Written by Nicole Di Schino, principal consultant at spark compliance
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Anti-bribery enforcement came in like a lion during the first week of March with a $661 million multi-jurisdictional settlement with international commodities trading company, Gunvor. The agreement settles allegations that Gunvor paid more than $97 million in bribes to Ecuadorean government officials. Those officials, in exchange, arranged for Gunvor, a private trading company, to participate in an oil-backed loans program designed for state-owned entities.
The bribery scheme described in the Gunvor indictment is complex and multi-layered. According to the papers, for nearly a decade Gunvor employees partnered with third-party intermediaries to pay bribes to officials at Ecuador’s state-owned oil company. In exchange, the government officials arranged for Gunvor to win contracts to provide a series of oil-backed loans to Petroecuador.
These loans were made through other Ecuadorian state-owned entities. Routing the loans in this way disguised Gunvor’s involvement and enabled the commodities trader to avoid competitive bidding processes and obtain contracts that, as a privately held company, it wouldn’t have been eligible to obtain directly.
Using the Gunvor Settlement During Training
It is easy for employees that we are training to dismiss corruption as something that happens elsewhere – in a different industry, in a higher-risk market, or just not at our company. Using real-life scenarios to illustrate compliance risks is an effective way to counter this type of thinking.
Yet, it can be challenging to incorporate fact patterns that don’t align with your business model. Don’t let that stop you. By focusing on the underlying risk, you can incorporate bits and pieces of any recent settlement into your training materials. The following topics are great places to add a bit of the recent Gunvor matter to your compliance training.
Training Takeaway 1: Someone Is Always Watching
Long gone are the days when the DOJ and the SEC were the only anti-corruption cops in town. Gunvor’s DOJ settlement involved credit for criminal fines paid to both Swiss and Ecuadorean authorities. And the DOJ press release described the resolution as the result of “significant cooperation” from eight separate countries (the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland).
When speaking with your employees, particularly those outside enforcement hubs like the U.K. and the U.S., try emphasizing cases from local authorities or global settlements involving smaller jurisdictions. Doing so helps employees understand the breadth of the risk their organizations face in a tangible way.
It’s also helpful for employees to understand that foreign governments often share information. Stress that misconduct carried out far from the company’s headquarters, can easily make it back to hometown regulators.
Training Takeaway 2: Avoid Third-Party Trickiness
Like many companies, Gunvor’s anti-corruption troubles involved the use of intermediaries. According to the indictment, Gunvor used a shell company to enter into service agreements with a pair of brothers, with the understanding that a portion of the fees the brothers received would be used to pay bribes to Ecuadorian officials.
Midway through the scheme, Gunvor and the brothers began doing business through a separate shell company owned by the same brothers. Notably, the amounts being paid to the brothers and the terms of the service agreement were “substantially similar.”
When training on third-party risk, I like to point to examples like this one and discuss the risk of what I lovingly refer to as “shenanigans.” Describing and naming such deliberate obstructive behavior is a powerful way to enforce the message that business shouldn’t be done at any cost. As I’m fond of saying during training, “if you are tempted to be tricky, you should probably stop and call compliance first.”
Training Takeaway Three: If You Have to Hide It, You Probably Shouldn’t Be Doing It
The Guvnor statement of facts contains a full section detailing the measures the conspirators took to conceal the bribery. For example, a Gunvor manager who was involved in the scheme instructed a business development professional (also involved in the scheme) to only communicate about the matter using his personal email account.
Additionally, members of the conspiracy used aliases to refer to their co-conspirators, rather than their real names.
While it may seem like an obvious point, these types of measures are the hallmarks of many types of employee misconduct and it’s worth reminding employees that if they feel the need to hide something or muddy the waters, they probably shouldn’t be doing it.
Training Takeaway Four: Pretending You Don’t Know About Misconduct Won’t Protect You
The Gunvor managers also allegedly went to great lengths to be able to say that they weren’t aware of the bribery scheme. According to the statement of facts, Gunvor managers specifically told the brothers they were conspiring with that they “did not want to know” about payments that were being made and instructed them to avoid talking about bribery.
These facts serve as good reminders for employees, particularly those who supervise third parties, that deliberately avoiding knowledge of misconduct will not protect you or the company. In fact, as was the case in the Gunvor matter, such conduct could be used against not just the company but against the individual manager.
Training Takeaway Five: The Internet Is Forever
While many of us in the compliance world have spent a lot of time thinking about ephemeral messaging, many of our employees assume that any business they conduct on WhatsApp and other messaging platforms disappears more rapidly than traditional business emails.
The Gunvor case demonstrates that the government is actively looking at these types of messages when building cases, citing specifics about messages that were exchanged via WhatsApp in the indictment.
This can be used to remind employees that no matter what platform they are using, all business communications should be above board and comply with the company's policies and values. As I liked to remind my litigation clients, the internet is forever.
