News Week in Review, February 24, 2014

A survey shows anti-bribery policies may not be working in Asian-Pacific companies, businesses are again reminded to keep an eye on third party intermediaries in regard to the FCPA, two pharmaceutical companies settle anti-competition charges and West Virginia institutes its own false claims act.

Well, did you set aside any time to indulge in one of the great spectacles in sports over the weekend? We’re not referring to the closing ceremonies of the Olympics, but the 55th running of the Daytona 500…the Super Bowl of racing! While it does seem a little odd to have the big “game” at the beginning of the season, we’ll roll with it anyway. (See what we did there? Roll with it.) Just like in the Olympics, the weather added some stress, but eventually, the race was completed and Dale Earnhart Jr. celebrated his win not by announcing he was going to Disneyworld, but by launching a Twitter account. So with the “Great American Race” as our inspiration, we start our engines on this week’s News in Review.

Sitting in the pole position is an article that raises the question of whether strong anti-corruption policies are actually having an impact on behavior. A recent Ernst & Young survey of employees at Asia-Pacific companies shows that nearly half of those employees believe that corruption is a real problem in their organizations, despite the presence of policies intended to prevent it. Nearly 25% of those surveyed say that the provision of gifts to win business is still commonplace. While 81% of the respondents say they would use an anonymous hotline to report concerns only 32% say their companies had created procedures to do so.

Businesses hoping to avoid the black flag for FCPA violations need to keep tabs on their third party intermediaries and resellers. The 2012 FCPA Resource Guide offered clarity on the question of whether companies are responsible for the actions of third parties. In addition, recent cases have reinforced the notion that the government holds companies responsible for the actions of third parties. One case from 2013 involved a company that used a freight forwarder to avoid paying customs duties and tariffs in Nigeria. In another, a company entered into a Non-Prosecution Agreement after the manager of a foreign subsidiary was found to have paid bribes to customs agents.

PhRMA is not happy with the Federal Trade Commission (FTC) over the transfer of patent rights and the organization is headed to court to do something about it. In November, the FTC made a change to the Hart-Scott-Rondino Act over premerger notification rules that applies only to the pharmaceutical industry. PhRMA filed suit to have the change declared unlawful, saying the costs of compliance with the rule will be significant.

On the settlement front, Ranbaxy and Teva have been assigned a couple of penalty laps for restricting competition. The two companies settled charges with the state of New York over an arrangement that would allow Teva to sell the generic form of Lipitor in the U.S. should Ranbaxy’s generic not be approved. Each company agreed to pay $150,000 as a part of the settlement.

The West Virginia House Judiciary Committee has approved a bill that would create a state version of the False Claims Act. The bill provides for whistleblower awards, and if passed, will give the state a larger percentage of federal settlements.

And so ends this week’s race through the world of the compliance news you need to know. Have a great week everyone and we’ll see you back here next week!


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