No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights

VimpelCom’s Global FCPA Settlement: A Multinational Resolution

by Floren Taylor
June 17, 2016
in Uncategorized
VimpelCom resolution underscores the importance of a strong, integrated compliance program

with co-authors Philip Bezanson and Glen Kopp

The Settlement

The U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC) and the Public Prosecution Service of the Netherlands (OM) announced a coordinated criminal and civil Foreign Corrupt Practices Act (FCPA) resolution with VimpelCom, a Dutch telecommunications company. In total, VimpelCom agreed to pay $795 million in fines and disgorgement stemming from a seven-year bribery scheme in Uzbekistan. The $397.5 million U.S. portion of the settlement amounts to the fifth-largest FCPA settlement ever. The VimpelCom resolution is anticipated to be the first in a succession of actions against other telecom companies that have operated in Uzbekistan, including TeliaSonera and Mobile TeleSystems.

VimpelCom, the world’s sixth-largest telecommunications company, has securities publicly traded in New York. In an effort to enter the Uzbekistan telecom market, in 2006, VimpelCom purchased an Uzbek telecom company, Unitel LLC (Unitel), along with Bakrie Uzbekistan Telecom LLC (Buztel), a smaller company partially owned by an unidentified Uzbek government official who is reported to be Gulnara Karimova, the daughter of Uzbekistan’s president. Having already raised FCPA red flags with the Buztel acquisition, VimpelCom allegedly began, through Unitel’s executives and employees, a multiyear scheme to bribe the highly influential foreign official through structured and concealed payments. By 2012, Unitel may have paid more than $114 million in bribes to obtain telecommunications business in Uzbekistan. The public settlement documents state that bribes were disguised as various payments to a shell company that was beneficially owned by the foreign official.

In corresponding criminal investigations, both VimpelCom and Unitel were charged with conspiring to violate the FCPA’s anti-bribery and internal controls provisions. The DOJ also filed two civil complaints seeking an additional $850 million in forfeiture, which are amounts alleged to be the proceeds of illegal bribes paid to the Uzbek official. The SEC filed a civil complaint, charging VimpelCom with violating the FCPA’s anti-bribery provisions, books and records provisions and internal controls provisions. On February 18, the agencies announced that VimpelCom entered into a deferred prosecution agreement (DPA) with the DOJ and settled with the SEC. In a corresponding action, Unitel entered into a plea agreement and pleaded guilty before U.S. District Judge Edgardo Ramos (S.D.N.Y.). After various inter-agency credits, the combined total amount of U.S. and Dutch criminal and regulatory penalties paid by VimpelCom will be $795,326,398.40, making it one of the largest global foreign bribery resolutions in history.

According to the government, the result for VimpelCom could have been worse. Although VimpelCom did not self-report, the company substantially cooperated with the investigations and undertook significant efforts to provide evidence and employees for interviews. In outlining its relevant considerations for VimpelCom’s DPA, the DOJ stated that VimpelCom provided “all relevant facts known to the Company, including information about individuals involved in the FCPA misconduct.” VimpelCom received “full cooperation and remediation credit” for providing evidence uncovered during a previously conducted internal investigation. The company benefited from its “prompt acknowledgement of wrongdoing” and subsequent extensive remediation, which included the termination of wrongdoer officers and employees.

As part of its DPA, VimpelCom will conduct an overhaul of its compliance program. The company substantially upgraded its anti-corruption compliance program; retained new leaders of its legal, compliance and financial gatekeeper functions; and committed to enhancing its compliance program and internal controls. VimpelCom is also required to retain an independent compliance monitor for a term of three years.

VimpelCom’s failure to self-report the wrongful conduct it uncovered in its internal investigation, however, rendered a significant blow. The DOJ deemed the company ineligible for a significant financial discount or a non-criminal disposition.

What does this mean for the telecom industry?

It may be tempting in this case to write off the VimpelCom scandal as just one egregious outlier in an otherwise relatively benign compliance landscape.  But there are some important lessons to be taken from this case.

One: Update and review compliance policies thoroughly and often, especially when entering a new geographical market. Compliance teams and executive management should become knowledgeable of the foreign country’s local laws, potential local content requirements and local customs that could be illegal or invite scrutiny. Local compliance programs or compliance reviews should be tailored to the specific risks associated with the industry and the region.

Two: Encourage broad and integrated understanding and acceptance of compliance policies, with appropriate checks and balances.  VimpelCom’s board members, executives and employees all identified serious concerns with the company’s practices, yet the company’s internal controls still failed because of the obstructionist activity of certain management members. Don’t let this happen. Create and foster a culture of compliance at all levels and across multiple departments. Reach out to accounting and IT personnel, the employees who may be best suited to identify and report potential books and records violations. Institute mechanisms whereby red flags can be reported at any rung of the corporate ladder, and create policy backstops that will frustrate attempts to bypass compliance requirements.

Three: Properly resource compliance programs. This involves not just time, money and staff, but also corporate culture. If entering a new geographical market, institute an on-the-ground compliance team or easy local access to compliance located elsewhere. Foster an environment whereby the board and executive management inform and enforce compliance policies. Develop training modules specific to a new geographical market and require employees in the region to satisfy required training on a regular basis.


Tags: Tone at the Top
Previous Post

Keeping Pace with Technology and Risk

Next Post

Defining “Effective” Ethics and Compliance Programs

Floren Taylor

Floren Taylor

Floren thumbnailFloren Taylor is an associate in Bracewell’s New York office, where she is a member of the White Collar Criminal Defense and Special Investigations section. Her practice focuses on white collar criminal defense, securities enforcement and complex commercial litigation. Floren represents clients in connection with antitrust violations, securities fraud, pay-to-play schemes, Foreign Corrupt Practices Act (FCPA) compliance, public corruption and environmental crimes. She also assists corporate clients with internal investigations of potential misconduct, often in response to allegations of fraud or insider trading.

Related Posts

curiosity which door

Culture: Are You Curious Enough?

by Jim DeLoach
May 17, 2023

As a keystone provides integrity to an arch structure, culture infuses the shared values and attitudes that frame how an...

team bored

Team Tuning Out Same Old Compliance Messaging? Mix Things Up.

by Mary Shirley
April 26, 2023

You’ve got the CEO’s buy-in that your ethics and compliance program is a central part of the company’s culture. That’s...

storm approaching risk

3 Keys for Tough Times: Relevance, Culture and Alignment

by Jim DeLoach
April 19, 2023

The world is changing, and CEOs and senior executives are feeling the pressure from rapidly evolving markets. What are the...

remote leadership_office

Out of Sight, Out of Mind? Ethical Leadership in the Hybrid Age

by Asha Palmer
April 19, 2023

As workers and companies continue to embrace flexible arrangements, including a mix of in-person and remote work, the focus is...

Next Post
what makes an "effective" ethics and compliance program?

Defining "Effective" Ethics and Compliance Programs

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment Sanctions SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT