Amazon Allegations Highlight Three Corruption Risks
Amazon is reportedly investigating a whistleblower complaint that alleges the retail giant’s funds were funneled into bribes by local counsel in India, according to the Morning Consult, which quoted anonymous sources. Amazon did not confirm the specific allegations but told Business Insider
that the company has “zero tolerance for corruption. We take allegations of improper actions seriously, investigate them fully, and take appropriate action.”
The claims raise a host of hot-button issues in corruption for compliance officers to be wary of, including the growth of the SEC’s whistleblower program and the rising awards. We have insight
from the former chief of the SEC’s Office of the Whistleblower about how firms can use internal reporting to mitigate whistleblower risk and the critical anti-retaliation protections afforded to whistleblowers. The E.U. Whistleblower Directive has further increased risk for companies operating in Europe, as Kvamme Associates in Norway explain in a guest article.
The Amazon rumors also highlight that local counsel can be intermediaries for a bribe, as we describe in our coverage of the Walmart case, where a former attorney for Walmart’s Mexican subsidiary reported to a current Walmart counsel that the subsidiary frequently employed Mexican law firms who bribed officials to obtain approvals for store projects. Local counsel are crucial for overseas endeavors, and we have a guide to identifying and working with them, including diligence steps to mitigate risk.
Finally, the allegations underscore the corruption risk in India. We have addressed local corruption laws in India, as well as FCPA enforcement actions involving India, such as Beam Suntory. Foley & Lardner and Panag & Babu wrote a checklist
to help manage a dawn raid in India – a tool we hope you will not need, but, of course, it is always best to be prepared.
As anti-corruption enforcement begins to pick up in the fourth quarter, let us know about how you are handling the corruption risks that are top of mind.