Investigations & White Collar Crime: Tinder and Google – A Match for International Cooperation?
09 March 2020
The recent Airbus investigation illustrates the growing trend in international regulatory cooperation. This cooperation ensures cross-jurisdictional alignment, increases efficacy and increases the market’s understanding of regulators expectations, and indeed, the likely outcomes of those investigations. Cooperation eliminates contradictory approaches, plugs gaps in enforcement and addresses other regulatory inconsistencies. Historically, where there has been a lack of cooperation, duplication and inconsistencies have led to unfair and irreconcilable outcomes, so this relatively new trend should be embraced by both regulators and market participants who are the subject of such regulation. We examine examples of international cooperation in action.
France and the US
In January 2020, Airbus reached agreement with the French National Prosecutors (PNF), the UK’s Serious Fraud Office (SFO) and the US Department of Justice (DOJ). The agreement resolved a global investigation into allegations of bribery and corruption in the aircraft manufacturer. Allegations included bribery of officials in 16 countries, including Japan, Russia, China and Nepal, and inaccurate and misleading filing in the US.
The French Prosecutors took primacy in the investigation, requiring that the terms of the French blocking statute apply. The collaboration between the UK, French and US regulators demonstrates the difficulties such as data protection, evidence sharing and national securities matters that the regulators cooperation successful overcame.
The investigation culminated with Airbus entering into deferred prosecution agreements with the French and UK authorities. The deferred prosecution agreements suspend prosecution of Airbus for a period of three years subject to the terms of each agreement. Airbus has already vastly improved its internal compliance arrangements and as part of the DPA also agreed to continue to improve its internal procedures. Airbus also entered into a consent agreement with the US department of State. It agreed to settle all civil violations of the US International Traffic in Arms Regulation (ITAR), and to retain an independent export control compliance office. This office will monitor the effectiveness of Airbus’ control systems and their compliance with the ITAR. Airbus will pay a total of nearly €4 billion in fines. This equates to €2.1 billion to France, €984 million to the UK and €526 million to the US regulatory authorities
The Northern Irish police force, the PSNI, recently completed an investigation called Operation Shambala which saw the seizure of over £215 million. The investigations was described as “one of the most significant live investigations into money laundering in the UK”. It involved the cooperation of the PSNI with the assistance of the Criminal Assets Bureau and the Garda National Economic Crime Bureau in Ireland and various police authorities across the EU. The investigation involved over 50 companies, several of which were shell companies domiciled in Norther Ireland and elsewhere and over 140 bank accounts. The Chief Constable of the PSNI congratulated all of those multijurisdictional police forces involved noting that “tenacious and complex work brings results.”
In October 2019, the UK and the US governments signed a milestone Bilateral Data Access Agreement. The agreement will decrease the time it takes UK and US law enforcement agencies to access electronic data and evidence held by technology companies located in each other’s territory. This supplements the Mutual Legal Assistance Treaties (MLAT) which involved a multi-stage process. MLATs oftentimes take several months or even years to source and obtain data located overseas and allow for its transfer between jurisdictions. Similar negotiations between the EU and the US to facilitate access to electronic evidence in criminal investigations, and between the US and Australia are underway.,
The European Central Bank recently announced international cooperation efforts on central bank digital currencies. A number of other regulators, such as the Bank of England and the Swiss National Bank, are involved in the group that is tasked to assess the potential for a central bank digital currency. The group will share knowledge of emerging technologies, functional and technical design features and cross-border operability.
Cross-border cooperation between regulators is increasing and will likely soon become the norm. Companies must be wary of the consequences of such investigations and mindful of the legal rules which operate across multiple jurisdictions. The resolution of the Airbus investigation proves the effectiveness of international cooperation in tackling white collar crime and fraud. While Ireland has already cooperated with international regulators in the areas of competition, consumer protection and financial regulation, the Data Protection Commissioner’s approach to cross-border investigations under the co-operation and consistency mechanism of the GDPR into multinationals such as Tinder and Google will be crucial, to ensure cross border consistency and to appease any concerns from Brussels regarding the enforcement of GDPR. It remains to be seen whether Ireland’s regulators are up to the task.
For more information, contact a member of our Investigations & White Collar Crime team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.