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The Department of Justice and the Securities and Exchange Commission announced Feb. 18 a total of $795 million in penalties in “one of the largest global foreign bribery resolutions ever.” This amount includes a $230.1 million criminal fine to be paid to the DOJ under a deferred prosecution agreement, $167.5 million to the SEC and $397.5 million to Dutch regulators. The penalties are being assessed on a Netherlands-based company and its Uzbek subsidiary after they admitted to making more than $114 million in bribery payments to an Uzbek government official to enter and continue operating in that market.
According to a DOJ press release, the companies structured and concealed the bribes through various payments to a shell company that certain management knew was beneficially owned by the Uzbek official. Rather than implement and enforce a strong anti-corruption ethic, certain executives sought ways to give the company plausible deniability of illegality while knowingly proceeding with corrupt business transactions.
The DOJ notes that the criminal penalty reflects a 45 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range in light of the companies’ prompt acknowledgement of wrongdoing after being informed of the department’s investigation, their willingness to promptly resolve their criminal liability on an expedited basis and their extensive cooperation with the investigation. However, the companies did not receive more significant mitigation credit, either in the penalty or the form of resolution, because they did not voluntarily self-disclose their misconduct after an internal investigation uncovered wrongdoing.
The parent company has also agreed to implement rigorous internal controls, retain an independent compliance monitor for three years and cooperate fully with the DOJ’s ongoing investigation.