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July 2013


Throughout July, news sources reported that China's Public Ministry of Security is investigating allegations of bribery involving GlaxoSmithKline's ("GSK") operations in China. The allegations are that GSK used a variety of mechanisms to pay bribes to doctors and other medical professionals in China to help sell GSK's drugs. At least 20 GSK employees have been detained in China in the ongoing investigation. According to news reports, the Serious Fraud Office in the United Kingdom has initiated a preliminary investigation of the allegations.


In early July, Wynn Resorts said that the U.S. Securities & Exchange Commission stated that it would not pursue formal enforcement against the company for donations Wynn Resorts made to the University of Macau. The U.S. Department of Justice's investigation of the situation is ongoing.


In July, there have also been updates to the Compendium entries for Alcoa, SNC-Lavalin, and Siemens.


We began the month by discussing US President Barack Obama's recent trip to Africa, which was aimed at encouraging US-African economic and private-sector engagement.  Although China remains the number one investor in Africa, President Obama's trip was seen as part of ongoing efforts to encourage American investors to engage more with African business.  And although Africa presents many regulatory risks, including bribery and extortion, compliance professionals are finding new ways to combat this challenge by engaging with African businesses to conduct increased due diligence.


We also discussed  this month some compliance concerns surrounding the July 4 holiday, particularly those posed by U.S. embassies abroad which traditionally host galas, receptions and various events to mark the occasion.  Several member companies have told us that these festivities are often accompanied by solicitations for donations, which can raise some compliance red flags.  Find out how companies are responding.


In Things Fall Apart, we explored the many internal processes which lead bribery schemes to unravel.   Disgruntled former employees, captured crooks, dissatisfied business partners - these are just some of the ways in which bribes, once paid, can lead to ruin down the road.  We recommend that companies do themselves a favor by categorically saying no to all forms of bribery, no matter the situation.


We also ran a two-part series this month on the future of due diligence.  In part one, we looked at TRAC, the baseline due diligence online platform for lower risk third parties.  The "next generation of due diligence" offers a robust due diligence solution, available quickly and at a reasonable price.  In part two, we discussed TRACEcertification, a due diligence service designed for higher risk relationships.  Both TRAC and TRACE are unique in that they allow the third party intermediary to own their verified due diligence information, unlike traditional due diligence solutions.


Finally, we continued this month with our TRACE profile series in which we interview a TRACE employee to find out best practices in due diligence.  This month we spoke to Yicun Chen, a Chinese lawyer working at TRACE.   Yicun discussed some of the difficulties in conducting due diligence of Chinese companies and the importance of having cultural expertise when vetting a third party.


Stay tuned next month for more from the TRACE Blog!


As we come to the end of the month, it's time, once more, to reflect back on the biggest anti-bribery stories.  Read about the stories below and then vote which one you think was the most significant.


GlaxoSmithKline China Scandal - Chinese authorities have arrested as many as 30 GlaxoSmithKline (GSK) employees as part of a government probe pertaining to allegations of bribery by the company.   The probe is reportedly part of a larger crackdown on the healthcare industry in China.


Dodd Frank Rules Subject to Judicial Scrutiny -- In a ruling issued on July 2, the DC District Court vacated the extractives industry payment disclosure rule, adopted pursuant to Section 1504 of the Dodd-Frank Act.  The same court, later in the month, upheld the newly adopted Conflict Minerals Rule, however, which imposes certain disclosure requirements for companies that use "conflict minerals" originating in and around the Democratic Republic of the Congo.


Indonesian Enforcement Agency Wins Recognition.  The Commission for the Eradication of Corruption, Indonesia's independent anti-graft body, won a 2013 Ramon Magsaysay Award, which is sometimes called the Asian equivalent of the Nobel Prize.  The Commission for the Eradication of Corruption has prosecuted nearly 100 government officials and others since its first investigations in 2003.  Recipients will receive a cash prize of $50,000.


Bo Xilai Indicted.  More than a year after being forced to leave office, Bo Xilai, Chinese Communist Party Secretary of Chongqing, has been indicted by Chinese authorities on allegations of abuse of power and bribery.  Xilai was once a rising star in the Communist Party and his indictment is widely seen as the most high-profile case of corruption in Chinese politics in recent memory. 


Transparency International publishes annual Global Corruption Barometer Index.  Transparency International, the international anti-bribery group, published this month its annual the Global Corruption Barometer.  The  survey questioned 114,000 respondents from 107 countries.  Overall, more than one in four respondents reported having paid a bribe in the last 12 months.


OECD Names New Anti-Bribery Chair.  The Organization of Economic Cooperation and Development's Working Group on Bribery named Drago Kos to be its next chairman, beginning January 1, 2014.  Kos replaces Mark Pieth, who's served as chair of the bribery working group since 1990.

Benchmarking: Third Party Training
TRACE is pleased to share the results of a recent benchmarking survey on how multinational companies manage the anti-bribery training of their third parties. An increasing number of companies now require anti-bribery training for at least a portion of their third parties with some requiring the training annually.  To see the results of this benchmarking survey, please click here.
Books, Articles & Reports

 How to Pay a Bribe: Thinking Like a Criminal to Thwart Bribery Schemes

Last year, TRACE published a fascinating and instructive book about how bribery schemes are devised, carried out and covered up. TRACE is now in the process of compiling the 2013 edition. We invite in-house counsel and anti-bribery practitioners to "join the conversation" by sharing their corruption (and compliance!) stories by writing to

 In Waging War on Corruption: Inside the Movement Fighting the Abuse of Power  Frank Vogl, one of the leaders of the worldwide anticorruption movement, shares a history filled with stories of heroes and victims of corruption. He chronicles the successful campaigns by enormously courageous civil society activists, journalists, and public prosecutors and explains the crucial challenges that now must be confronted. At stake is nothing less than our global security, the reduction of poverty, the stability of our economic and financial systems, and the cause of freedom and democracy. Waging War on Corruption will be of interest to reader of politics and government, business, human rights, and law. 



Citizens Against Corruption: Report From The Frontline tells the story of how groups of courageous and dedicated citizens across the globe are taking direct action to root out corruption. It shows how people are no longer prepared to accept the predatory activities of dishonest officials and are challenging their scams. It draws on over 200 unique case studies that describe initiatives undertaken by 130 civil society organisations (CSOs) which engage directly with public agencies to stop the bribery and extortion that damages peoples' lives and obstructs social and economic progress. This book challenges the notion that, at best, civil society can only have a marginal impact on reducing corruption and argues that aid donors need to radically rethink their assistance for governance reform.  


The NHL and Compliance: Some Thoughts From Alexandra Wrage On Doing Business Ethically

28 June 2013 

Thomas R. Fox  


12 July 2013

Alexandra Wrage 


5 Tips for Avoiding Email Compliance Traps

29 July 2013

Alexandra Wrage  


Foreign Corrupt Practices Act: An Update On Enforcement and SEC and DOJ Guidance

July 2013

Lawrence James Trautman &  Kara Altenbaumer-Price 


TRACEsort is a customizable online risk asssessment tool that helps companies quickly, credibly and cost-effectively assess third party risk. The TRACEsort service is initiated with a consultation by an experienced TRACE attorney in order to develop an individually crafted questionnaire and scoring system based on the company's risk profile. A unique TRACEsort portal is custom built and third parties worldwide are instructed to access the portal and answer sets of questions tailored to their particular relationship to the company. TRACEsort generates a report with a risk score for each intermediary, identifying it as needing a low, medium or high risk due diligence review.

TRACEsort's risk analysis can be enhanced ith Red Flag Logic, a custom software program that integrates TRAC data into a third party's risk profile. TRAC, developed by TRACE last year, is the only global online platform that allows companies and their business partners to store and share verified baseline due diligence information with one another over the web at almost no cost.

To learn more, please contact


Advance your career before the summer ends. Apply for TASA by August 30 and receive a $200 tuition discount.



TASA graduates are recognized by employers as anti-bribery specialists. By enrolling in TASA and passing the accreditation exam, you will both join an exclusive community of anti-bribery compliance professionals and help further your career. To being the application process, visit



3rd India Summit on Anti-Corruption 

September 23 - 24, 2013, New Delhi


6th FCPA Boot Camp

October 1-2, 2013, San Francisco, CA


*TASA candidates may earn 12 credits for attending a full two-day FCPA Boot camp; 3 credits per day for attending any other FCPA/anti-corruption event; and 2 credits for workshops. A $200 registration discount is offered to TASA candidates.

Join Cisco, Mubadala, ABB, 3M Company, FH Bertling Holdings, and other industry leaders for our 2nd Global Anti-Bribery In-House Network (GAIN) Conference. This is an excellent opportunity for attorneys from TRACE partner law firms and TRACE member and non-member companies to meet while learning first-hand about compliance challenges and enforcement trends around the world. 
Click here to view agenda and speakers.


If you are interested in speaking, please contact Virna Di Palma at 


Visit our GAIN webpage for program updates and registration details. Register early to guarantee your place.


TRACE presents its first anti-bribery training workshop in Israel. Employees and intermediaries of TRACE member companies are invited to attend at no charge.


The Agenda is available here. Please visit TRACE workshops for program updates and registration details.

Save the Date! 10th Annual TRACE Forum

March 26-27, 2014, St. Regis, Washington, DC

TRACE members should plan now to attend what has become the premier anti-bribery benchmarking conference. The 10th Annual TRACE Forum will be held March 26-27, 2014 at the St. Regis in Washington, DC. Companies using TRAC should also plan to attend the TRAC working group the afternoon of March 25, 2014. The program is currently under development. Please visit our Forum webpage for program updates and registration details.


Corruption & Compliance South & South East Asia Summit  

September 17-19, 2013 
Hosted By: Beacon 
* Alexandra Wrage, TRACE President, speaking 

Oil & Gas Anti-Corruption & Compliance Congress
Houston, TX
September 23, 2013
Hosted By: Momentum
* Alexandra Wrage, TRACE President, speaking
TRACE Members receive a 15% discount. 

3rd India Summit on Anti-Corruption
New Delhi, India
September 23-24, 2013
Hosted By: American Conference Institute
TRACE Members receive a $200 discount.

Compliance and Economic Crime in Financial Institutions
Moscow, Russia
September 26-27, 2013
Hosted by: C5
TRACE Members receive a 10% discount. 

6th FCPA Boot Camp
San Francisco, CA
October 1-2, 2013
Hosted By: American Conference Institute
TRACE Members receive a $200 discount. 

12th Annual Compliance & Ethics Institute  

Washington, DC 
October 6-9th, 2013 
* Alexandra Wrage, TRACE President, speaking


IACCM Americas 2013 Conference
Phoenix, AZ
October 8-9, 2013
Hosted By: IACCM
*Alexandra Wrage, TRACE President, speaking 
New York, NY
Oct 28-29, 2013
Hosted By: Momentum
*Alexandra Wrage, TRACE President, speaking 
TRACE members receive a 15% discount.
2nd Economic Sanctions & AML for Financial Institutions
London, UK
October 9-10, 2013
Hosted by: C5 
TRACE Members receive a 10% discount.  
World Bribery & Corruption Compliance
London, UK
October 15-17, 2013
Hosted by: IBC Legal Conferences
TRACE Members receive a 20% discount. Please quote VIP code: FKW82396TRCL when registering. 

New York, NY
October 28-29, 2013
Hosted By: Momentum
* TRACE representative speaking
TRACE Members receive a 15% discount. 

London, UK
November 4-7, 2013
Hosted By: HansonWade
*Alexandra Wrage, TRACE President, speaking 
FCPA Conference
Washington, DC
November 18-21, 2013
Hosted By: American Conference Institute 
TRACE Members receive a $200 discount.


International Regulatory Updates



People's Republic of China 

Firm: K&L Gates LLP (


In China, effective as of 01 January 2013, the Interpretation on  Criminal Bribery Cases introduced additional factors that may aggravate the sentence in cases of individuals offering bribes to state functionaries, including:


  • Bribery of an amount exceeding RMB 200,000
  • Bribery offered to a state functionary with food, medicine, work safety; environmental protection or other supervision and administration duties for the purpose of committing any illegal or criminal activity, which seriously damages the people's livelihood and endangers the life and property safety of the general public. In addition, bribes offered on multiple occasions but that have not previously been accounted for shall be punished on the cumulative value of the bribes.

Further, in March 2013, a draft of the Procurement Regulations was submitted to China's State Council for review and adoption.  The draft defines, in detail, the type of relationships that constitute "conflict of interests" as referred in the Government Procurement Law which provides that procurement personnel or related personnel who have a conflict of interest with the supplier must withdraw from procurement activities. 


International regulatory updates are provided by TRACE Partner Law Firms. For more information on TRACE Partner Firms, please visit the TRACE Resource Center

News & Press

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