We protect 6 of the world’s top ten banks and 7 of America’s ten largest corporations

Electronics Industry

Key Challenges: Since the global financial crisis of 2008, countries around the world have stepped up efforts to prosecute companies for regulatory violations, presumably in an effort to recoup economic losses. Companies in the electronics industry are especially exposed to increased regulatory action due to the amount of export/import activity they conduct. In addition, electronics companies are vulnerable to the extent that they utilize third party distributors, resellers and other agents—each of whom can create charges against the parent company from illegal payments made on the company’s behalf.

Regulatory violations often result in severe penalties and can slow production. As the costs associated with regulatory violations have grown, many companies have elevated the establishment of a comprehensive, dynamic compliance program to the forefront of their global expansion strategy.

WorldCompliance Solution:

World-NEO >> Interactive Screening and Monitoring

World-NEO allows your third parties to register with a central web-based portal. World-NEO automatically assigns a risk score to every agent and distributor, and performs initial and ongoing due diligence. Learn more.

Case Study

Company: Siemens AG
Charges: Bribing government officials
Penalty:

$449 million


Siemens AG builds locomotives, traffic control systems, electrical power plants, medical equipment and electrical components. The company, based in Germany, employs more than 428,000 people and operates in approximately 190 countries.

On December 13, 2011, the SEC charged seven former Siemens executives with violating the Foreign Corrupt Practices Act for their involvement in a decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards (DNIs) for Argentine citizens. The executives worked at Siemens and its Argentine subsidiary, though one of the executives left Siemens in order to act as a payment intermediary. According to the SEC, Siemens paid more than $100 million in bribes to two former Argentine presidents and former cabinet members, among others. The executives falsified documents and participated in meetings in the U.S. to negotiate the terms of bribe payments.

Initially, the bribes were paid to secure a $1 billion contract to produce a DNI for every Argentine citizen. When a change in political administrations resulted in the cancellation of the contract, Siemens paid additional bribes in a failed effort to revive the contract. When the company later instituted an arbitration proceeding to recover its costs and expected profits from the canceled contract, Siemens paid more bribes to suppress evidence that the contract had been obtained through corruption.

“Backroom deals and corrupt payments to foreign officials to obtain business wear away public confidence in our global marketplace,” said FBI Special Agent in Charge Hosko of the Washington Field Office’s Criminal Division. “The investigation into this decades-long scheme serves as an example that the FBI is committed to curbing corruption and will investigate those who try to advance their businesses through foreign bribery.”

Siemens AG and Siemens Argentina agreed to pay fines of $448.5 million and $500,000, respectively.

WORLD-NEO

Risk-Scoring Vendor Screening Software