Background

The Department of Justice reports that a U.S. company has agreed to pay a criminal monetary penalty of $19.6 million to resolve charges that it violated the Foreign Corrupt Practices Act. This penalty is part of a three-year deferred prosecution agreement that will also require the company to enhance its compliance program and report on the implementation of that program. In a related matter, the company agreed in July 2018 to pay the Securities and Exchange Commission a $2 million civil penalty and about $6 million in disgorgement and prejudgment interest.

According to a DOJ press release, the company was charged with bribing Indian government officials to obtain or retain business, including approving a license to bottle a line of products the company sought to market and sell in India, securing orders of company products at government-controlled stores, and acquiring and renewing label registrations and licenses. The company was also charged with intentionally failing to implement internal controls to prevent bribery, affirmatively avoiding uncovering information related to improper activities and practices by third parties that presented corruption risks, and falsifying books and records to conceal corrupt activity.

DOJ states that it reached its resolution with the company based on a number of factors, including the failure to timely disclose the conduct, the nature and seriousness of the offense (including the involvement of senior officials), and the company’s lack of an effective compliance program at the time of the misconduct, failure to fully cooperate (e.g., refusal to accept responsibility for several years), and failure to fully remediate.

Clients and potential clients requiring support related to the FCPA should contact Kristine Pirnia.

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