Panalpina prosecution - a warning to UK logistics industry

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Founding Partner of international forensic accountants Forensic Risk Alliance has warned the logistics industry that it should take heed of the prosecution of the Panalpina Group, supplier of forwarding and logistics services, which was recently fined over US$70m in fines under US bribery and corruption legislation. Panalpina is a Swiss company with no US listing but a big international customer base.



"The US Department of Justice is now dramatically expanding its investigation into within the logistics industry both in the US and worldwide, looking for bribery and corruption practices, under the US Foreign Corrupt Practices Act an Act that is the model for the UK's new Bribery Act which will become legislation in the UK this year." Says Toby Duthie, Founding Partner at Forensic Risk Alliance. "Panalpina jumped through many painful and expensive hoops to ensure compliance the rest of the sector is at risk if it doesn't catch up."

He adds; "The UK now has a Bribery Act that is arguably the toughest anti-corruption law in the world. This Act will be taken seriously and heavy fines and prosecution of managers in business will ensue. We expect that prosecutions will follow in the US within the logistics industry and in due course this will also become a target industry in the UK. Companies should be proactively pre-empting the possible risks to their businesses."

The Bribery Act makes it illegal for staff or the agents or suppliers of any company with a UK office, to partake in bribery or corruption anywhere in the world.  The Serious Fraud Office (SFO) will take a tough line and will be looking to prove the strength of the new Act when it becomes law.  

The logistics business is multinational, employing suppliers all over the world and managing the transfer of cargo and goods cross border all of which makes it an area that could easily be susceptible to investigation by the SFO.

Toby concludes; "So logistics companies in particular, need to ensure they are compliant and that their suppliers and sub-contractors are compliant with anti-corruption best practice. In fact many of their largest customers will insist on it as they are concerned they will be exposed through their customs agents and freight forwarders."

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