ANTI-BRIBERY AND ANTI-

CORRUPTION ORIENTATION
 Why Anti-bribery and Anti-corruption
impact our Work and Company
• Local laws prohibit bribery and corruption
• As an MNCs, Novartis is covered by foreign laws and
treaties against bribery and corruption (e.g. FCPA,
UKBA)
• We hold ourselves to the highest standards of integrity
and adherence with all relevant laws and regulations.
• Avoid potential fines, losses and/or imprisonment
• Maintain stakeholders’ trust
Relevant Foreign Laws

• FCPA or Foreign Corrupt

USA Practices Act 1977
• Sarbanes –Oxley Act

UK • Anti Bribery Act 2010

106. Philippines
 Philippine
Anti-Bribery &
Anti-Corruption Laws

5
 The following local laws penalize bribery and/ or
corruption of public officers

Presidential Decree No. 46:

Making it punishable for public officials and employees to receive, and
for private persons to give gifts on any occasion, including Christmas

Presidential Decree No. 807:

Civil Service Decree of the Philippines

Republic Act No. 6713:

Conduct and Ethical Standards for Public Officials/ Employees

Republic Act No. 3019:

Anti-Graft and Corrupt Practices Act

6
 There may also be rules and regulations issued by
specific government agencies

DOH AO 2007-0043:

Rules on gifts and benefits to DOH officials and

employees.
 Gifts and Hospitality

• Gifts – Novartis does not allow personal gifts

• Entertainment and Leisure Activities (e.g. karaoke,
massages, golf trips) – No entertainment should be paid
for or provided during events

• Meals/Hospitality (e.g. Accommodations, Per diems) –

P1500 meal caps should be observed

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US Foreign Corrupt
Practices Act

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 Foreign Corrupt Practices Act

6 Basic Elements of Bribery:

1. Payment, offer or promise of 5. For the purpose of
-Influencing an official act or
2. Anything of value decision
-Inducing a person to do or
3. To omit to do act in violation of
a. Foreign Official his official duty
b. Third party knowing that such -Securing an improper
person will pass the payment, offer or advantage
promise to a foreign official
6. To assist in obtaining or
4.The corrupt act need not succeed- retaining business
the offer or promise of a payment
can be a violation
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 Extra Territorial Jurisdiction

• The US FCPA has extra-territorial reach

which can extend to US companies or
partnerships operating abroad; overseas
companies or partnerships with a presence in
the US; and US citizens or foreign citizens
ordinarily resident in the US

Penalties and Other Sanctions

• Other Governmental Action
• Criminal
• Private Cause of Action
• Civil

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 Enforcement Trends
Focus on Pharma Industry
Enforcement Trends
2010
Enforcement Trends
2011
Enforcement Trends
 2013 CASES PENALTY
Source: US Securities Exchange & Commission
(http://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml)

Stryker Corporation (Medical technology company) $ 13.2 million to

-bribed doctors and other government officials in 5 countries to settle SEC’s charges
obtain or retain business

Diebold(manufacturer of ATMs and bank security systems) $ 48 million to settle

-bribed officials at gov’t owned banks with pleasure trips to SEC’s charges
popular tourist destinations in order to illicitly win business.

Total S.A.(oil and gas company) $ 398 million to

-paid bribes to intermediates of Iranian government officials, settle SEC’s charges
who ten exercised influence to help the company obtain valuable
contracts to develop oil and gas fields

Parker Drilling Company $ 4 million to settle

-authorized improper payments to a third party intermediary in SEC’s charges
order to entertain Nigerian officials involved in resolving the
company’s customs disputes
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UK Bribery Act 2010

17
 UK Bribery Act

-Prohibits bribes to foreign government officials

-Prohibits commercial bribery, e.g. business-to-business, bribes to

non-government officials
 Extra Territorial Jurisdiction

• The UK Bribery Act has extra-territorial reach which can

extend to UK companies or partnerships operating abroad;
overseas companies or partnerships with a presence in the
UK; and UK citizens or foreign citizens ordinarily resident
in the UK

Penalties and Other Sanctions

• Criminal

• Civil

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 Red Flags

• Trips to conferences to exotic locations without

educational value

• Sham contracts, e.g. consulting/ servicing with no

need

• Gifts

• Not observing imposed meal limits

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 CASES PENALTY
Source: UK Bribery Digest August 2013 edition

1. Yangli (2013) 12 months imprisonment

-A student who attempted to pay bribe in cash for a £ 4,880 fine
passing mark for his dissertation

2. Mawia Mushtaq-engineering firm (2012) 2 months imprisonment

-attempted to bribe a licensing officer to obtain a (suspended for 12 mos) and
private taxi license 2 month curfew from 6pm
to 6am
3.Abbott Group Limited, an oil and gas company £ 5.6 million
not the pharmaceutical company (2012)
-corrupt payments made to win contracts by its
overseas subsidiaries

4. Oxford Publishing Ltd (2012) £ 1,895,435

-irregular tendering practices, breach of procurement
guidelines of World Bank
Differences between FCPA and UKBA

• Bribery of foreign (public) officials

Both the UKBA and the FCPA make it an offence to

bribe foreign (public) officials. Under the UKBA a
“foreign public official” is defined more narrowly than
under the FCPA but still includes (i) anyone who
holds a foreign legislative or judicial position; (ii)
individuals who exercise a public function for a
foreign country, territory, public agency or public
enterprise; or (iii) any official or agent of a public
organisation.
Differences between FCPA and UKBA

• Private-to-private bribery
The FCPA does not cover bribery on a private level,
unlike the UKBA, although such conduct can be
caught under other US legislation.

• Active and passive bribery

The FCPA only covers active bribery, that is to say the
giving of a bribe. In contrast, the UKBA prohibits
both active and passive bribery i.e. the taking of a
bribe.
Differences between FCPA and UKBA

• Failure to prevent bribery

The UKBA creates a strict liability corporate offence

for failure to prevent bribery (as opposed to vicarious
liability) subject to being able to establish that a
company has “adequate procedures”. Under the
FCPA, however, a company subject to US jurisdiction
can be held vicariously liable for acts of its employees
and agents. The UK offence extends to acts of
“associated persons” which means anyone who
performs services for or on behalf of the commercial
organisation.
Differences between FCPA and UKBA

• Intent

Under the FCPA it must be proved that the person

offering the bribe did so with a “corrupt” intent. The
UKBA makes no requirement for a “corrupt” or
“improper” intent in relation to the bribery of a
foreign public official, although the requirement
remains for the general bribery offence.
Differences between FCPA and UKBA
• Facilitation payments

The FCPA creates an exemption for facilitation payments whereas the UKBA
makes no such exception. The UK Ministry of Justice guidance, however,
confirms that prosecutors will exercise discretion in determining whether to
prosecute. In addition, informal guidance received from the SFO indicates
that where it is considering action, it will be guided by the following six
principles:

• Whether the company has a clear and issued policy.

• Whether the company has written guidance available to employees as to the
procedures they must follow where a facilitation payment is requested or expected.
• Whether such procedures are really being followed (monitoring).
• Evidence that gifts are being recorded at the company.
• Proper action, collective or otherwise, to inform the appropriate authorities in
countries when a breach of the policy occurs.
• The company is taking what practical steps it can to curtail such payments.
Differences between FCPA and UKBA

• Penalties

An individual found to have committed an offence under

the UKBA is liable to imprisonment of up to ten years
and/or to an unlimited fine. A company found guilty
is subject to an unlimited fine.
For offences committed under the FCPA an
individual can be fined up to US$250,000 per
violation and may also be given up to five years
imprisonment. A company guilty under the FCPA is
liable for a fine of up to US$2,000,000 per violation.
Novartis Anti-Bribery
Policy

28
 Novartis Global Anti-Bribery (AB) Policy
What is bribery?

It is not just money – bribery has many forms

 Bribery is any gift, favor, or any other benefit given, offered or promised with the
intention of influencing someone’s behavior for commercial advantage

 Even common business practices can constitute bribes in some circumstances

Novartis Global Anti-Bribery (AB) Policy

1 Introduction 2 Principles & Rules 3 Implementation

1.1 Purpose 2.1 Basic Rules 3.1 Training
2.2 Gifts, Hospitality,
Entertainment 3.2 Reporting Misconduct

2.3 Grants and Donations

1.2 Scope and 2.4 Interactions with Public 3.3 Breach of the Policy
Applicability Officials

2.5 Political Contributions

3.4 Exceptions
2.6 Facilitation Payments
2.7 Third Parties
3.5 Entry into Force
2.8 Books and Records
 Novartis Global AB Policy
Know it, use it

1 Introduction What does it say?

1.1 Purpose • We do not bribe anyone

1.2 Scope and • Applies to all associates

Applicability • It addresses bribery
‒ Other aspects of business practice and
corruption are regulated in other
Novartis policies
 Novartis Global AB Policy
Know it, use it

2 1Principles
Introduction
& Rules What does it say?
2.11.1
Basic
Purpose
Rules • We do not bribe
– Directly or indirectly
– Public officials or private individuals

2.2 Gifts, Hospitality, • Gifts, hospitality and entertainment must be:

Entertainment – Modest, reasonable, and infrequent
1.2 Scope and – Never offered or provided with the intent of
Applicability influencing the recipient’s behaviour
• Aligned with NP4, SP3, OTCP3 etc.

• Grants and donations can only be given if

2.3 Grants and Donations
Novartis does not receive or is not perceived to
receive anything in return
• Aligned with NP4, SP3, OTCP3 etc.
 Novartis Global AB Policy
Know it, use it

2 1Principles
Introduction
& Rules What does it say?
2.41.1 Purpose with
Interactions • Additional rules and restrictions may apply to
Public Officials public officials

2.5 Political Contributions • Exceptional and in compliance with local laws

• Separate budget and approved in advance by
Country President
1.2 Scope and
Applicability
2.6 Facilitation Payments • No facilitation payments

• Engagement of Third Parties must have a

2.7 Third Parties legitimate need and in compliance with the Third
Party Guideline
• All financial transactions must be documented,
2.8 Books and Records
regularly reviewed, and properly accounted for
Novartis Global AB Policy
Third Party Guideline
Novartis Global AB Policy
Know it, use it