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Business Ethics & Conduct

Sovereign Wealth Funds: Governance & Risk for SWFs and Companies They Fund

Private companies that receive SWF and SOE investment, as well as the investors who arrange or co-invest with state-linked firms, should, when screening investments and assessing nonfinancial risk before and after the point of investment (and when additional investment is under consideration), the quality and risk inherent in the corporate structure and governance, as well as the business conduct controls of SWFs and SOEs, may affect them in the near- to longer term. In doing so, they should take a lesson from the PIF situation, post-Khashoggi.

Anti-Corruption Compliance

World Bank Accountability Act of 2017

The stated purpose of the World Bank Accountability Act of 2017 is to “increase accountability, combat corruption, and strengthen management effectiveness at the World Bank.” Among other measures, H.R. 3326 would, as summarized by the Financial Services Committee, “withhold a portion of future appropriations for the World Bank until the Treasury Department reports that the World Bank has undertaken reforms to fight corruption, strengthen management accountability, and undermine violent extremism.” In addition, the World Bank Accountability Act of 2017 would “authorize the Trump Administration’s request for reduced funding to the Bank’s International Development Association.”

International Business

Transactional, regulatory counseling and compliance, and ethics services for U.S. and foreign parties. AML/CFT, Sanctions,…
Doing Business in Emerging Markets

Sovereign Commercial Enterprises: Anti-Corruption and Confidentiality Risks

State-owned enterprises (SOEs, including sovereign wealth funds) are prominent players in international business. Given their ownership, SOEs have garnered scrutiny for their lack of transparency and heightened anti-corruption and anti-money laundering risk, as have individual SOE executives and other personnel who qualify as Politically Exposed Persons. In connection with commercial activities, SOEs are not protected in most cases by sovereign immunity. Thus, SOEs can, like their privately-owned counterparts, be subject to foreign legal processes. Given the greater scrutiny around SOEs and some of the high profile enforcement actions involving them directly or indirectly (for example, the 1MDB case), anti-corruption and other compliance, as well as good governance and risk management, are essential to avoid legal, commercial, and reputational risk and loss.

Corporate Governance

Dana Gas Deems its Own Sukuk Unlawful: Parsing the Dana Gas Statement

Dana Gas PJSC, the Sharjah, UAE-based gas producer, has unilaterally declared “unlawful” sukuk[2] instruments issued by the company in 2013 [3] (through, as issuer, Dana Gas Sukuk Limited, a Jersey public company with limited liability). This post discusses some of the Shari’ah, UAE law, and factual issues triggered by the Dana Gas statement on the unlawfulness of its sukuk.