‘Get them all out!’: Algeria Three Years on after Panama Papers

‘Get them all out!’: Algeria Three Years on after Panama Papers

‘Get them all out!’: Algeria three years on after Panama Papers – and to mark World Press Freedom Day, Lyas Hallas, Algerian journalist – a member of ICIJ elaborates on the current situation of Algeria.

To celebrate the third anniversary of the Panama Papers – and to mark World Press Freedom Day – we’re speaking with reporters from around the world about the investigation each week.

For our final instalment, we spoke with the International Consortium of Investigative Journalists’ member Lyas Hallas. Lyas was the sole reporter to work on the Panama Papers investigation in Algeria, Africa’s largest country.

Like many of our partners, Lyas’ work is still having an impact. Most recently, authorities arrested some wealthy Algerians named in the Panama Papers and street protesters calling for the president’s resignation and an end to corruption waved banners that featured the businessmen’s faces.

THREE YEARS ON

‘Get them all out!’ The Panama Papers connections to Algeria’s latest revolution

Published on May 2, 2019, Reporting by Will Fitzgibbon

What was the biggest impact in Algeria after the Panama Papers’ revelations?

There was an immediate debate about assets held by Algerians overseas. The reaction shook the leaders of our country who had planned their retirements abroad. The Panama Papers also hit hard the businessmen who consort with politicians and who enjoy tax and banking advantages at home and yet who hide their money offshore. The revelations politically weakened ministers who were at the height of their power and others who were on the cusp of bouncing back.

One example was the then Industry Minister Abdesselam Bouchouareb, who was tipped to be the next prime minister before that became awkward due to the global firestorm in the wake of the investigation

Maybe my work contributed to bringing attention to the pillage of the country’s resources. – Lyas Hallas

What was your favorite moment of the Panama Papers investigation? What surprised you the most?

Favorite moment? A huge ‘catch’ when just one minute after I opened the Panama Papers database for the first time, I found Rym Sellal, the daughter of the then prime minister, Abdelmalek Sellal. It was very motivating.

I also didn’t expect to find the owner of an offshore company linked to the entourage of former energy minister Chakib Khelil who is at the heart of the SONATRACH corruption scandal, our state-owned oil and gas company.

Italy and Algeria had opened court cases and Italian judges had identified this offshore company as one of 17 used to launder $216.92 million (€194 million) in bribes. Yet neither Italy nor Algeria had called on Khelil as a witness. Ditto for the son of the former SONATRACH CEO who received six years in prison for corruption.

What also stuck with me about the Panama Papers is the interest of Algerians in this kind of story.  In two years, I published a dozen stories and there was a buzz every time. During the recent protests in Algeria, citizens took to the streets waving images of some of the people featured in his Panama Papers reporting. Lyas Hallas

What were the most significant reactions to your investigations?

The general public reacted well, which was satisfying… In Switzerland, a criminal court dismissed a case brought by an Algerian businessman based, in part, on my Panama Papers reporting.

I had to resign from the newspaper where I worked in order to get my investigation published. I had a story on the Minister of Industry at the time, Abdeslam Bouchouareb.

Bouchouareb put a bit of pressure on the editor – I don’t know what they said. Five days before the agreed publication date with ICIJ, I had to find another newspaper to publish my story… I found one easily, which was good.

I was harassed online by various digital players in the pay of government officials.

Some people said I was dancing to the tune of foreigners and others accused me of faking documents. Khelil wrote on Facebook, without naming me directly, that I was a “Zionist agent.” Obviously, I didn’t react to this kind of nonsense, which was mostly anonymous.

Some people even called me an “agent of Rebrab” [editor’s note: Issad Rebrab, Algeria’s richest man]. I had worked for 11 months in a newspaper where he is the majority shareholder and from which I resigned to publish my Panama Papers story. Yet Rebrab tried to sue me in France because of the Panama Papers.

For someone who has not followed anything, what has happened in Algeria now?

President Abdelaziz Bouteflika’s desire to seek a fifth term sparked massive demonstrations on February 22 that forced him to resign. Algerians have long lived through his power grab as a great collective humiliation. Bouteflika did leave, but the system that he built — even if it’s weakened — is still in place.

Every Friday during the protests, millions of people rallied in unity around the theme “Get them all out!” The term “all” referred to those widely-despised figures from the Bouteflika era who, in the eyes of the demonstrators, embodied mediocrity, injustice and corruption.

What’s the connection between your Panama Papers investigations and recent events?

It’s not my job to spark protests. Maybe my work contributed to bringing attention to the pillage of the country’s resources and to the lack of some people’s “tax patriotism.” Or maybe it accentuated the feeling of injustice among many Algerians given the impunity of some people I wrote about.

During the recent protests, one of the main slogans was “You have devoured the country, band of looters!” Some protest banners included photos of politicians and businessmen I exposed.

In response to the demonstrations, authorities jailed some of these businessmen, including Issab Rebrab, in order to calm protestors and temper the country’s anger. A few days ago, the Supreme Court reopened a case involving Khelil. They are not being investigated for what I wrote about, but for similar practices to the things I uncovered.

Can you give us a summary of your investigations around these recently arrested men?

Businessman Ali Haddad, and as I mentioned earlier Issad Rebrab, have been arrested.

My investigation of Haddad revealed the illicit transfer of foreign currency through a complex arrangement involving foreign partners in the group of companies that carries out infrastructure projects in Algeria. Anti-corruption investigations against Haddad have not yet been concluded, but he was arrested at the borders with Tunisia while trying to flee.

As for Issad Rebrab, he was detained on charges of “misrepresentation of illicit transfers of capital from and to foreign countries, overcharging of imported equipment and importation of second-hand equipment while he had benefited from customs, tax and banking benefits”. My investigation questioned his background and the origin of his fortune. Policy makers have always made it easy for businessmen close to them to access credit, import licenses and government contracts, while guaranteeing them impunity since for business in Algeria, political support is needed.

The Supreme Court has reopened the case of Chakib Khelil, who has fled the country.  Khelil is accused of bribery in a case involving contracts awarded by the state-owned oil company. My investigation revealed that his wife and his son were beneficiaries of offshore companies linked to a money laundering machine worth $220 million (€197 million) in commissions.

You are a veteran of journalism in Algeria. In what state was investigative journalism in Algeria before these demonstrations?

Investigative journalism in Algeria is fragile. It’s difficult to access information and Algerian media remains fundamentally based on opinion.

Even if Algerian media has some freedom in what it says, it doesn’t invest enough in going after real information. It’s subject to the government’s agenda and corporations’ marketing strategies. I would even say that it’s in a pretty sick state because it hasn’t evolved independently of the political forces now being protested against.

Algerian media didn’t develop an economic model based on its relationship with the audience that would have allowed financial independence. Advertising revenue has made the media dependent on advertisers and policymakers.

In short, much of the press is completely discredited. Especially given that the media itself was not untouched by corruption.

Algerians today are demanding a new kind of information and the current media are having a hard time satisfying this demand. Of course, there are small islands of resistance that try to offer quality information. But, it’s necessary to completely rebuild the system.

What is your hope for Algerian journalism after these protests and regime change?

I remain optimistic. The entire community of Algerian journalists is aware of the stakes. I hope that we will have the collective intelligence to set new rules of the game; rules that will establish healthy competition and favor new editorial practices to properly inform Algerians.

I don’t dismiss the value of Algeria’s press in the past, which emerged from struggles that saw journalists sacrifice their lives from generation to generation to be able to freely exercise their profession, especially in the 1990s, a decade in which terrorism had wreaked havoc on Algeria. We lost a hundred journalists and others who were murdered because they were journalists.

But the media system as a whole requires a re-foundation to clarify the ground rules. The opacity that Algeria’s media has evolved into exposes it to arbitrariness.

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Huge Impact of Stranded Fossil Fuel Assets

Huge Impact of Stranded Fossil Fuel Assets

Nature Climate Change proposed article on a study by J.-F. Mercure, H. Pollitt, J. E. Viñuales, etc. on how the huge impact of stranded fossil fuel assets could have on life in the future . Here are some excerpts and views of the mainstream world media on such study. In few words, this new study suggested that the momentum behind the technological change in global power and transportation sectors would cause a massive decline in the demand for fossil fuels in the near future and that will result in the quasi abandonment of huge fossil fuel installations worldwide. A good exemple could be the near to be concluded purchase of OxxonMobil’s ‘Raffineria di Augusta’ (pictured above) by Algeria’s SONATRACH.


Macroeconomic impact of stranded fossil fuel assets

Abstract:
Several major economies rely heavily on fossil fuel production and exports, yet current low-carbon technology diffusion, energy efficiency and climate policy may be substantially reducing global demand for fossil fuels1,2,3,4. This trend is inconsistent with observed investment in new fossil fuel ventures1,2, which could become stranded as a result. Here, we use an integrated global economy–environment simulation model to study the macroeconomic impact of stranded fossil fuel assets (SFFA). Our analysis suggests that part of the SFFA would occur as a result of an already ongoing technological trajectory, irrespective of whether or not new climate policies are adopted; the loss would be amplified if new climate policies to reach the 2 °C target of the Paris Agreement are adopted and/or if low-cost producers (some OPEC countries) maintain their level of production (‘sell out’) despite declining demand; the magnitude of the loss from SFFA may amount to a discounted global wealth loss of US$1–4 trillion; and there are clear distributional impacts, with winners (for example, net importers such as China or the EU) and losers (for example, Russia, the United States or Canada, which could see their fossil fuel industries nearly shut down), although the two effects would largely offset each other at the level of aggregate global GDP.

That’s Why They call Them Bubbles. Carbon Set for Biggest Pop in History.

June 6, 2018

Per The Guardian: Plunging prices for renewable energy and rapidly increasing investment in low-carbon technologies could leave fossil fuel companies with trillions in stranded assets and spark a global financial crisis, a new study has found.

A sudden drop in demand for fossil fuels before 2035 is likely, according to the study, given the current global investments and economic advantages in a low-carbon transition.

The existence of a “carbon bubble” – assets in fossil fuels that are currently overvalued because, in the medium and long-term, the world will have to drastically reduce greenhouse gas emissions – has long been proposed by academics, activists and investors. The new study, published on Monday in the journal Nature Climate Change, shows that a sharp slump in the value of fossil fuels would cause this bubble to burst, and posits that such a slump is likely before 2035 based on current patterns of energy use.

Crucially, the findings suggest that a rapid decline in fossil fuel demand is no longer dependent on stronger policies and actions from governments around the world. Instead, the authors’ detailed simulations found the demand drop would take place even if major nations undertake no new climate policies, or reverse some previous commitments.

That is because advances in technologies for energy efficiency and renewable power, and the accompanying drop in their price, have made low-carbon energy much more economically and technically attractive.

Dr Jean-François Mercure, the lead author, from Radboud and Cambridge universities, told the Guardian: “This is happening already – we have observed the data and made projections from there. With more policies from governments, this would happen faster. But without strong [climate] policies, it is already happening. To some degree at least you can’t stop it. But if people stop putting funds now in fossil fuels, they may at least limit their losses.”

By moving to a lower-carbon footing, companies and investors could take advantage of the transition that is occurring, rather than trying to fight the growing trend. Mercure said fossil fuel companies were likely to fight among each other for the remaining market, rather than have a strong impact on renewable energy businesses.

Prof Jorge Viñuales, co-author, said: “Contrary to investor expectations, the stranding of fossil fuel assets may happen even without new climate policies. Individual nations cannot avoid the situation by ignoring the Paris agreement or burying their heads in coal and tar sands.”

However, Mercure also warned that the transition was happening too slowly to stave off the worst effects of climate change. Although the trajectory towards a low-carbon economy would continue, to keep within 2C above pre-industrial levels – the limit set under the Paris agreement – would require much stronger government action and new policies.

That could also help investors by pointing the way to deflation of the carbon bubble before they make new investments in fossil fuel assets.

The paper supports the view of some policy and investment experts that economics and technology are now driving action on climate change, where before impetus was all from policymakers. Former UN climate chief Christiana Figueres told the Guardian, a year after Donald Trump announced the withdrawal of the US from the Paris agreement: “There is a big difference between the economics of climate change and the politics of climate change. Is Trump going to stop that advance [by businesses towards low-carbon technologies]? I don’t think so.”

Frédéric Samama, of Europe’s biggest asset manager Amundi, also believes investors have reached a “tipping point”, in relation to taking action on greenhouse gases through their portfolio management. He told Bloomberg last month that “until recently, the question” of climate change was “not on their radar screen”.

Bloomberg:

The world’s deepest-pocketed investors are starting to take climate change seriously, according to Amundi SA.

“We are really observing a tipping point among the institutional investors on climate change,” said Frederic Samama, co-head of institutional clients at the Paris-based firm. “Until recently, that question was not on their radar screen. It’s changing, and it’s changing super fast.”

Risks from global warming range from damage to physical assets from extreme weather to falling prices on fossil fuel-related assets, as the world moves away from burning coal and oil. Bank of England governor Mark Carney has repeatedly warned that these risks are not priced in adequately and that investors may have exposure to a “climate Minsky moment” if they don’t take action.

Amundi’s remarks hold weight because it has 1.4 trillion euros ($1.6 trillion) under management, making it the largest asset manager in Europe. It runs the world’s largest green bond fund with the International Finance Corp. and is planning to deploy $2 billion into emerging markets. Mainstream investors are beginning to recognize both the threats and opportunities coming from climate-related issues, Samama said.

“If we have this major shift required in terms of how we manage the planet, for sure it will impact the asset prices,” he said. “Can we evaluate the automakers without taking into account the new bans of diesel cars? Can we evaluate the fossil fuel industry without taking into account the risks of regulation related to the drop of the price of renewable energy?”

Nature Climate Change – Macroeconomic Impact of Stranded Fossil Fuel Assets:

Several major economies rely heavily on fossil fuel production and exports, yet current low-carbon technology diffusion, energy efficiency and climate policy may be substantially reducing global demand for fossil fuels1,2,3,4. This trend is inconsistent with observed investment in new fossil fuel ventures1,2, which could become stranded as a result. Here, we use an integrated global economy–environment simulation model to study the macroeconomic impact of stranded fossil fuel assets (SFFA). Our analysis suggests that part of the SFFA would occur as a result of an already ongoing technological trajectory, irrespective of whether or not new climate policies are adopted; the loss would be amplified if new climate policies to reach the 2 °C target of the Paris Agreement are adopted and/or if low-cost producers (some OPEC countries) maintain their level of production (‘sell out’) despite declining demand; the magnitude of the loss from SFFA may amount to a discounted global wealth loss of US$1–4 trillion; and there are clear distributional impacts, with winners (for example, net importers such as China or the EU) and losers (for example, Russia, the United States or Canada, which could see their fossil fuel industries nearly shut down), although the two effects would largely offset each other at the level of aggregate global GDP.

Forbes:

Some of the world’s biggest investors have called on global leaders to scale up their climate change ambitions, increase investment in the switch to a low-carbon economy and help companies to reduce their climate risks.

The call comes as a new report reveals that the G7 nations – the U.S., France, Germany, Canada, Italy, Japan and the U.K. – are still spending at least $100 billion subsidizing fossil fuels even though they have pledged to end such subsidies by 2025 .

Some 288 investors with more than $26 trillion in assets under management have written to the leaders of the G7 nations ahead of their summit in Canada this week, stating that “the global shift to clean energy is under way, but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and the financial system to climate risks .”

“We are concerned that the implementation of the Paris Agreement is currently falling short of the agreed goal of ‘holding the increase in the global average temperature to well below 2-degrees Celsius above pre-industrial levels.’” they added.

The investors, which include Allianz Global Investors, Aviva Investors, DWS, HSBC Global Asset Management, Nomura Asset Management, Australian Super, and Calpers, say that they are doing their part by making significant investments into low-carbon assets, incorporating climate change scenarios and climate risk management into their investment processes and engaging with the largest greenhouse gas emitters

Offshore Deals that deprive Africa of Billions

Offshore Deals that deprive Africa of Billions

Offshore Deals that deprive Africa of Billions . . .

The ICIJ, producer of the Panama Papers has published an article written by Will Fitzgibbon on July 25, 2016. It is about those Offshore Deals that deprive Africa of Billions; commonly known thing by many locals, members of the public, journalists and all, did finally make it through to the long-awaited international audience.  It addresses issues of that nature that lasted only too long unchallenged on the African continent.

Once again, it looks as if, Algeria is doing it one more time, being at the forefront not of Africa’s liberation from colonisation but this time from perverse behaviour in the world of business. 

Excerpts of this article are reproduced with our compliments to the author / publisher, in MENA-Forum for their obvious interest to all our members and readers generally.  

Secret Offshore Deals Deprive Africa of Billions in Natural Resource Dollars

The Panama Papers show politicians and mining, oil and gas interests benefit from secrecy and dubious multimillion dollar transfers

◾Twelve of 17 companies under investigation by authorities in Italy in relation to a $10 billion oil and gas deal in Algeria were created by Mossack Fonseca

◾Italian authorities called one offshore company “a crossroads of illicit financial flows”

◾Dozens of companies created by Mossack Fonseca have been involved in law suits or public allegations of wrongdoing, according to an ICIJ analysis

When he wasn’t aboard his yacht, Farid Bedjaoui held court in the Bulgari Hotel in Milan, a renovated 18th century palace nestled between the botanical gardens and the La Scala theatre.  Over five years, Bedjaoui’s hotel tab there exceeded $100,000.

In the plush rooms and the granite-lined lobby, Bedjaoui met with Algerian government officials and executives from Saipem, the Italian energy giant.  Their agenda, according to witnesses later interviewed by Italian prosecutors: arranging some $275 million in bribes to help the energy company win more than $10 billion in contracts to build oil and gas pipelines from the North African desert to the shores of the Mediterranean.

To shift the bribe money between countries, Bedjaoui used a cluster of offshore companies that helped him shield the transactions from scrutiny, Italian prosecutors claim.  Twelve of the 17 shell companies linked to Bedjaoui were created by Mossack Fonseca, the Panama-based law firm that is at the centre of the Panama Papers scandal, a review of the law firm’s internal records by the International Consortium of Investigative Journalists and other media partners has found.

The garden at the Bulgari Hotel in Milan. Photo: bulgarihotels.com

Italian investigators described one of those companies, Minkle Consultants S.A., as a “crossroads of illicit financial flows” that channelled millions of Dollars from subcontractors to an array of recipients whose identities are still being untangled.  Prosecutors allege Bedjaoui used one company set up through the law firm to funnel as much as $15 million to associates and family members of Algeria’s then-energy minister.

The cross-border bribery scandal is one of dozens of cases in Africa in which companies created or administered by Mossack Fonseca have played a role in oil, gas and mining deals that have spawned public allegations of tax dodging, corruption, environmental destruction or other misconduct. In all, ICIJ’s review identified 37 companies within the Panama Papers that have been named in court actions or government investigations involving natural resources in Africa.

Ventures that drill or dig for oil, gas, diamonds, gold and other resources have long been dogged by evidence that contracts are often secured through bribery and other corrupt tactics that benefit a few and harm average citizens. Suspect mining and energy deals are usually organized through secretive companies and hard-to-trace bank accounts, corruption experts say.

“Companies may be given access to lucrative extractive projects because their owners are politically connected, or because their owners are willing to engage in questionable deals aimed at generating quick profits for a few rather than benefits for wider society,” Fredrik Reinfeldt, former prime minister of Sweden and now head of the Extractive Industries Transparency Initiative, told ICIJ.

He said the use of anonymous companies makes it harder to prevent money laundering and corruption because it allows wrongdoers to “hide behind a chain of companies often registered in multiple jurisdictions.”

ICIJ’s review of Mossack Fonseca’s internal records shows that the Panama-based law firm is a major provider of secrecy to companies involved in extractive industries. The firm’s internal files include more than 1,400 companies whose names refer to mining, minerals, oil, petrol or gas.  Other less explicitly named companies – including the 12 companies allegedly used by Bedjaoui in the Algerian energy deal – also played roles in the extractive sector, the files show.

Mossack Fonseca’s files reveal offshore companies that were established to own, hold or do business with petroleum, natural gas and mining operations in 44 of Africa’s 54 countries. Many of them are controlled by politicians, their family members and business associates. Often, the oil, gas, gold and diamonds formed beneath the earth’s surface over millions – even billions – of years are traded by shadow companies that have existed for months.

Companies created and assisted by Mossack Fonseca include at least 27 subsidiaries of one of the world’s biggest gold producers, the mining behemoth AngloGold Ashanti and its predecessor. AngloGold told ICIJ it complies with relevant tax laws and that its offshore companies held investments and allowed it to “mitigate ‘double taxation.’”

Mossack Fonseca declined to answer detailed questions for this story. It told ICIJ that “our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries. As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound.”

The law firm added: “Filing legal paperwork to help incorporate a company is a very different thing from establishing a business link with or directing in any way the companies so formed. We only incorporate companies, which just about everyone acknowledges is important, and something that’s critical in ensuring the global economy functions efficiently.”

Saipem, the Italian energy company, told ICIJ it is “fully cooperating” with prosecutors and it has “implemented significant managerial and administrative restructuring measures.”  External consultants reviewed the company’s books, Saipem said, and “found no evidence of payments to Algerian public officials through the brokerage contracts or subcontracts examined.”  In February 2016, an Algerian court found a Saipem subsidiary guilty of fraud, money laundering and corruption in obtaining contracts from Algeria’s national oil company, Sonatrach.

Criminal charges have been filed against Bedjaoui by Italian authorities.  Prosecutors allege that he inflated contracts for the benefit of Algerian officials, adding a standard cut for himself, which earned him the nickname “Mr. 3 Percent” after police found the ratio scrawled on Bulgari Hotel stationery during a raid.

Interpol issued a Red Notice – an international alert for a wanted person – on Bedjaoui at the request of Italian authorities.

Bedjaoui, the nephew of a former Algerian foreign minister, is currently living in a Beverly Hills-inspired gated community in Dubai.  He did not reply to repeated requests from ICIJ for comment.

In previous responses to the media, his lawyers have denied he was involved in any wrongdoing.  They insist that, as a thirty-something management graduate, he could never have wielded enough influence among Algeria’s political, military and business elites to coordinate a $275-million-dollar bribery scheme.

The Saipem-Sonatrach bribery case fits a pattern in Africa and other developing regions, where countries with the richest natural endowments often lose the most money offshore.

Between 2004 and 2013, Algeria, home to the second-largest oil reserves in Africa, lost an average of $1.5 billion annually through tax avoidance, bribery, corruption and criminality, the research group Global Financial Integrity estimates. Across the continent, the United Nations estimates at least $50 billion each year goes unaccounted for due to illicit money flows.

Read more at the ICIJ’s website address given above.

Anti-corruption summit in London

Anti-corruption summit in London

devex published an article on May 13th, 2016 about the recently held anti-corruption summit in London .  Excerpts of it are reproduced here.  Do please tweet the author for any comments otherwise get back to this site for any thought sharing.

Anti-corruption summit outcomes: Promises for the world’s poorest

Written by Molly Anders

Nigerian President Muhammadu Buhari doesn’t want an apology from UK Prime Minister David Cameron for calling his country “fantastically corrupt.”   What he wants, he told audience members at the civil society event, “Tackling Corruption Together” in London on Wednesday, is the return of assets stolen from Nigeria and currently being held in British banks.

Speaking ahead of an anti-corruption summit in London on Thursday, Buhari underlined the role developed countries play in propagating corruption, money laundering and illicit cash flows, often cutting into the potential domestic resources of developing countries and hurting the world’s poorest.

The summit was convened by Cameron in the wake of the Panama leaks, which revealed the identities and financial activities of more than 200 clients of Panama-based corporate service provider Mossack-Fonseca. While largely technically legal, the revelations turned the spotlight on the exploitative effects of tax havens and offshore finance on developing economies and brought renewed calls for international action against corruption.

Adrian Lovett, interim deputy chief executive of the ONE Campaign told Devex by phone that he was “pleased how much of that poverty agenda was central at the summit as the first and primary reason to push forward in the fight against corruption.”

Another promising shift for developing countries, said Stephen Twigg, member of the Parliament and chair of the International Development Committee, could be the announcement of a new “institutional integrity network” designed to foster developing countries’ capacities to fight corruption.

“We look forward to learning more about how U.K. institutions, such as the National Audit Office and National Crime Agency, will support the strengthening of counterpart agencies in countries such as Nigeria, Tanzania and Kenya and, consequently, those countries’ efforts to achieve SDG 16,” Twigg said in an email to Devex.

Commitments for change

Among the summit’s most significant achievements were commitments from six countries — Great Britain, Afghanistan, Kenya, France, the Netherlands and Nigeria — to establish open registries of the owners of companies operating within their borders. . .

Read more in the above mentioned publication.

 

Bribery and Corruption offences in the UAE

Bribery and Corruption offences in the UAE

The Wall Street Journal published this story on 22 February 2016 that involves a case of corruption in the UAE. Sweett Group CSG.LN -1.28% PLC holds the distinction of becoming the first company sentenced under Section 7 of the U.K. Bribery Act, which pertains to corporate failure to prevent bribery. Legal experts told Risk & Compliance Journal the sentencing serves as a reminder to companies not to be apathetic about the law, despite a paucity of prosecutions, and that the law has a broad reach. Bribery and corruption offences in the UAE are therefore a reality to be aware of when embarking on any job in the country.

The same item of news was also covered by The Construction Index as follows.

Sweett Group has been fined £1.4m and handed a confiscation order of £851,152 for bribery and corruption offences in the United Arab Emirates.  

The sentence was handed down at Southwark Crown Court on Friday 19th February 2016 following the company’s admission of guilt last December to breaching Section 7(1) of the UK Bribery Act 2010 (failing to prevent an associated person from bribing another to attract or retain business for the company).

The Serious Fraud Office began investigating Sweett on 14th July 2014. It discovered that its subsidiary Cyril Sweett International had paid £680,000 in bribes to Khaled Al Badie, the vice chairman of the board and chairman of the real estate and investment Committee of AAAI to secure the award of a contract with AAAI for the building of the Rotana Hotel in Abu Dhabi.

Judge Martin Beddoe said that the construction consultancy had deliberately tried to mislead Serious Fraud Office (SFO) investigators. He described the offence as a system failure and said that the offending was patently committed over a period of time.

The confiscation has to be paid within three months; 50% of the fine is to be paid by February 2017, with the remaining sum paid by February 2018.  The company has also been instructed to pay £95,000 to cover the prosecution’s legal costs.

SFO director David Green said: “Acts of bribery by UK companies significantly damage this country’s commercial reputation. This conviction and punishment, the SFO’s first under section 7 of the Bribery Act, sends a strong message that UK companies must take full responsibility for the actions of their employees and in their commercial activities act in accordance with the law.”

SFO’s investigation into certain individuals continues.

Sweett Group chief executive Douglas McCormick sought to draw a line under the affair. He said: “Sweett Group’s Middle East legacy issue is closed and this marks an important step in the delivery of the company’s new strategy.

“Over the last year, the company has been transformed with the appointment of a new leadership team, which has successfully addressed key issues facing the business. The group has delivered on a number of strategic objectives including the sale of the APAC and India business, resolution of the SFO investigation, withdrawal from the Middle East market and the re-organisation of the business into five regions.

“We have strengthened our internal systems, controls and risk procedures, and refined our strategy, focusing on profitability and cash flow. We are excited by the opportunities we see ahead in our core markets the UK, Europe and North America, and we look to the future with confidence.”

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