SocGen advances anticorruption compliance as US bribery case winds down

15 May 2018 4:27pm
FCPA Desk Sign

8 May 2018. By Robert Thomason.

Although Société Générale has yet to settle its pending US Foreign Corrupt Practices Act case, the French international banking group has already instituted two anticorruption compliance measures this year: a reorganized compliance division and a new anticorruption code.

The new antibribery measures, part of a larger compliance program, come as Société Générale also faces a French investigation of bribery in Libya after settling a lawsuit brought by the Libyans.

But the US case may soon be over. Société Générale said in a US Securities and Exchange Commission filing last week that it expects to resolve the FCPA issue and an interest-rigging matter "within the coming days or weeks."

The US Justice Department has been investigating Société Générale over allegations that it bribed officials of the Libyan Investment Authority to influence them to buy securities that subsequently crashed in value. The LIA later sued Société Générale in the UK over the investments, and one year ago, the French bank agreed to pay 963 million euros ($1.1 billion) to settle that case.

Société Générale is also facing a US investigation into allegations of London Interbank Offered Rate rigging.

The bank, in disclosures about possible resolution of the regulatory matters, has combined possible penalties when describing a provision it has made for them. "Within this provision, approximately 1 [billion] in euro equivalent ($1.196 billion) is allocated to the IBOR and Libyan matters," Société Générale said in March.

Compliance moves

Société Générale declined to comment beyond published documentation on its compliance efforts or on the pending resolution of the FCPA matter.

If and when a US resolution comes, the compliance measures may make a difference in any penalty imposed. In its deferred prosecution agreements and plea deals, the DOJ often cites a company's compliance and remediation as a reason to reduce a penalty. A judge would make the final decision.

Regardless, the compliance program that Société Générale has put in place outlines the chain of command among top executives responsible for anticorruption efforts and spells out in writing an anticorruption code that is specific about its instructions to bank employees.

"The Compliance Division was reorganised on 1 January, 2018 and directly reports to the Group’s General Management, thus becoming an independent division in its own right headed by Edouard-Malo Henry, member of the Group’s Management Committee," Société Générale said. "To meet the growing challenges in this area, over the last 3 years Société Générale has doubled the workforce devoted to this activity and significantly increased the training budgets."

Henry had moved to head Société Générale's compliance group in June 2017, after spending five years leading the bank's human resources division. He previously served leadership stints in auditing groups of the bank.

In March, the bank published its "Code Governing the Fight Against Corruption and Influence Peddling".

The company policy outlines its procedures and approaches to eight "main types" of corruption. In addition to a basic prohibition against paying a bribe, which tops its list, Société Générale provides guidance on third-party intermediaries, social payments such as charitable contributions and facilitation payments.

For each of these types of corruption, the code poses three scenarios under the headings "The Right Approach to Take," "When to Exercise Caution" and "What to Refuse."

For example, when using a third party, a right approach would be to consult with a manager if any doubt arises about the propriety of an action of a third party and to not conclude any transaction until that doubt is removed. The code advises Société Générale employees to refuse to pay a third party if, without satisfactory explanation, remuneration is requested that doesn't correspond to usual standards or if they are asked to deposit the money in a different country, especially if that country has a high-money laundering risk.

Société Générale has also taken its anticorruption work into account when reporting on its broader corporate responsibility obligations. In a statement last week on its compliance with the UK Modern Slavery Act, the bank cited its antibribery code as part of its compliance with the anti-slavery statute.

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