial Services
Inquiry into consumer protection in the banking, insurance and financial sector (submissions close 7 March 2017) Senate Standing Committee on Economics
ASIC consultation paper proposing to consolidate and clarify Australia’s market integrity rules (submissions close 7 March 2017) ASIC