Forensics & fraud blog

What does the recent US$ 22.2 million settlement of Smith & Nephew means for the Medical Devices industry?

On February 06, 2012, U.K. based medical devices maker Smith & Nephew Plc. agreed to pay $22.2 million to settle Foreign Corrupt Practices Act offenses committed by its U.S. (Smith & Nephew Inc.) and German (Smith & Nephew Orthopaedics GmbH) subsidiaries. [Refer SEC’s Litigation Release 22252 / February 6, 2012 on the following link http://www.sec.gov/litigation/litreleases/2012/lr22252.htm (Accessed on February 9, 2012)]

This is a significant order for more than one reason. The biggest reason is that this order is one in a series of previous prosecutions that has included key players in the medical devices industry. Another reason is that this order highlights why companies that are operating in medical devices segment need to go that extra mile to ensure that the transactions entered into by third parties (agents, distributors etc.) on their behalf adhere to their policies. In this alert, we outline salient points of this case and then outline what companies in this segment can do in future to avoid such actions.

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Interesting publication from the UK Serious Fraud Office providing comments on the impact of anti-fraud and anti-corruption legislation. It provides insights into current international legislation and related implications. Additionally it provides hands-on information regarding the management of forensic investigations and the implementation of preventive measures.

Serious Economic Crime: A boardroom guide to prevention and compliance

UK Bribery Act: the British act against corruption is not something that Belgian business can just ignore.

UK Bribery Act press release PwC

The Bribery Act 2010 received Royal Assent on 8 April 2010 and came into force on 1 July 2011.  In addition to the two offences of active and passive bribery (paying and receiving bribes respectively), two specific offences are covered:

• Bribery of an overseas public official; and
• A corporate offence of ‘failure to prevent’ bribery.

With the Bribery Act the UK has one of the strictest anti-bribery regimes in the world and its reach is even broader than the US Foreign Corrupt Practices Act.

What do you need to do?

As the Bribery Act will have implication for all businesses that are incorporated in the UK and for the businesses that carry on all or part of their business in the UK, it is of utmost importance to have a fully integrated and effective anti-corruption program.

In many ways the introduction of the Bribery Act could require a fundamental reassessment of the risks that a company is running and how those risks are addressed.