Noerr LLP: Concealed bribery is increasing - Noerr Compliance experts warn of new risks in joint ventures in Asia
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Noerr LLP: Concealed bribery is increasing - Noerr Compliance experts
warn of new risks in joint ventures in Asia
DGAP-Media / 23.04.2012 / 16:01
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Concealed bribery is increasing - Noerr Compliance experts warn of new
risks in joint ventures in Asia
Munich 23 April 2012. When entering into international cooperations,
companies are exposed to new bribery risks. 'Classical bribery has been
superseded by new and more subtle forms of concealed bribery' said Prof.
Dr. Thomas Klindt at today's Noerr Compliance Day to which the head of
Noerr's Compliance Group welcomed about 200 experts from Germany and
abroad. The many compliance risks in joint ventures where at the centre of
the considerations - after the Iran embargo of the EUR urgent questions on
dealing with contracts already concluded with Iranian partners also arose.
Shares instead of bribes
Noerr partner and criminal law expert Dr. Christian Pelz reported on new
concealed forms of bribery on the establishment of international joint
ventures. 'Above all in Asia, strategies have developed avoiding direct
demands for payment of bribes'. The greatest risk at present is the attempt
during the negotiations on the establishment of joint venture to include
individuals with no connection to the industry - mostly family members of
the other side - as shareholders with a minor participation.
The risks should not be underestimated. Companies which become involved in
such corporate structures are threatened with incalculable damage. That is
shown mostly in the daily cooperation in the joint venture. 'Minor
shareholders from outside the industry can, for example, block important
decisions or at least delay them' said Pelz. Even more problematic is the
ending of such a joint venture structure. 'One is exposed to blackmail
because courts consider the inclusion of shareholders from outside the
industry to be bribery just as direct payment of bribes'. The request to
include the shareholders is ultimately made precisely to avoid publicly
receiving bribes.
Many companies are badly prepared for the new threat. 'Compliance issues
often remain unconsidered in the course of the contract negotiations on a
joint venture but also in M&A negotiations' said Pelz.
How to deal with Iranian joint ventures is unclear
Together with other issues, cartel law problems in joint ventures and the
Iran embargo of the EU were also subjects of discussion at Compliance Day.
Noerr Partner Dr. Bärbel Sachs reported on problems in dealing with joint
ventures with Iranian partners. 'The companies affected are in the unknown
territory between possible compensation claims of the Iranian partners and
the EU embargo which is subject to criminal penalties' said the expert for
foreign trade law. It is often not clear from the terms of the embargo
where the borders lie between permitted business and incriminating conduct.
Cartel authorities increasingly investigate joint ventures
Cartel law plays an ever increasingly important role in joint ventures from
compliance aspects above all if cooperation between competitors is
concerned. 'There are risks in all phases of the cooperation, from the
formation to the ongoing operation' emphasised Noerr cartel law expert Dr.
Alexander Birnstiel in his lectures. 'The light treatment of cartel issues
on the formation of new joint ventures is particularly dangerous for board
members due to the risk of liability' warned the Munich Noerr partner.
National and European cartel authorities look very closely in recent times
whether, on the establishment of joint ventures, competition is restricted
by cooperation on the relevant market - and consistently prohibit the
cooperation. From the planning of the transaction up to the closing of the
deal, Birnstiel recommended therefore a thorough cartel law screening for
new joint ventures.
Noerr is a leading European commercial law form - with more than 470
professionals, five offices in Germany, seven in Central and Eastern
Europe, one office in London, one in Alicante (Spain) and a representation
in New York. The Noerr Compliance Team combines lawyers, tax advisors and
auditors from all departments and offices. The team is lead by Prof. Dr.
Thomas Klindt one of the leading European experts for product safety law
and product compliance.
According to the Wirtschaftswoche (Issue 16 of 16 April 2012) Noerr is
among the 25 top law firms for compliance.
End of Media Release
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Datum: 23.04.2012 - 10:01 Uhr
Sprache: Deutsch
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