World News

Italy hit by new public contracts corruption scandal

Ercole Incalza (photo: lastampa.it9

Italian police arrested four people and placed 51 under investigation on Monday, March 16,  in a probe into corrupt management of contracts for public works including a stretch of a multi-billion euro high-speed train line.

Police in Florence imprisoned two people and placed two under house arrest in the latest probe into the kind of widespread graft which Italy has long struggled to root out of business and politics.

The contracts in question are worth a total 25 billion euros ($26.33 billion), senior special operations policeman Mario Parente said at a news conference.

One of those arrested was named as Ercole Incalza, who until late last year held a senior position in the public works department of the Transport and Infrastructure Ministry.

The investigation started with a probe into contracts to build part of the high-speed TAV rail line near Florence and unearthed a much broader web of wrongdoing, said chief prosecutor Giuseppe Creazzo.

"We believe there is strong evidence of guilt," he said.

Endemic corruption continues to blight Italian business and politics despite Prime Minister Matteo Renzi's pledges to tackle the problem. Italy ranked 69th in Transparency International's 2014 Corruption Perceptions Index, joint last in the European Union with Bulgaria, Greece and Romania.

The latest arrests follow three major corruption scandals in 2014 engulfing high level businessmen and politicians involved in Venice's flood barriers, Milan's Expo world fair, and public contracts in Rome.

Daily Mail            March 16, 2015

Hungary : GRECO Report on compliance with anti-corruption standards

Hungary : Report on compliance with anti-corruption standardsA new report reveals that Hungary’s authorities have failed to comply fully with most of the anti-corruption improvements suggested by Council of Europe experts.

Group of States Against Corruption (GRECO) Third Round Compliance Report on Hungary, concludes that the country has “implemented satisfactorily, or dealt with in a satisfactory manner, in total, six of the fifteen recommendations.

The report notes that “of the remaining recommendations, four have been partly implemented and five have not been implemented.

GRECO wants the country’s authorities “to conclude the ratification process in respect of the Additional Protocol to the Criminal Law Convention on Corruption as soon as possible.”

The experts also confirm that “in so far as transparency of party funding is concerned, the situation remains to a large extent thesame as at the time of the adoption of the Compliance Report. In addition to the steps taken to provide for more transparency as regards the registries of political parties, acknowledged in the compliance report, only minor progress has been made in respect of the pending recommendations.

“This is particularly disappointing as some parts of the Party Act and the Election Procedure Act have been amended.”

The clarification of sources of party income and greater precision regarding the election campaign periods are welcomed by GRECO.

But, it states that “further efforts are needed, for example, in order to establish transparent accounting of political parties and to ensure independent auditing and efficient monitoring of party accounts, as required in the pending recommendations.

Read the full GRECO report here.

Human Rights Europe            March 13, 2015

Commerzbank to pay $1.45bn for US banking violations

Commerzbank to pay $1.45bn for US banking violations

Germany's second-largest bank, Commerzbank, has agreed to pay a total of $1.45bn (£980m) to US authorities for violating economic sanctions against businesses in Iran and Sudan.

The penalty also includes charges relating to money laundering carried out on behalf of Japanese firm Olympus.

Regulators said Commerzbank had "turned a blind eye" to illegal practices.

The bank's chief executive, Martin Blessing, said his firm took the violations "very seriously".

He added that Commerzbank would make "changes to our systems, training and personnel to address the deficiencies identified by US and New York authorities".
'Broader problem'

In a statement announcing the penalty, Benjamin M. Lawsky, the superintendent of New York's Department of Financial Services (DFS), highlighted that Commerzbank employees had "sought to alter the Bank's transaction monitoring system so that it would create fewer 'red flag' alerts about potential misconduct".

This, Mr Lawsky said, "highlights a potential broader problem in the banking industry".

The DFS also ordered Commerzbank to fire four employees involved in the violations.

Another release related to the penalties, issued by the US Attorney for the southern district of New York and the FBI, details the steps taken by Commerzbank employees to avoid detection by their colleagues.

One back-office staff member emailed: "If for whatever reason CB [Commerzbank] New York inquires why our turnover has increase[d] so dramatically, under no circumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!"

Commerzbank is the latest in a long list of banks to have been charged for falling foul of US sanctions.

In 2014, French bank BNP Paribas agreed to an $8.9bn (£5.99bn) penalty, while Standard Chartered has been charged twice in three years.

HSBC, ING and Credit Suisse are also among the offenders.

BBC News          March 12, 2015

Corruption under the microscope at G20 conference

Corruption under the microscope at G20 conference (photo: G20)

Corruption ultimately causes companies to lose their competitiveness and efficiency, according to Business-20 (B20) Turkey Chairman Rifat Hisarcıklıoğlu.

Speaking at the annual High-Level Conference on Anti-Corruption in Istanbul on March 6th, Mr Rifat Hisarcıklıoğlu said bribery is not profitable for businesses in the long run.

Mr Hisarcıklıoğlu was one of the keynote speakers at the event jointly organised by Turkey’s G20 Presidency and the Organisation of Economic Co-Operation and Development (OECD).

With Turkey’s G20 Presidency being guided by the principles of inclusiveness, implementation and investment, the fight against corruption is vital for ensuring all businesses, from SMEs to MNEs, can operate on a level playing field as they play their part in increasing global growth and investment.

Representatives from business, civil society and public institutions came together at the conference for discussions based around the theme “Placing Integrity at the Heart of Business Culture”.   

Panellists and speakers included Turkey’s G20 Sherpa Ayşe Sinirlioğlu, Koç Holding CEO Osman Turgay Durak, Sabanci Holding CEO Zafer Kurtul, Turkish Airlines CEO Temel Kotil, OECD Chief of Staff Gabriela Ramos and Turkey’s B20 Chairman Sarp Kalkan. The resultant dialogue will assist in the implementation of the 2015-2016 G20 Anti-Corruption Action Plan.

According to this plan adopted in Australia last year, corruption destroys public trust, undermines the rule of law, skews competition, impedes cross-border investment and trade, and distorts resource allocation. As a group of the world’s largest economies, the G20 remains committed to reducing the incidence of corruption and building a global culture of intolerance towards corruption.

“Global solutions for global problems can only come through the G20,” said Mr Hisarcıklıoğlu.

The 2015-2016 action plan notes that the annual cost of bribery alone is estimated by the World Bank to be USD$1 trillion, with the burden falling disproportionately on the billion people living in extreme poverty.

Helping to alleviate the burden of corruption on developing economies is in line with the global dimensions of the Turkish G20 Presidency’s principle of inclusiveness. Turkey’s political leaders have repeatedly vowed to consider and involve developing countries more in G20 discussions and decisions.

“We cannot make distinctions between G20 countries and non-G20 countries as we know the decisions made by the G20 will have an impact on everyone,” said Mr Hisarcıklıoğlu.

The B20, which represents the business communities of member states, has its own anti-corruption task force which will formulate recommendations to be tabled to the G20.

The International Chamber of Commerce (ICC) timed the release of the Turkish translation of its Rules on Combating Corruption to coincide with the high-level conference on March 6th.

"The fight against corruption is central to Turkey's G20 Presidency agenda of 'inclusiveness, implementation and investment'. Our view is that all businesses – from the smallest to the largest – have a part to play in combating a problem that currently costs the global economy up to US$2 trillion each year. The ICC Rules are an essential tool to promote sound business practices the world over," said ICC Secretary General John Danilovich.

The World Folio          March 11, 2015

EU Parliament calls in fraud squad over National Front suspicions

EU Parliament calls in fraud squad over National Front suspicions (photo: AFP)

The European Parliament announced Monday, Mar. 9  that it had alerted anti-fraud investigators to possible financial irregularities committed by France's far-right National Front (FN) party over salaries paid to EU parliamentary assistants.

In a statement the Parliament said its president Martin Schulz had informed the European Anti-Fraud Office (OLAF) of the suspected fraud, which a parliamentary source said totalled 7.5 million euros ($8.1 million), confirming figures given by French daily newspaper Le Monde.

Schulz has also written to French Justice Minister Christiane Taubira to express his suspicions.

The statement stressed that assistants receiving wages from the European Parliament must work "directly" for Parliamentary MEPs.

"It is not for Parliament to draw conclusions, it is the OLAF to decide in its capacity as the EU anti-fraud agency," stated European Parliament spokesman Jaume Duch.

National Front head Marine Le Pen announced on Twitter her intent to file a complaint over the "false accusation".

"Basically, Schulz is right... our assistants do not work for the European Union but against it," FN vice president Florian Philippot tweeted, underlining his party's political stance, while adding that the case was "bogus".

OLAF must now decide whether or not to open an investigation, a process which could take several months.

French Prime Minister Manuel Valls warned Sunday that the FN could win the next presidential election in 2017, saying their policies were a "disaster" for the country.

Polls showed that the FN could win an "unprecedented" score in forthcoming local elections on March 22 and 29, Valls said.

EUbusiness            March 10, 2015

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