Els Janssens Ghada El Ehwany - mecomed.com · Els Janssens Ghada El Ehwany ... Overview- Amendments to the Penal Code- 2016 ... Considerations regarding reporting in the UAE PENAL

UAE Current Awareness Update & Investigations in the workplace Els Janssens Ghada El Ehwany 12 October 2017

1 UAE Current Awareness Update 2016/2017

© 2017 Baker & McKenzie LLP

Corruption and bribery related crimes Overview- Amendments to the Penal Code- 2016 • Anti-bribery provisions are prescribed in the PC

• Material amendments were introduced to the relevant anti-bribery provisions

• More stringent penalties

• Expansion of the definition of a public official

• Bribery of foreign officials or officials of international organizations is now captured

• Extraterritoriality of bribery crimes

• No time bars on bribery crimes

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Data protection related crimes? Overview- Amendments to the Penal Code- 2016

Article (380) bis

• Imprisonment shall be inflicted upon whoever unrightfully copies, distributes or provides a third party with the content of a phone call or message or information or data or otherwise that he [examines][viewed] by virtue of his profession.

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Criminal liability of corporate entities Overview- Amendments to the Penal Code- 2016

“Corporate persons (other than governmental agencies and their official departments, public organisations and corporations) are liable for any criminal act committed, for their account or in their names by their representatives, directors or agents. In such case, the Court may only impose upon the corporate person fines, confiscations and other criminal measures provided in the law. However, if the criminal sanction entails other principal sanctions in addition to a fine, only the fine (not exceeding AED500,000) will apply.

The foregoing applies without prejudice to any other special law that prescribes different sanctions.”

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Competition Law Exemptions- update

• New Developments - Resolutions Nos. 13 and 22 of 2016 clarified essential areas of the Competition Law

• Still require a lot of guidance on practical issues

• Specified exempted sectors (as is)

• Pharmaceutical products (As opposed to medical devices)

• Stated owned entities (level of control now defined)

• Government ownership of 50% or more

• Small and Medium Sized Establishments (now defined)

• Trading and services sector: 250 employees, turnover does not exceed AED 200M

• Industrial sector: 200 employees, turnover does not exceed AED 250M

• Registered commercial agency agreements (as is) - exempted

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Competition Law Market Share Thresholds Defined

• A “dominant position” is created if the market share of the respective establishments exceeds 40% of the total transactions in the relevant market.

• An “economic concentration” is created if the market share of the combined establishments exceeds 40% of total transactions in the relevant market.

• A restrictive agreement will be deemed to have a “low/weak impact” if the total share of the parties does not exceed 10% of the total transactions in the relevant market.

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Competition Law Total Transactions- Relevant Market

• “Total Transactions” – unclear how this will be assessed

• “Relevant Market”- determined in accordance with the principle of substitution in commodities and geography on the basis of price, features and use. (MoE Handbook of Competition 2016)

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Competition Law Compliance

Despite the practical difficulties – we must apply the Law.

Example of MoE reviewing an application for merger control

Need to negotiate and draft contract with competition compliance in mind

i.e. include warranties and conditions precedent in M&A documents addressing merger approval requirements

Application will be difficult but

Compliance questionnaire

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2 Investigations in the Work Place Case study


Investigations- sources and triggers

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Whistle blower

Audit and financial control

HR/employee relations process

Due diligence

Customer/investor/employee/agent

complaint

Litigation

Dawn raids


Case study – Heart Co pacemakers

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• HeartCo is a large UK based entity and manufactures pacemakers.

• HeartCo has developed a new technology of pacemakers “ Super Pace” which is CE marked in the EU but has no registration with MOH in UAE.

• HeartCo uses a distributor “Local Co” in the UAE for the distribution of its products.

• Dr. Smith, a UK cardiavascular surgeon, was invited by HeartCo to attend a medical conference in the UK and has received training on the use of Super Pace.

• Dr. Smith flies every 2 months to the UAE to perform operations in Al Ain.

• Dr. Smith is good friend of Mr. MENA Sales Rep of HeartCo and requests 4 Super Paces for use in a series of imminent procedures scheduled in the UAE.

• Dr. MENA Sales Rep of HeartCo is very happy because his PNL has suffered since the oil crisis and it is almost bonus time.

• Dr. MENA Sales Rep contacts Local Co who also had been complaining about business slowing down at the last regional distributor meeting: Mr. MENA Sales Rep tells Local Co that Dr. Smith is an important growth client.

• Local Co uses its connections in the customs and the shipment was swiftly released from the Dubai Customs.

• Dr. Smith operates and uses all 4 Super Paces in patients in Al Ain – He reports to Mr. Sales Rep the successful outcomes and the satisfaction with the new product. He promises to use many more of these.

• Mr. Sales Rep proudly shares the information internally. The message gets forwarded to Mr. Regulatory Affairs Director

• Mr. Regulatory Affairs Director realizes that Super Pace is not yet registered in UAE.

• Mr. Regulatory Affairs Director contacts the compliance team.


Scoping: the investigation process

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Investigation

Detection Preliminary

Assessment

Objectives

and Scope

Immediate

Steps

Conduct

Investigation Response


Immediate Steps

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Secure Evidence

Suspend employees/suspend

payments/cancel contracts?

Consider insurer notification

requirements

Involve law enforcement?

Consider communications / PR


Managing the situation

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• Report it internally.

• Appoint a team to coordinate a response – appoint a single spokesperson, set up a “war room”, team should be senior people from relevant departments and external advisors e.g. Legal, Compliance, Finance, IT, HR, Communications, PR.

• Appoint a team to scope and evaluate the situation and look into the relationships.

• Understand your reporting requirements and your likely timeframe before you have to disclose any issues externally.

• Do your due diligence - gather data, ensure you have access to key witnesses, technology and documents relevant to the investigation.

Initial issues / red flags:

• Does your company have a crisis management plan?

• Do you have proper processes in place to avoid any corporate criminal liability issues down the line?

• Does your company have clear document retention policies and codes of conduct?

• What are your disclosure requirements?


Considerations regarding reporting in the UAE

PENAL CODE:

• There is a general duty to REPORT crimes – Art 274 PC [non-self incrimination]

• Unlike in some other jurisdictions there is no perceived benefit of voluntary reporting under UAE law (only in express cases)

• Voluntary reporting is unlikely to be considered as a mitigating circumstance

• Establishing compliance with legal requirements will assist in negligence related crimes

Health Regulations:

• Medical Liability Law of 2016: Article 5(4): HCP shall not use unauthorised device: No criminal offence but disciplinary sanctions

• UAE Law No 4 of 1983: Prohibition of import if not registered: criminal offence

• No specific reporting obligations MOH or HAAD (unless safety issues) but general rules apply

• Risk: HAAD inspections of facility?

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Reporting and remediation

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Investigation report considerations

Remediation measures:

stop misconduct

personnel responses

policies and procedures

compliance review

reporting to stakeholders

reporting to authority/regulator?

? Questions

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Els Janssens Ghada El Ehwany - mecomed.com · Els Janssens Ghada El Ehwany ... Overview- Amendments to the Penal Code- 2016 ... Considerations regarding reporting in the UAE PENAL