Judicial authorities in Germany are conducting an in-depth fraud investigation on the use of more than 200,000 diesel ‘defeat devices’ in cars produced by an international automotive group and international commercial vehicle manufacturer, as well as their subsidiaries. Coordinated searches to gather evidence are being carried out in Germany, Italy and Switzerland. The action was planned and coordinated with the support of Eurojust to ensure secure and efficient information exchanges between involved judicial and law enforcement authorities, agree on joint prosecutorial strategies and prepare operational actions, including today’s searches. The Frankfurt am Main Prosecution Service – Center for Commercial Criminal Matters – is leading the investigation in Germany against a number of responsible people working in the international automotive group. The investigation is focused on the suspicion that diesel engines installed in several car models sold by the company would be equipped with an illegal defeat device.  Continue reading…

by Frank Staelens

I would like to explain the regulation’s broad impact and to offer guidance for compliance. Most listed companies and large public organisations already consider whistleblowing management as an important governance mechanism with, in most cases, boards/audit committees being accountable to measure its effectiveness. This group is now moving toward the use of whistleblowing systems beyond reporting wrongdoing and starting to understand that instilling a transparent, “speak up” culture is perceived by stakeholders as a sign of good health. However, many other organisations still have a different position on the subject. But keep in mind, within the EU all member states have until December 17, 2021 to transpose the new whistleblower protection rules into national law.  Continue reading…

by Alex Movchan

We recently had an opportunity to speak with a man named Edmund Saunders, CICA, CFE (President of Institute for Internal Controls Europe, ex-advisor from the UK government to Polish officials in the banking sector). He is also very experienced and dedicated in the following fields of internal control, fraud, internal auditing, risk management, international banking and anti-fraud and anti-corruption – identification, avoidance and combatting techniques. Dear Edmund, thank you for finding time for the interview. I know that you have a lot of experience in building internal control systems, mostly in financial institutions, all around the world (in UK, Switzerland, USA, Poland, etc.). In your opinion, what should be the core focus, the main 2-3 objectives to focus on, while building an effective control system within an organisation? Continue reading…

The European Commission recently recommended that Member States do not grant financial support to companies with links to countries that are on the EU’s list of non-cooperative tax jurisdictions. Restrictions should also apply to companies that have been convicted of serious financial crimes, including, among others, financial fraud, corruption, non-payment of tax and social security obligations. The aim of today’s recommendation is to provide guidance to Member States on how to set conditions to financial support that prevent the misuse of public funds and to strengthen safeguards against tax abuse throughout the EU, in line with EU laws. By coordinating restrictions on financial support, Member States would also prevent mismatches and distortions within the Single Market.  Continue reading…

by Francesco Salerno

This is the second part in a series of two articles written by me about government control of investments in strategic enterprises following the Covid-19 outbreak. The first part can be found in the related items section. Taking into account the guidance outlined in the first part and to guard against the risks of predatory acquisitions of strategic national enterprises, various European countries, including Italy, France, Spain and Germany, have taken action with regard to the screening of foreign direct investments. Continue reading…

by Francesco Salerno

This article is the first of two parts written by me concerning governmental control of investments in strategic enterprises following the Covid-19 pandemic. The articles will be published on two consecutive days. The Covid-19 outbreak has been followed by a raft of measures to lessen its impact on the world of production. Indeed, the majority of countries have intervened in various branches of the law ‒ starting with contract, company and insol­ven­cy/bankruptcy rules ‒ with the stated intent of supporting the economy. Among the many other forms of intervention, changes have been made to the rules on the control of companies operating in strategic sectors. This is because companies often tumble in value in crisis situations, making it easier for them to be snapped up “cheaply”: hence the special attention paid to rules that give governments the power to control investments in strategic enterprises.  Continue reading…

by Alex Movchan

We have recently had the pleasure of speaking with Olga Lukashenko who is an Audit Director at Reanda Netherlands. She is an incredibly dedicated finance professional with experience in accounting, auditing and financial management. She also has a proven track record in preparation of consolidated financial statements according to IFRS and GAAP, IFRS-reporting implementation in different accounting systems, as well as auditing and independent assessment of financial and non-financial data. Olga has an impressive international career with in depth knowledge of audit practices. This year is very unusual in terms of the Covid-19 related situation and many Chief Audit Executives struggle to execute the audit plans given travel restrictions, additional limitations of resources and shifting business priorities.  Continue reading…

by Massimo Balducci

It is time to start some evaluation of institutional responses to Covid-19 emergency. Two questions need to be answered in this first evaluation: (a) was the emergency rightly evaluated or was it under- or over- evaluated? And (b) was the medical response correct and was it possible to adjust it via a trial and error approach? Our hypothesis here is that a misleading institutional construction of reality and weaknesses in the management of information might have caused harm possibly greater than the very virus itself. Was the emergency under- or over-evaluated? Continue reading…

by Michel Klompmaker

Last week, the number of registered unemployed (those claiming benefits) in the USA rose to 39 million. The chairman of the FED expects a further increase in the coming month. Meanwhile, last Sunday, May 24, 2020, the New York Times opens with a more than serious report covering the entire front page. Certainly not fake news. The 6 column heading reads “US DEATHS NEAR 100,000, AN INCALCULABLE LOSS”. The full front page is filled with about a thousand names with short descriptions of deaths from Covid-19 based on obituaries. Only 1 percent of the total. And in the meantime, the president of this country, as a kind of “monkey on the rock”, quietly continues to deal unfairly with mainly female journalists from serious media.. We repeat it again, political risks will be one of the biggest risk factors in the coming years. Continue reading…

The European Ombudsman, Emily O’Reilly, made a statement on May 11 that the European Banking Authority (EBA) should have disallowed Adam Farkas, its previous Executive Director, from assuming the position of CEO of the Association for Financial Markets in Europe (AFME), which is one of the main lobbyist groups of the financial sector. An investigation into this matter was subsequently launched after receiving complaints made by several MEPs and the Change Finance coalition. The European Ombudsman is an independent authority that examines complaints made against the EU. As such, Emily O’Reilly has found that the EBA should have rejected Adam Farkas’s move from the EBA to the AFME. Continue reading…