Bribery Act & Proceeds of Crime - Written by on Friday, March 29, 2013 4:32 - 0 Comments

Image Sensing Systems reports probe into possible violations of the UK Bribery Act to DOJ & SEC following Polish investigation

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Investigation Matter

We learned that Polish authorities are conducting an investigation into violations of Polish law related to tenders in the City of Łodź, Poland. In December 2012, the regional prosecutor charged two employees of ISS Poland with, among other things, criminal violations of Polish tender and corruption law related to a project in Łodź. Neither the Company nor any of our subsidiaries has been charged with any offense. A Special Subcommittee of our Audit Committee comprised solely of independent directors has retained independent counsel and accounting advisors to conduct an investigation focusing on possible violations of Company policy, internal controls, and laws, including the Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act and Polish law. This investigation is ongoing, and we are voluntarily disclosing this matter to the Securities and Exchange Commission and the Department of Justice.

We are cooperating with the Polish prosecutor and intend to cooperate with any other governmental investigation into these matters. We have taken remedial actions, including ending the employment of the two Polish employees, and we are assessing and implementing enhancements to our internal policies, procedures and controls. We cannot predict the outcome of this matter at this time or whether it will have a material adverse impact on our business prospects, financial condition, operating results or cash flows.”

So read the disclosure in the 10k for Minnesota-based Image Sensing Systems.

In a press release on the same day as the publication of the 10K the CEO said:

“We take these matters very seriously, and are cooperating fully. Image Sensing Systems aims to conduct its business lawfully and ethically. We have taken remedial actions, including ending the employment of the two Polish employees. We are also assessing and implementing enhancements to our internal policies, procedures and controls. The Company’s known costs related to the investigation to date were immaterial in 2012 and approximately $1.5 million through March 22, 2013. While we are working diligently towards a timely conclusion, we are presently unable to determine the likely outcome or range of loss, if any, or predict with certainty the timeline for resolution of these matters,” said Mr. Tufto.

While the disclosure was covered by the WSJFCPA blog and others earlier in the week from a UK perspective the disclosure is interesting from a couple of perspectives.

First, the disclosure of the internal investigation references possible violations of the “UK Anti-Bribery Act (sic)”.

ISS has operations in the UK and elsewhere.

Second, the disclosure notes that “This investigation is ongoing, and we are voluntarily disclosing this matter to the Securities and Exchange Commission and the Department of Justice”.

The disclosure says that ISS “intend to cooperate with any other governmental investigation into these matters” though there is no specific reference to the UK SFO.

 


 

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