This month’s top stories
- US subsidiaries of TD Bank Group plead guilty to money laundering and violating the US Banking Secrecy Act and agree to pay USD 1.8 billion in penalties;
- Subsidiary of US multinational aerospace and defence conglomerate RTX Corporation agrees to pay USD 950 million to settle bribery and fraud investigations relating to operations in Qatar; and
- Executive at state-owned Italian IT company Sogei arrested for corruption amid wider investigation into public procurement involving three ministries, 14 companies, and 18 individuals.
Middle east and North Africa
US / Qatar: US defence contractor agrees to pay USD 950 million to settle bribery and fraud investigations relating to operations in Qatar
On 16 October, Raytheon Company, a subsidiary of the US multinational aerospace and defence conglomerate RTX Corporation, agreed to pay over USD 950 million to settle investigations by the US Justice Department into fraudulent activities and violations of the US Foreign Corrupt Practices and Arms Export Control Acts in relation to the company’s operations in Qatar. Raytheon entered into deferred prosecution agreements (DPA) in separate cases in federal courts in the Eastern District of New York and Massachusetts. Raytheon was charged with conspiracy to bribe a Qatari government official in the Qatar Emiri Air Force, the air arm of the Qatari armed forces, to obtain lucrative contracts, and with wilfully failing to disclose the bribes in export licensing applications with the State Department – a requirement under US regulations. Raytheon additionally admitted to two counts of major fraud against the US Department of Defense in relation to the provision of defence services and equipment. Both DPA agreements require Raytheon to hire independent monitors to oversee compliance with anti-corruption and anti-fraud laws and to show good conduct for three years.
Former Soviet Union
Russia/Belarus: Unilever confirms sale of Russian and Belarusian business
On 10 October, publicly-listed consumer goods multinational Unilever confirmed the sale of its Russian and Belarusian business to Arnest Group, a Russia-headquartered household, perfume and cosmetic products manufacturer. The deal is estimated to be worth at least EUR 500 million and is subject to approval by the Russian authorities. Pro-Ukraine campaigners have called for Unilever to donate the proceeds of its sale to aid Ukraine’s reconstruction, and plan to increase pressure on Western multinationals that remain in Russia, such as Nestle, Mondelez, and PepsiCo. Western companies’ exits from Russia have been slowed down by the difficulty of finding non-sanctioned buyers, Russia’s minimum 50-percent discount on Russian assets sold by companies from “unfriendly” countries, and the country’s minimum exit tax of 15 percent. In May 2024, French food products multinational Danone sold its Russian business at a reported loss of EUR 1.2 billion. Arnest Group has seen its income double in the last year, partially fuelled by its acquisition of Heineken’s assets in Russia for a nominal EUR 1 in August 2023.
Russia: UK OFSI has opened investigations into evasion of price cap on Russian oil by 52 UK-linked companies
On 11 October, a new Freedom of Information request by the BBCa UK broadcaster revealed that the UK’s Office of Financial Sanctions Implementation (OFSI) had opened investigations into oil price cap evasion by 52 UK-linked companies since December 2022. As at August 2024, 15 investigations had been closed and 37 remained open. OFSI has not announced any prosecution or fines on the basis of these investigations. The price cap of USD 60 per barrel on Russian crude oil, imposed by G7 and EU member countries in December 2022, ensures the commodity’s continued export while curtailing Russia’s profits. British businesses are prohibited from enabling the transport of Russian oil which has been sold above this price cap. Despite exports of Russian oil and refined products falling by almost USD 50 billion between the cap’s imposition and February 2024, think tanks continue to seek more effective methods of enforcement to further restrict Russia’s ability to benefit from circumvention, including by cracking down on its growing shadow fleet of tankers.
Russia: Volume of Russian-origin oil transported by ‘shadow fleet’ nearly doubled between June 2023 and June 2024
On 14 October, the Kyiv School of Economics released a new report in which it identified that, between June 2023 and June 2024, the volume of Russian-origin oil being transported by Russia’s so-called shadow fleet of oil tankers had almost doubled to 4.1 million barrels a day. Oil transported by the shadow fleet accounted for 70 percent of seaborn exports of Russian-origin oil as of June 2024. Vessels in the shadow fleet are often ageing, poorly maintained, and under- or uninsured and have caused oil spills around the world on at least nine occasions since 2021. The report’s authors called for more comprehensive international sanctions on Russian oil.
Europe
Italy: Executive at state-owned IT company arrested for corruption amid wider investigation into public procurement
On 14 October, Paolino Iorio, a general manager at Italian state-owned IT company Sogei Spa, was arrested by the Guardia di Finanza on charges of corruption. Iorio is accused of having received tens of thousands of euros since November 2023 to facilitate the award of state contracts worth over EUR 100 million to one company. He has claimed that the payments were remuneration for consultancy services and denied having accepted bribes. Iorio’s arrest was part of a wider investigation into public procurement involving Sogei and three Italian ministries. The wider investigation targets 17 other individuals and 14 companies accused of extensive bid-rigging and corruption, including the Italian representative of Elon Musk.
Albania: Former president and leader of current opposition party arrested on charges of corruption and money-laundering
On 21 October, the former President of Albania, Ilir Meta (2017-2022), was arrested by order of Albania’s Special Anti-Corruption Structure (SPAK) on charges of corruption, money-laundering, and non-declaration and concealment of wealth. Meta is additionally accused of accepting a luxury villa as a bribe from a high-profile Albanian businessman in 2014, in exchange for assisting with amendments to mining regulations. Meta remains the leader of Albania’s opposition party, the Freedom Party; a party spokesperson criticised his arrest as being politically motivated.
Americas
Colombia: Investigation launched into allegations of financial misconduct by presidential campaign of Gustavo Petro
On 8 October, the National Electoral Council of Colombia began investigating allegations of financial misconduct made against the 2022 presidential campaign of Columbian president Gustavo Petro. Petro’s presidential campaign is accused of exceeding financial limits by about USD 1.2 million, failing to disclose 12 financial transactions, and accepting funds from illegal sources. The investigation could result in fines against some of Petro’s campaign staffers but will reportedly not immediately lead to Petro being impeached. Petro denied the allegations, accused the investigation of being driven by his political adversaries, and described it as an attempted coup d’état.
US: US branch of TD Bank Group pleads guilty to money laundering and violating the US Banking Secrecy Act
On 10 October, TD Bank NA, the US branch of Canada-headquartered TD Bank Group, and its parent company TD Bank US Holding Company agreed to pay USD 1.8 billion to settle charges that they violated the US Bank Secrecy Act (BSA) and committed money laundering between 2014 and 2023. The two companies pleaded guilty to conspiring to fail to maintain an anti-money laundering program that complies with the BSA. Additionally, they admitted to laundering funds and failing to file accurate regulatory disclosures on currency transactions over USD 10,000. They agreed to forfeit USD 452 million and pay a criminal fine of USD 1.4 billion, for a total financial penalty of USD 1.8 billion. TD Bank Group’s CEO Bharat Masrani released a press statement stating that he took “full responsibility” for the money laundering committed by TD Bank NA and its parent company.
Peru: Former president sentenced to over 20 years in prison for accepting bribes from Odebrecht SA
On 21 October, Peru’s superior court sentenced former Peruvian president Alejandro Toledo to 20 years and six months in prison for accepting USD 35 million in bribes from Odebrecht SA, the Brazilian construction firm. The Peruvian prosecutor’s office alleged that in return for the bribes, Toledo granted Odebrecht building permission for sections 2 and 3 of Peru’s Southern Interoceanic Highway between 2004 and 2005. The highway was estimated to cost USD 507 million but cost the Peruvian state USD 1.25 billion in the end. Toledo was arrested in the United States in 2019 and extradited to Peru in 2022. He has denied the accusations and asked the court to reconsider his sentencing, claiming he has cancer and heart problems and is of advanced age.
Sub-saharan Africa
Nigeria: Anti-corruption body drops money laundering charges against Binance executive
On 23 October 2024, the Economic and Financial Crimes Commission (EFCC), Nigeria's anti-corruption body, withdrew money laundering charges against Tigran Gambaryan, the head of the financial crime compliance unit of global cryptocurrency exchange Binance. The EFCC cited Gambaryan's ill health – which had reportedly deteriorated during his seven-month detention in Abuja and which required him to receive medical treatment outside of Nigeria – as the reason behind the EFCC dropping the charges. However, according to The Financial Times, the decision was reportedly made following lengthy diplomatic exchanges between US and Nigerian officials. These reportedly included top government officials such as US secretary of state, Antony Blinken (2021-present), and Nigeria’s president, Bola Ahmed Tinubu (May 2023-present). The tax evasion charges filed against Binance by the Federal Inland Revenue Service (FIRS), Nigeria’s tax authority, remain active. Binance denies the FIRS charges and maintains its innocence.
