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Canada-Based Kinross Gold Corp. Resolves Approximate $1 Million SEC Action Because Its Acquired Indirect African Subsidiaries Had Deficient Internal Controls

Kinross

Silly you for believing certain commentator hype that the Trump SEC would stop enforcing the Foreign Corrupt Practices Act or for thinking that the general lull in SEC corporate enforcement during the fourth quarter of 2017 meant anything.

In the second SEC corporate FCPA enforcement action in the last 2.5 weeks (see here for the prior Elbit Imaging action), the SEC announced yesterday that Canada-based Kinross Gold Corporation (a company with shares traded on the New York Stock Exchange) resolved an enforcement action “arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries.” Without admitting or denying the SEC’s finding in this administrative order, Kinross agreed to, among other things, pay a $950,000 civil penalty.

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Issues To Consider From The SBM Offshore Enforcement Action

Issues

This previous post went in-depth into the $238 million DOJ Foreign Corrupt Practices Act enforcement action against Netherlands-based SBM Offshore for alleged bribery schemes in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq.

This post continues the analysis by highlighting additional issues to consider.

DOJ Explains Its Original “Declination”

As highlighted in the original post, in 2014 SBM Offshore resolved a $240 million Dutch law enforcement action alleging bribery schemes in Equatorial Guinea, Angola and Brazil between 2007 through 2011. In connection with that action, SBM Offshore disclosed: “the United States Department of Justice has informed SBM Offshore that it is not prosecuting the Company and has closed its inquiry into the matter.”

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SBM Offshore Resolves $238 Million FCPA Enforcement Action

sbm

As highlighted in this prior post, in 2014 Netherlands-based SBM Offshore resolved a $240 million Dutch law enforcement action alleging improper payments to sales agents and foreign government officials in Equatorial Guinea, Angola and Brazil between 2007 through 2011. In connection with this action, the company disclosed: ““the United States Department of Justice has informed SBM Offshore that it is not prosecuting the Company and has closed its inquiry into the matter.”

Fast forward to earlier this month when, as highlighted in this prior post, the DOJ announced resolution of criminal charges against former SBM Offshore executive Anthony Mace and Robert Zubiate for their roles in a scheme to bribe foreign government officials in Brazil, Angola and Equatorial Guinea.

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BellSouth Gets Hung Up In Latin America

bellsouth

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

In 2002, the SEC announced the filing of a settled civil complaint against BellSouth Corporation charging the telecommunications company with violations of the FCPA’s books and records and internal controls provisions.

The conduct at issue focused on an indirect subsidiary in Venezuela (and BellSouth’s inability to “reconstruct the circumstances of purpose” of certain payments) and an indirect subsidiary in Nicaragua (which retained the wife of the chairman of a Nicaraguan legislative committee with oversight of telecommunications).

As frequently highlighted on these pages, the root cause of many FCPA enforcement actions are foreign trade barriers and restrictions and in this regard, as the complaint notes, Nicaraguan law prohibited foreign companies from acquiring a majority interest in Nicaraguan telecommunications companies.”

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Friday Roundup

Roundup

Odebrecht / Braskem settlement amount is significantly trimmed, a form of bribery?, quotable, deficient internal controls, and scrutiny alerts and updates. It’s all here in the Friday roundup.

Odebrecht / Braskem Settlement Amount Significantly Trimmed

There was much false and misleading reporting about the FCPA settlement amount in the December 2016 FCPA enforcement action against Odebrecht / Braskem.

As highlighted in this post, after accounting for various credits and deductions (including for payments to Brazil and Swiss law enforcement agencies and a claimed inability to pay) the net FCPA settlement amount (subject to potential future adjustments) was approximately $420 million. The $420 settlement amount consisted of approximately $260 million in connection with the Odebrecht criminal information and plea agreement; $94.8 million in connection with the Braskem criminal information and plea agreement; and $65 million in connection with the SEC’s related enforcement action against Braskem.

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