Las Vegas | Atlanta | Miami | Pittsburgh | Newark | Boca Raton | Wilmington | Cherry Hill | Princeton | Lake Tahoe | Ho Chi Minh City | Duane Morris LLP – A Delaware limited liability partnership
Atlanta | Miami | Pittsburgh | Newark | Oman | Boca Raton | Wilmington | Cherry Hill | Myanmar | Lake Tahoe | Ho Chi Minh City | Duane Morris LLP – A Delaware limited liability partnership
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High risks for company and
individual employees
Loss of reputation
Damage claims against
company
Fines for employees
Criminal sanctions for employees
Damage claims against employees
Corruption register / blacklisting
High fines for company
Why is compliance important ?
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Compliance Issues
3
• Competition • Employment • Anti-Corruption/Bribery • Anti-Money Laundering • Seal Management • Record Retention • Insider Trading
• The company has a compliance manual • The company acts immediately • The company has a records retention policy • The company contacts competent counsel • The company notifies authorities, if necessary
8
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Flow
9
Allegation
(Email etc.)
Possibly True
Seek Legal Counsel
Inform Authorities
Gather Evidence
Documents
incl. ESI
Witnesses “Litigation
Hold”
Clearly false allegation
Find the Author
Disciplinary Action?
Pursue Litigation?
Veracity
at the beginning…
Presenter
Presentation Notes
ESI = Electronically Stored Information (emails, spreadsheets, word documents, etc.) “Litigation Hold” – Notice to all possibly involved employees and parties to retain records and not alter or delete them.
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and then…
10
Allegation
(Email etc.)
Possibly True
Seek Legal Counsel
Inform Authorities
Gather Evidence
Documents
incl. ESI
Witnesses “Litigation
Hold”
Clearly false allegation
Find the Author
Disciplinary Action
Pursue Litigation
Veracity
Internal
investigation
Review
procedures Find
witnesses
Maintain
witnesses Witnesses
Statute of
limitations
Special
employees
Internal
Trade Union
Female
employees
Manager of
Trade Union
District Labor
Federation
Lawsuit
petition
Lawsuit
fees
Restrict access
to database
Consider the
disgruntled
Investigate
data
Retain a risk
consultant
External
investigation
Support
authorities
In-house
counsel
External
counsel
Hold meeting
of key leaders
Check emails/
Internet history
Servers, network
desktop, media
Third parties
Employees
Non-employees
…
Presenter
Presentation Notes
ESI = Electronically Stored Information (emails, spreadsheets, word documents, etc.) “Litigation Hold” – Notice to all possibly involved employees and parties to retain records and not alter or delete them.
www.duanemorris.com 11
Analyzing the Accusation
Truth
Possibilities
Speculations
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• Author – anonymous? • Access to employee IT systems?
– Trace Internet traffic on the same date • Consider disgruntled employees/ non-
employees/ third parties
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Date: 12:35 pm 2 April 2014 From: 123whistler @yahoo.com
• Antitrust / Competition Law issue • Could this have happened?
– Potential contacts with the competitor? – Suspicious circumstances (price movements)? – Customer complained about high prices and no
choice / notoriously require price cuts
13
I took part in meetings where Mr. Smith agreed to fix prices with our competitor Boringdrill.
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• “The department’s enforcement actions not only help to ensure justice is served, but also deliver a valuable return to the American people”
U.S. Attorney General Eric Holder, 9 January 2014
• US $1.39 billion, EC €1.88 billion in FY 2013
14
Antitrust Fines are Big Business
Source: U.S. Department of Justice, European Commission
Presenter
Presentation Notes
In practice: Penalty for VINAPCO is the biggest one so far: ~ USD 165,000 Under Vietnam Laws: The maximum penalty in Competition field could be ten (10) per cent of the total turnover of the enterprise in breach in the financial year preceding the year in which the breach was committed. If the enterprise in breach is newly established and has not yet operated for a full financial year, "total turnover for the financial year prior to the year in which the breach was committed" as stipulated in this clause means the total turnover of the enterprise as from the date of establishment until the date of issuance of the decision to hold an official investigation.
• Monopoly (economic concentration) – Forming monopolies (mergers) – Abuse of dominant position / exclusionary conduct
• Per se violation / rule of reason
15
Competition Law in a Nutshell
Presenter
Presentation Notes
Article 9. Prohibited agreements in restraint of competition The agreements shall be prohibited: a. Agreements which prevent, impede or do not allow other enterprises to participate in the market or to develop business; b. Agreements which exclude from the market other enterprises which are not parties to the agreement; c. Collusion in order for one or more parties to win a tender for supply of goods and services. 2. The agreements in restraint of competition shall be prohibited when the parties to the agreement have a combined market share of thirty (30) per cent or more of the relevant market. a. Agreements either directly or indirectly fixing the price of goods and services; b. Agreements to share consumer markets or sources of supply of goods and services; c. Agreements to restrain or control the quantity or volume of goods and services produced, purchased or sold; d. Agreements to restrain technical or technological developments or to restrain investment; e. Agreements to impose on other enterprises conditions for signing contracts for the purchase and sale of goods and services or to force other enterprises to accept obligations which are not related in a direct way to the subject matter of the contract; Article 11. Enterprises and groups of enterprises in dominant market position 1. An enterprise shall be deemed to be in a dominant market position if such enterprise has a market share of thirty (30) per cent or more in the relevant market or is capable of substantially restraining competition. 2. A group of enterprises shall be deemed to be in a dominant market position if they act together in order to restrain competition and fall into one of the following categories: (a) Two enterprises have a market share of fifty (50) per cent or more in the relevant market; (b) Three enterprises have a market share of sixty five (65) per cent or more in the relevant market; (c) Four enterprises have a market share of seventy five (75) per cent or more in the relevant market. Article 13. Practices constituting abuse of dominant market position which are prohibited Any enterprise or group of enterprises in a dominant market position shall be prohibited from carrying out the following practices: 1. Selling goods or providing services below total prime cost of the goods aimed at excluding competitors; 2. Fixing an unreasonable selling or purchasing price or fixing a minimum re-selling price goods or services, thereby causing loss to customers; 3. Restraining production or distribution of goods or services, limiting the market, or impeding technical or technological development, thereby causing loss to customers; 4. Applying different commercial conditions to the same transactions aimed at creating inequality in competition; 5. Imposing conditions on other enterprises signing contracts for the purchase and sale of goods and services or forcing other enterprises to agree to obligations which are not related in a direct way to the subject matter of the contract; 6. Preventing market participation by new competitors.
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• Coercion, defamation, disruption, misleading advertisement, multi-level marketing, etc.
Unfair Business Practices
• Economic concentration • Abuse of dominant market
position • Agreement in restraint of
competition
Anti-Competitive
Conduct
Vietnam Competition Law
Presenter
Presentation Notes
Unfair business practices are prohibited: - Misleading instructions; Infringing business secrets; Coercion in business; Disruption of competitor’s business; Defamation of a business; Advertisement or promotions aimed at unfair Competitions Discrimination by industry associations; and Illegal multi-level marketing
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Case 1: Monopoly abuse of VINAFCO • VINAPCO had abused its monopoly and cut off supplies to Jetstar Pacific Airlines without justification in 2008.
• Fine: more than VND3.3 billion (~USD165,000)
17
Vietnam Competition Cases
Presenter
Presentation Notes
Case 1: VINAPCO vs. JPA Vietnam Competition Authority Annual Report 2010 says that in the market of supplying aviation fuel for commercial aviation in domestic airports, Vinapco possesses monopoly position, which as described in Article 12 of VCL 2004: “An enterprise shall be deemed to be in a monopoly position if there are no enterprises competing in the goods and services in which such enterprise conducts business in the relevant market.” VINAPCO had abused its monopoly and flouted the Competition Law when cutting off supplies to Jetstar Pacific Airlines without justification on April 1, 2008. The government intervened and ordered Vinapco to resume supplying fuel to JPA. The state-owned airplane petrol supplier was also fined more than VND3.3 billion ($165,000) for violating the nation’s Competition Law.
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Case 2: Price-fixing in Insurance Sector • In 2008, 15 insurance companies reached a cooperative
agreement on the level of motor vehicle insurance premiums. Then 4 more insurance companies subsequently became involved in this price-fixing agreement. These 19 companies account for 99.79% of the national motor vehicle insurance market.
• Fine: 0.025% of their total turnover in 2007 (the year preceding the year in which the price-fixing agreement was implemented). (VND 1,700,000,000 ~USD89,000)
• Administrative fees of VND 100,000,000 (~USD4,800) were charged also.
18
Vietnam Competition Cases
Presenter
Presentation Notes
List of 19 involved insurance companies: 1. Agribank Insurance Company (“IC”) 2. Bao Long 3. Bao Minh 4. Vietinbank 5. Bao Tin 6. Bao Viet 7. BIDV 8. Military 9. Petrolimex 10. Postal 11. PJICO 12. Samsung Vina 13. Golbal 14. VienDong Assurance Corporation 15. Tokio Marine 16. AAA 17. Fubon Vietnam 18. GrouPama Vietnam 19. VNI
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TIPS
DOs • Remain calm and polite; • Be co-operative; • Take notes; • Refer to lawyer; • Refer to Senior
Management; • Refuse legally privileged
documents (i.e certain communications with lawyers).
DON’Ts • Answer question without
authorization from Lawyers/Senior Management;
• Answer general questions (i.e. those are unrelated to a specific document);
Conduct Give, offer, promise Give, offer, receive, failure to prevent
Give, offer, receive
Targets Foreign officials Any person State officials
Fines Twice the loss or twice the gain and disgorgement*
Unlimited Max. 5 times of the bribery amount
Prison Terms
Max. 5 years Max. 10 years Death penalty (for the receiver); Life sentence
22
Presenter
Presentation Notes
“Failure to Prevent Bribery” “Adequate Procedures” defense for failure to prevent bribery i.e. risk assessment; top level commitment; due diligence; code of conduct; helpline; policies; training and guidance etc A few sections from the UK Bribery Act (http://www.legislation.gov.uk/ukpga/2010/23/contents): Section 1 - very broad - "another person": Offences of bribing another person (1)A person (“P”) is guilty of an offence if either of the following cases applies. (2)Case 1 is where— (a)P offers, promises or gives a financial or other advantage to another person, and (b)P intends the advantage— (i)to induce a person to perform improperly a relevant function or activity, or (ii)to reward a person for the improper performance of such a function or activity. (3)Case 2 is where— (a)P offers, promises or gives a financial or other advantage to another person, and (b)P knows or believes that the acceptance of the advantage would itself constitute the improper performance of a relevant function or activity. (4)In case 1 it does not matter whether the person to whom the advantage is offered, promised or given is the same person as the person who is to perform, or has performed, the function or activity concerned. (5)In cases 1 and 2 it does not matter whether the advantage is offered, promised or given by P directly or through a third party. Section 2 relates to being bribed (accepting a bribe) Section 3 - very broad Function or activity to which bribe relates (1)For the purposes of this Act a function or activity is a relevant function or activity if— (a)it falls within subsection (2), and (b)meets one or more of conditions A to C. (2)The following functions and activities fall within this subsection— (a)any function of a public nature, (b)any activity connected with a business, (c)any activity performed in the course of a person's employment, (d)any activity performed by or on behalf of a body of persons (whether corporate or unincorporate). (3)Condition A is that a person performing the function or activity is expected to perform it in good faith. (4)Condition B is that a person performing the function or activity is expected to perform it impartially. (5)Condition C is that a person performing the function or activity is in a position of trust by virtue of performing it. (6)A function or activity is a relevant function or activity even if it— (a)has no connection with the United Kingdom, and (b)is performed in a country or territory outside the United Kingdom. (7)In this section “business” includes trade or profession. Section 12 - Not as broad as FCPA. Offences under this Act: territorial application (1)An offence is committed under section 1, 2 or 6 in England and Wales, Scotland or Northern Ireland if any act or omission which forms part of the offence takes place in that part of the United Kingdom. (2)Subsection (3) applies if— (a)no act or omission which forms part of an offence under section 1, 2 or 6 takes place in the United Kingdom, (b)a person's acts or omissions done or made outside the United Kingdom would form part of such an offence if done or made in the United Kingdom, and (c)that person has a close connection with the United Kingdom. (3)In such a case— (a)the acts or omissions form part of the offence referred to in subsection (2)(a), and (b)proceedings for the offence may be taken at any place in the United Kingdom. (4)For the purposes of subsection (2)(c) a person has a close connection with the United Kingdom if, and only if, the person was one of the following at the time the acts or omissions concerned were done or made— (a)a British citizen, (b)a British overseas territories citizen, (c)a British National (Overseas), (d)a British Overseas citizen, (e)a person who under the British Nationality Act 1981 was a British subject, (f)a British protected person within the meaning of that Act, (g)an individual ordinarily resident in the United Kingdom, (h)a body incorporated under the law of any part of the United Kingdom, (i)a Scottish partnership. (5)An offence is committed under section 7 irrespective of whether the acts or omissions which form part of the offence take place in the United Kingdom or elsewhere. (6)Where no act or omission which forms part of an offence under section 7 takes place in the United Kingdom, proceedings for the offence may be taken at any place in the United Kingdom. (7)Subsection (8) applies if, by virtue of this section, proceedings for an offence are to be taken in Scotland against a person. (8)Such proceedings may be taken— (a)in any sheriff court district in which the person is apprehended or in custody, or (b)in such sheriff court district as the Lord Advocate may determine. (9)In subsection (8) “sheriff court district” is to be read in accordance with section 307(1) of the Criminal Procedure (Scotland) Act 1995.
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Top 10 FCPA Settlements
No. Company Total Resolution Year 1 Siemens AG $800 million 2008 2 KBR/Halliburton $579 million 2009 3 BAE Systems $400 million 2010 4 Total, S.A. $398 million 2013 5 Snamprogetti/ENI $365 million 2010 6 Technip S.A. $338 million 2010 7 JGC Corp. $219 million 2011 8 Daimler AG $185 million 2010 9 Weatherford $153 million 2013 10 Alcatel-Lucent $137 million 2010
23 Source: U.S. Department of Justice
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• FCPA has BROAD jurisdictional reach
• Any contact with U.S. establishes jurisdiction to prosecute FCPA violation – Use of U.S. mail, telephone, or wire systems
Includes fax or email sent from foreign country to U.S. – Use of U.S. banking network
2 recent examples: Siemens AG and Halliburton/KBR – Foreign entity with stock trading on U.S. stock exchange
Includes foreign companies with American Depository Receipts (ADRs) – Foreign citizen acting as:
Agent of U.S. entity Agent of foreign company that lists stock on U.S. stock exchange
24
Why should we care about FCPA?
www.duanemorris.com 25 Source: US DOJ
Countries Implicated Most Frequently In Corporate FCPA Enforcement Actions
2009-2013 (July) 19
14
8 7 7
5 5 5 5 4 4 4 4 4 4 4
3 3 3 3 3 3 3 3 3
Chi
na
Nig
eria
Ira
q In
done
sia
Mex
ico
Gre
ece
Kar
akhs
tan
Pol
and
Thai
land
A
rgen
tina
Bra
zil
Egy
pt
Indi
a R
ussi
a S
audi
Ara
bia
Viet
nam
A
ngol
a B
ulga
ria
Cro
atia
M
aced
onia
M
alay
sia
Pan
ama
Ser
bia
Sou
th K
orea
U
.A.E
Presenter
Presentation Notes
Case 1: United States v. Nexus Technologies, Inc., Nam Quoc Nguyen, Joseph T. Lukas, Kim Anh Nguyen and An Quoc Nguyen (E.D. Pa. 2008) Nature of the Business. Sale of third-party underwater mapping and bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts, and air tracking systems to Vietnamese government agencies. Business Location. Vietnam. Payment. (i) Amount of the value. At least $150,000. (ii) Amount of business related to the payment. At least $500,000. (iii) Intermediary. An unnamed company located in Hong Kong. (iv) The foreign official. Officials from multiple Vietnamese government agencies, including Vietnam’s Ministries of Transport, Industry, and Public Safety. Case 2: SEC v. Aon Corporation (D.D.C 2011) Nature of the Business. Aon is a Delaware corporation that provides risk management services, insurance, and reinsurance brokerage worldwide. Business Location. Bangladesh, Costa Rica, Egypt, Indonesia, Myanmar, United Arab Emirates, Vietnam. Payment. (i) Amount of the value. 3,600,000. (ii) Amount of business related to the payment. 11,416,814 in profits. (iii) Intermediary. A tourism company associated with a Costa Rican government official; the son of a high-ranking government official in Bangladesh; third-party facilitators. (iv) The foreign official. Officials at a government-owned reinsurance company in Costa Rica; officials at the Egyptian Armament Authority, an Egyptian government-owned company, and its U.S. arm, the Egyptian Procurement Office; unidentified individuals associated with Vietnam Airlines; unidentified Indonesian government officials; a senior manager at Myanmar Insurance, a government-owned entity; the son of a high-ranking government official in Bangladesh. Case 3: SEC v. Veraz Networks, Inc. (N.D. Cal. 2010) Nature of the Business. Veraz Networks, Inc. (“Veraz”) is a Delaware corporation based in California which sells telecommunications products that assist telecommunications service providers in transporting and managing data. Business Location. China and Vietnam. Payment. (i) Amount of the value. At least $40,500. (ii) Amount of business related to the payment. At least $233,000. (iii) Intermediary. Reseller and consultant. (iv) The foreign official. Officials at government-controlled telecommunications companies in China and Vietnam. Case 4: SEC v. Daimler AG (D.D.C. 2010) Nature of the Business. Securing numerous contracts with government customers for the purchase of Daimler vehicles. Daimler is a German vehicle manufacturing company with business operations throughout the world. Business Location. 22 countries including China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam and others. Payment. (i) Amount of the value. At least $56 million. (ii) Amount of business related to the payment. $1.9 billion. (iii) Intermediary. Various. (iv) The foreign official. Various officials involved in the purchase of vehicles around the world.
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Case 1: Nexus Technologies, Inc. 2010 Three overseas Vietnamese siblings: Nam Nguyen, An Nguyen and Kim Nguyen -- key managers of Nexus Technologies, Inc. have conducted an act of bribery involving a Vietnam State official in order to obtain big contracts and projects in Vietnam Prison terms: • Nam Nguyen: 16 months + 2 years to be observed • An Nguyen: 9 months + 3 years to observed • Kim Nguyen: 2 years suspended sentence + USD 20,000
26
FCPA Cases involving Vietnam
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Case 2: Veraz Networks, Inc. 2010 Veraz conducted an act of bribery involving a Vietnamese State official (Director of a State Telecommunication Company) and other Chinese officials in order to develop business relationships. Fine: USD 300,000
27
FCPA Cases involving Vietnam
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Case 3: Daimler AG 2010 Daimler – a German car brand conducted bribery acts with State officials from at least 22 countries all over the world, including Vietnam for the purpose of business facilitation. Fine: USD 185,000,000 28
FCPA Cases involving Vietnam
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Case 4: Aon Corporation 2011 AON is a Delaware corporation that provides risk management services, insurance, and reinsurance brokerage worldwide. It is found to have carried out acts of bribery with officials from Bangladesh, Costa Rica, Egypt, Indonesia, Myanmar, United Arab Emirates and Vietnam. Fine: USD 16,260,000 29
FCPA Cases involving Vietnam
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Corruption Perception index 2013
30
Rank Country
1 New Zealand
1 Denmark
3 Finland
3 Sweden
5 Singapore
Rank Country
14 UK
18 Japan
19 US
36 Taiwan
46 South Korea
53 Malaysia
80 China
Rank Country
94 India
102 Thailand
114 Indonesia
116 Vietnam
127 Russia
157 Myanmar
160 Cambodia
Clean More corrupt Not too bad
Source: http://www.transparency.org
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3rd Issue – Labor Code
• Labor Law issue – Who can fire and how? – Identifying information about the author – Does the company have registered Internal Labor
Rules? – New Labor Code and regulations (2013)
31
Mr. Smith also threatened having me fired . . .
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Internal Labor Rules (ILR)
• Cover details on working conditions
• DOLISA registration required for legal effect – Without registered ILR,
disciplinary actions have no “teeth”
– Risk of wrongful termination actions
32
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Trade Unions (TU)
• New Labor Code (2013) requires TU involvement – ILR registration – Disciplinary action
• TU fees – Employer must pay 2% of
all employee’s incomes – TU members (employees)
pay 1% 33
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• Register Internal Labor Rules • Set up the Internal Trade Union • Make a separate civil training agreement • Maintain the records • Be aware of different practice of different
DOLISAs and labor authorities
34
Pieces of advice
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4th Issue – Duty to Report
• Protect the whistleblower from retaliation • VN Penal Code - Non-denunciation of crimes
– “Any person who knows a crime is being prepared, carried out or has been completed but fails to denounce it shall bear penal liability for having failed to denounce it.” Article 22.
• Obligation to report to the authorities 35
. . . if I ever reported this story . . .
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5th Issue – Death Penalty etc.
• VND 2 billion = Death Penalty threshold – But under VN Law only bribes to officials are
covered – UK Bribery Act covers bribes to any person!
36
. . . and offered me 2,000,000,000 dong to keep my mouth shut.
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• Ensure the expenditures are transparent
• Obtain written confirmation that payment of expenses is not contrary to local laws;
• Provide no additional compensation beyond what is necessary to pay for actual expense incurred;
• Accurately record the expenses on behalf of the state officials.
37
Tips of safeguards!
Presenter
Presentation Notes
Ensure the expenditures are transparent, both within the company and to the government; Obtain written confirmation that payment of expenses is not contrary to local laws; Provide no additional compensation, stipends, or spending money beyond what is necessary to pay for actual expense incurred; Ensure that costs and expenses on behalf of the state officials will be accurately recorded in the company’s books and records.
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• Excessive commissions to third-party agents or consultants;
• Unreasonably large discounts to third-party distributors;
• Third-party “consulting agreements” that include only vaguely described services;
• The third-party consultant is in a different line of business than that for which it has been engaged;
• The third party is related to or closely associated with the state officials.
38
Red flags with third parties
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Whistleblowing cases in Vietnam
Case 1: Hoai Duc Hospital, Hanoi • The hospital was denounced to copy the blood test
results of one patient and gave it to many others. • The whistleblower was rewarded. • Violators were prosecuted for crime of abusing positions
and/or powers while performing official duties
39
Presenter
Presentation Notes
Case 1: Hoai Duc Hospital, Hanoi Instead of doing blood tests, staff of Hoai Duc Hospital in Hoai Duc District, Hanoi, copied the blood test results of one patient and gave it to many others. Many people got the same test results, affecting their diagnosis. Ms. Nguyet, an employee of the testing ward of Hoai Duc Hospital denounced this brutal fact to the authorities. In her denunciations, Nguyet said "Because the patients were overcrowded, they used false test results. They made the test for patients, then copied the testing results to give to other patients. As such, many patients have different diseases and are of different ages but they had the same testing results.” After that, a group of people in Hoai Duc hospital are lobbied to sign a denunciation letter against to Ms. Nguyet but they failed to do so. Finally, Ms. Nguyet was rewarded while 10 doctors/staffs of Hoai Duc Hospital were prosecuted for crime of abusing positions and/or powers while performing official duties (Art. 281 Penal Code)
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Whistleblowing cases in Vietnam
Case 2: Lino SJC , Danang • Lino’s clients received an
anonymous letter which spoke against Lino products. They then returned the products.
• Lino entreated support from authorities.
• The whistleblower has not been identified.
40
Presenter
Presentation Notes
Case 2: Lino SJC, Danang Clean Technology Joint Stock Company (Lino SJC) was established in 2001, and became one of the pioneer enterprise in improving human life and environment protection. At the end of 2013, Lino’s clients received anonymous letter which spoke against Lino products – ozone machines. After that, many clients decided to return products they had bought from Lino with the requirement of full refund. Lino’s business as well as its brand and reputation were terribly affected and Lino decided to write the official letter to Provincial Police for entreating support from authorities. Right this second, the investigation for finding the whistleblower is being conducted.
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Lessons from the Whistleblower
1. Compliance Manual 2. Regular Compliance Training
– Defense against “failure to prevent” – Prevention is cheaper than the cure
3. Data retention policy – Emails, documents etc.
4. IT systems policy 5. Internal Labor Rules
41
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What to do?
Recommended corporate compliance policy • Fair competition • Integrity in business dealings • Principle of sustainability • Upholding foreign trade laws • Preserving equal opportunity in securities trading • Proper record-keeping and transparent financial reporting • Fair and respectful working conditions • Intellectual property rights • Conflict of interest • Cooperation with the authorities 42
Presenter
Presentation Notes
Corporate compliance policy Fair competition�To absolutely commit to the principle of fair competition and, in particular, to the strict observance of antitrust law. Integrity in business dealings�Corruption will not be tolerated. Principle of sustainability�Be aware of its responsibility to protect health and the environment and ensure people’s safety. Upholding foreign trade laws�The provisions of all national and international foreign trade laws must be observed. Preserving equal opportunity in securities trading�Every employee is obligated to treat confidentially any internal information that could affect the price of the company’s stock. Proper record-keeping and transparent financial reporting�An internal control system must provide for the proper documentation of key business processes. Controls must be established to ensure that all transaction details relevant for accounting purposes are fully and correctly captured. Fair and respectful working conditions�All employees are expected to behave in a friendly, objective, fair and respectful manner toward colleagues and third parties. Discrimination or harassment of any kind will not be tolerated. Intellectual property rights�Confidential company information must not be disclosed to any third party or made public. Also, employees must treat the intellectual property rights of other entities with the same respect. Conflict of interest�All employees must always keep their personal interests separate from those of the company. Personnel decisions and business relationships with third parties must also be based solely on objective criteria. Cooperation with the authorities�The company endeavors to be cooperative in its dealings with all authorities and government agencies. All information communicated to the authorities must be correct and complete and be provided in an open, timely and understandable manner.
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Typical disciplinary process
• How to suspend someone against whom an allegation is made
• Possible traps for dealing with investigations
• Implications for special targets
43
Presenter
Presentation Notes
How to suspend someone against whom an allegation is made? - Must be specified in the ILRs - The causality with the situation for dismissal under Art 126 Labor Code 2012: Possible traps for dealing with investigation Implication for special targets? - Dismissing shall not be applied to female employee due to her marriage, pregnancy, maternity leave or nursing a child under 12 months - If an employer apply dismissal to an employee who is a part-time trade union officer, the employer must obtain written agreement from the executive committee of the grassroots-level trade union or from the executive committee of the directly superior trade union - When apply dismissal, the employer must follow the principles and sequence for dealing with breach of labor discipline. However, the conciliation procedure shall not be required.
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Transparency to be increased in Vietnam
• Those who conduct corrupt acts shall be publicly handled irrespective of their positions. Arts. 4.2 & 4.5 Law on Anti-corruption 2004
• New requirement on “Transparency of assets and income” under Law on Anti-corruption 2012
44
Presenter
Presentation Notes
New requirement on “Transparency of assets and income” under Law on Anti-corruption 2012: (i) Publication of lists declaring assets (ii) Obligation to explain additional assets (iii) Verification of assets Development: List of relevant laws in Vietnam in the last 10 years: Law on Competition 2004 Law on Anti-corruption (adopted in 2004, amended in 2007 and 2012) Law on Enterprise 2005 Law on Commerce 2005 Law on Intellectual property (adopted in 2005, amended in 2009) Law on Inspection 2010 Law on Record Retention 2011 Law on Denouncement 2011 Law on Anti-money laundering 2012 Constitution 2013
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Record Retention Policy
45
Retention terms • Lifetime of the enterprise: License, certificate, approval, minutes and resolution, shareholders’ profiles…
• Definite term: not exceeding 70 years Invalid documents which include duplicate information and/or documents that are not necessary any more need to be destroyed. However, the destruction of documents must be recorded in minutes and such minutes must be saved by the company for at least 20 years from the date that they are destroyed.
Presenter
Presentation Notes
Vietnam Laws: Law on record retention 2011; Decree No. 01/2013/ND-CP guiding law on record retention. Decree 129/2004/ND-CP detailing and guiding the implementation of a number of articles of the accounting law, applicable to business activities Retention terms: Lifetime of the enterprise Definite term: Depending on the business of the company but not exceeding 70 years. Special documents such as accounting reports/books will be subject to specific legal instruments (Eg -- Decree 129/2004/ND-CP) Recommended record retention policy under Universal Corporation’s manual “You must keep copies of the documents required by this Manual for five years, except in the following situations: the document retention requirements of your company or of local law require retention for a longer period, in which case you must retain the documents for that longer period; local law requires disposal in less than five years, in which case you must retain the documents until the time disposal is so required, and then dispose of the documents and copies as required; or the document is related to due diligence for Sales Agents, Joint Venture Partners or Third Parties, in which case documentation must be kept during the life of the engagement of the Sales Agent, Joint Venture Partner or Third Party plus five years.”
