Responding to Mounting Pressure on Inhouse Lawyers

1. Responding to Mounting Pressure on Inhouse Lawyers Inhouse lawyers face increasing challenges guiding their company through the international business environment. In this session Nick Burkill and Jan M. Greve address a range of different challenges and provide practical guidance. Real Life Challenges The Laws Increased Criminalisation Threat of Discovery Threats to Group Structures Responding to the pressure

2. Bribery:Anti bribery standards and challenges currently facing Norwegian and other West European companies: • For Asia as a whole it is estimated that 40% of all firms depend on bribes to maintain or develop business and the similar number for Russia is said to be 60% • Angola is seen as Norway’s main trading partner in Africa despite estimates from Global Witness indicating that at least 15% of the country’s oil revenues are paid to governmental officials

3. Bribery: In the headlines: BLE ADVART DØMT ULOVLIGE: Jon Fredrik Baksaas trosset advarsler om at de indiske lisensene var kjøpt …….

4. Bribery:

5. Bribery:Anti bribery standards and challenges currently facing Norwegian and other West European companies: • Experiences of Norwegian and other European companies • The solution to the dispute over dividing the Barentz Sea and part of the Arctic Ocean into clear economic zones may open the way for cooperation on a grand scale • Lack of transparent and efficient bureaucratic procedures, problems with finding reliable local partners, tax regime and corruption as obstacles to investments • The fine balancing act between efforts to control risk and efforts to build trust • Increasing enforcement activity in the US and UK

6. Bribery:UK Law • Basic offences of bribing, being bribed, bribing foreign public officials • New offences: • Corporate: failing to prevent corruption • Senior officers: consenting to or conniving (turning a blind eye) in corruption • UK courts’ Jurisdiction under the Act: • Basic offences: act or omission within the UK jurisdiction; or a relevant person having a close connection with the UK • Failing to prevent corruption offence: UK commercial organisation or foreign commercial organisation doing part of its business in the UK • Senior officers offence: individual with close connection to the UK • Requirement of compliant adequate procedures

7. Bribery:Real life challenges re zero tolerance for corruption: • Partners of a law firm in Asian country turned out to play poker on a regular basis with governmental officials • Corrupt custom control officer claimed small amount of cash to release critical software package (and to avoid millions in penalties for late delivery) • Immigration officer who offered to waive visa obligation for $50 in cash • $500 to avoid blood test at immigration in African country with widespread HIV • Invites to football matches, tennis tournaments, etc • Police issuing on the spot fines in cash

8. Bribery:Responses: • Assess the risks faced by the company • The introduction or updating of effective anti-corruption policies and procedures tailored to the risks • leading from the top • prohibition of bribery • dealings with agents • gifts, hospitality & donations • conflicts of interest • record keeping • reporting • The enforcement of anti-corruption policies and procedure • Use relevant recognised principles

9. Long Arm Jurisdiction:Legal framework • Anti-trust laws • Securities fraud laws • Foreign Corrupt Practices Act • Bribery Act • Export Administration Regulations

10. EMBARGO: In the headlines: Derfor ble kubanerne Utestengt

11. Anti Trust: Dawn raids and legal protection • Range of laws and regulations authorise competition authorities to secure evidence and issue fines to those suspected of breaking competition laws

12. – SAS får 565 millioner kroner i bot EU-kommisjonen har ilagt flyselskapet SAS en bot på 565 millioner kroner for ulovlig prissamarbeid om flyfrakt, melder avisen Le Monde. Tolv flyselskaper er ilagt til sammen 800 millioner euro, tilsvarende 6,5 milliarder kroner, i bøter av EU-kommisjonen, skriver Le Monde. Ulovlig prissamarbeid Blant selskapene er KLM, Air France og British Airways. EU-kommisjonen har i over fire og et halvt år etterforsket 26 flyselskaper for ulovlig prissamarbeid om flyfrakt. Les også: SAS må betale Norwegian 175 millioner Selskapene har allerede betalt bøter for den ulovlige virksomheten i USA og inngått forlik med en rekke kunder i USA og Canada om erstatning. Veidekke-sjef bekrefter prissamarbeid Publisert 26.01.11 - 23:27, endret 27.01.11 - 14:17 (© NTB) Konsernsjef Terje Venold i Veidekke bekreftet onsdag kveld at selskapet har deltatt i ulovlig prissamarbeid i Midt-Norge, melder NRK. BEKREFTER: Terje Venold, konsernsjef i Veidekke, måtte svare for prissamarbeid-anklager. Foto: Berit Roald/Scanpix Foto: Foto: - Det er helt tydelig med det som har fremkommet at det har forekommet ulovlig prissamarbeid, sier Venold til NRK.Han avviser imidlertid at konsernledelsen har visst om prissamarbeidet, noe den tidligere medarbeideren i Kolo Veidekke påstår. Anti Trust: Redertopper kan bli felt Av Roy Freddy Andersen Publisert 30.03.04 - 07:05, endret 30.03.04 - 07:33 (VG) NEW YORK (VG) Ledelsen i Stolt-Nielsen har i god tro gitt opplysninger til FBI som kan føre til straffereaksjoner mot toppsjefen Niels Gregers Stolt-Nielsen og rederpappa Jacob. BØTELAGT: Tolv flyselskaper er ilagt til sammen 800 millioner euro, tilsvarende 6,5 milliarder kroner, i bøter av EU-kommisjonen, skriver Le Monde. Blant selskapene er KLM, Air France og British Airways - og SAS. Foto: ODD ANDERSEN/Afp Bøter og fengselstraff for Odfjell-topper Statoil får de største bøtene Det er ikke første gang bedriften får solid bot.

13. Long Arm Jurisdiction:Solutions • Anti-trust • employee training • prohibitions on commitments breaching anti-trust laws • encouraging employees to take advice • informal • FCPA/Bribery Act • risk review • policies & procedures • enforcement • Generally • relevant local advice

14. Insider dealing in Norway: • 1985: New legislation • 2000: One conviction in 1995 (Vesta) • 2008: Six further convictions • Now: Eitek-Jervan fikk ubetinget fengsel Tross full tilståelse, ble det ubetinget fengselsstraff forKongsberg-mannen Lars Jervan (44). Han var i utgangspunktet anklaget både for innsidehandel og skattesvik knyttet til virksomheten i Nera Networks, datterselskap til det børsnoterte Drammens-firmaet Eltek. Jervan var leder i Nera Networks. Påtalemyndigheten har frafait punktet om innsidehandel. Fem måneder Kongsberg tingrett ved sorenskriver Stein Husby er kommet til at Jervans skattesvik kvalifiserer til ubetinget fengsel. Hvis tilståelsesdommen blir stående, venter en fengeisstraff på fem måneder frarukket 59 dager i varetekt. Stangeland beskyldes for innsidehandel Solgte et stort antall aksjer rett før svake kvartalstall ble lagt fram. Les mer Dnb Nor får 26 millioner i straff for innsidehandel Forelegg og inndragning fra Økokrim etter flere brudd på verdipapirhandelloven. Nettavisen-journalist dømt for ulovlig innsidehandel Domt til å sone fire måneder i fengsel. Les mer Journalist risikerer 3,5 års fengsel for innsidehandle Norges strengeste innsidedom Tidligere stjememegler Per-Robert Jacobsen er dømt til ett og et halvt års fengsel for innsidekriminalitet. Han anker dommen. Seks biotek-ansatte siktet for innsidehandel Skal ha handlet aksjer like før positive resultater ble offentliggjort. Journalist dømt for innsidehandel Nettavisen-ansatte Thomas Gulbrandsen må i fengsel for innsidehandel i Sinvest. VEDTAR BOTEN:Statkraft innrømmer markedsmanipulasjon og innsidehandel. Straffes for innsidehandel Sju tiltales for innsidehandel Onsdag vil statsadvokat Harald L. Grønlien offentiggjøre påtaleavgjørelsen I saken mot de sju som er siktet for innsidehandel med Acta-aksjer. Fred A. Ingebrigtsen tiltales som hovedmann, mens de øvrige seks siktede tiltales for medvirkning.

15. Insider dealing:The Law • Insider with inside information • deals in securities • encourages another to deal in securities • discloses the information • Inside information is specific information about particular securities that is not public and would be likely to have significant effect on price if made public • Insiders may not be aware of the relevance of their disclosure .

16. Insider dealing:Solutions • Employee training • Identify and protect relevant transactions • Reporting internally • Clearance requirements • Internal investigations and enforcement .

17. Money Laundering: The threat In the headlines: Swansea mortgage fraud solicitor jailed

18. Money Laundering:The law • Principle offences: • concealing, disguising, converting, transferring the proceeds of crime • assisting the acquisition, retention or use of the proceeds of crime • acquiring, using or possessing the proceeds of crime • Terrorism offences: • similar offences relating to terrorist funding • Regulated sector offence of failing to report suspicion of money laundering • Offence of making a disclosure likely to harm an investigation once a report has been made to the authorities

19. Money Laundering:Responses • Due diligence • understanding transactions • understanding counter-parties • risk analysis • Enforcement of policy • internal investigation

20. Corporate Governance and Liabilities of Individual Officers: Legal advice giving rise to criminal charges: Jahre-advokat går i fengsel Flere tiltalt i Norgeshistoriens største skattesak Ernst & Youngs advokat Erik Keiserud sier til avisen at “Etter vår mening er det ikke foretatt handlinger som gir grunnlag for straffansvar hos Ernst & Young”. Revisorselskapet Ernst & Young er «både overrasket og skuffet over at Økokrim har tatt ut tiltale» mot to av selskapets ansatte. - Vi kan ikke se at det er grunnlag for å bebreide dem for det arbeid som er gjort, skriver selskapet i en pressemelding.

21. Corporate Governance and Liabilities of Individual Officers : • Among challenges faced by Kvaerner in 2001 was the risk of parent becoming unable to repay group debt and the potential liability of management and board members (of subsidiaries) contributing to group cash pooling. Over the last 10 years in Norway: • About 50 decisions by Lagmannsrettene and Høyesterett on individual liability for board members • About another 50 decisions on such liabilities by Tingrettene • Anticipated that about another 100 such cases were settled out of court • Courts in Norway apply stricter judgement in such cases for individuals with special competences; especially for auditors, but reason to believe also applicable to (inhouse) lawyers

22. Corporate Governance and Liabilities of Individual Officers: • Ensuring compliance with laws and regulations impacting companies • Requirements of individuals

23. Corporate Governance and Liabilities of Individual Officers:Solutions • Policies • group controls/authorities framework • tenders and contract policy • legal • company secretariat • financial planning & property control • taxation • group audit • environment, health & safety • business ethics • intercompany trading • Individuals • understand and comply with fiduciary duties • documenting decision-making • monitoring business activities • keep asking critical questions .

24. Corporate Governance and Liabilities of Individual Officers: Piercing the Corporate Veil From DN Article in 2004: “Truer Aker Kværner Det australske gruveselskapet Equatorial Mining truer med nye rettssaker mot hele Aker Kværner dersom selskapet gjør alvor av truselen om å slå det amerikanske datterselskapet Kvaerner (US) Inc. konkurs. Dersom Aker Kværner erklærer sitt amerikanske datterselskap konkurs for å unngå å betale den idømte erstatningen, vil Aker Kværners ledelse utsette hele sin globale virksomhet for risikoen for nye rettssaker. En konkurs vil medføre at hele Aker Kværner-konsernet blir dratt inn i Equatorials rettsprosesser mot det amerikanske datterselskapet, sier Equatorials amerikanske advocat, Robert J. Quinn til Dagens Næringsliv. Quinn sier et forsøk på å erklære det amerikanske datterselskapet konkurs, vil kreve en enda nærmere granskning av Aker Kværners regnskapspraksis. Ingen kommentar I Aker Kværner ønsker man ikke å kommentere saken. - Vi har hørt, og respondert på, vår motparts argumentasjon i rettssalen, og domstolen har slått fast at denne saken er isolert til et av våre amerikanske datterselskaper. Nye partsinnlegg fra deres advokat nå ser vi ingen grunn til å kommentere nærmere, sier informasjonsdirektør Geir Arne Drangeid i Aker Kværner til DN.”

25. Corporate Governance and Liabilities of Individual Officers:Piercing the Corporate VeilLegal framework • A way in which corporations can fail to accomplish their purpose of limiting and containing liability • When courts “pierce the corporate veil” they treat different corporations as if they were a single corporation • The key question is often if the parent and its subsidiary acted and presented themselves as one corporation to such an extent that it is fair to treat them in legal proceedings as if in fact they are one corporation • Corruption

26. Corporate Governance and Liabilities of Individual Officers: Piercing the Corporate VeilSolutions • It is in practice primarily the task of in-house lawyers to maintain the “walls” between the corporations and thereby in multinational groups often save millions of dollars when “walls” successfully withstand attack • Precautionary measures eg: • arms length inter company agreements • clear company policies • website information • corporate formalities, business cards, stationery used in correspondence, marketing materials, e-mail signatures, etc. • documented training, audit of business practices, etc.

27. Discovery: • Electronic Documents • Risks of • providing inadequate disclosure • not understanding the effect of disclosure • destruction of documents • competing document retention and discovery laws • losing privilege and its limitations

28. Discovery:The law • The obligation to produce relevant documents to an opponent whether or not a document harms or supports the case • This extends in the US to production of witnesses for pre-trial examination • Documents may be privileged from production

29. Discovery:Responses • Document preservation • Preventing dangerous documents being created • Document management • Proportionate reviews and analysis

31. Nicholas Burkill • Nick has broad experience of representing and advising clients on a wide range of domestic and international disputes. His experience includes advising and representing companies on fraud and corruption issues, including recovering the proceeds of fraud and corruption and conducting internal corporate investigations. • Nick is a solicitor advocate. From 2002 – 2008 he served as a member of the Civil Procedure Rule Committee and in 2009-2010 served as a member of working parties responsible for drafting the innovative electronic disclosure practice direction and questionnaire now in use in English courts. • Third party comments include • “Burkill … scores highly with observers, who admire the “professionalism and confidence” he displays in complex cases.” (Chambers UK) • “Nicholas Burkill is instrumental in shaping strategy for clients embroiled in major fraud and commercial disputes. Peers deeply approve of an approach that “combines force with judgment.” “[Nick] works around the clock for clients ”who commend him for his talent in “explaining complex concepts to the non-specialist.” (Chambers UK) • “Nicholas Burkill is an expert in bribery and corruption matters, and is widely considered by sources to be an authority on the implications of the new Bribery Act. Sources describe Burkill as "extremely personable, very bright, client-focused and always looking for the best commercial solutions." (Chambers UK) • “Nicholas Burkill … is ‘an enormously experienced fraud litigator, with great depth of knowledge; intelligent and hardworking, with an excellent sense of humour. One of the best around’.” (Legal 500) • An opponent who gave evidence to the High Court that “I cannot recall another case in 30 years of practice that has been defended more ferociously”

32. Jan Greve • Of Counsel attorney in Dorsey’s Corporate group, Norwegian Advokat. Practice areas include international mergers and acquisitions, corporate finance, engineering and construction contracts, resolution of legal disputes, risk management, corporate policies and procedures, management training on contracts and commercial awareness, general corporate and commercial work, including negotiations, contact with authorities etc. • Related Experience • Kvaerner Group1989 to 2002. Group Legal Director and Senior Vice President (based in London from 1996). Several board memberships in many of the most important subsidiary companies of the Kvaerner Group. • Norsk Hydro1985 to 1989. Four and a half years as in-house counsel, including one and a half years as Head of Legal in one of Norsk Hydro’s subsidiary companies in Germany. • Norwegian Tax Authorities1978 to 1985. Including approximately 3 years as tax inspector in one of the principal inland revenue offices (Baerum) in Norway. • Lier, Röyken, Hurum County Court1981 to 1982. 1 year as assistant judge in a Norwegian County Court. • Professional Activities • Rica Hotels - 1989 to 2010. Non-executive director of one of Norways foremost hotel chains  • Aker Insurance AS - 1991 to date. Chairman of the Control Committee