U.S. Food Processing Company to Pay $54 Million to Settle Foreign Bribery Charges
The Ukrainian subsidiary of an Illinois-based food-processing and commodities-trading company has agreed to pay a $17.8 million penalty to the Department of Justice and an additional $36.5 million in disgorgement and prejudgment interest to the Securities and Exchange Commission to resolve charges that it violated the Foreign Corrupt Practices Act. This company was charged with paying about $22 million to third-party vendors to pass on bribes to Ukrainian government officials. In return, the Ukrainian subsidiary and a German subsidiary obtained over $100 million in value-added tax refunds, resulting in a benefit of approximately $41 million.
In addition to the monetary penalty, the U.S. company entered into a non-prosecution agreement with the DOJ in connection with its failure to implement an adequate system of internal financial controls to address the making of improper payments both in Ukraine and by a joint venture in Venezuela. The NPA will require the U.S. company and its Ukrainian subsidiary to cooperate with the DOJ, periodically report the companies’ compliance efforts, and continue implementing enhanced compliance programs and internal controls designed to prevent and detect FCPA violations.
According to a DOJ press release, the agreements acknowledge the U.S. company’s timely, voluntary and thorough disclosure of the conduct and its extensive cooperation with the agency, including conducting a world-wide risk assessment and corresponding global internal investigation, making numerous presentations to the DOJ on the status and findings of the internal investigation, voluntarily making current and former employees available for interviews, and compiling relevant documents by category for the DOJ, as well as the company’s early and extensive remedial efforts. The DOJ also expressed its appreciation for the cooperation and assistance of German law enforcement authorities, which reached a resolution with the Germany subsidiary of the U.S. company in a parallel investigation.