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Foreign Subsidiaries Of French Pharma Company Sanofi Allegedly Bribe Kazakh And Middle Eastern “Foreign Officials” – Uncle Sam Collects $25.2 Million

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If history is any guide, September is likely to be an active month for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year ends.

Sure enough, yesterday the SEC announced an enforcement action against Paris-based pharmaceutical company Sanofi. The conduct at issue focused on employees and agents of the company’s subsidiaries in Kazakstan and various Middle Eastern countries providing things of value to “foreign officials, including healthcare professionals, in order to improperly influence them and increase sales of Sanofi products.”

In doing so, the enforcement action once again raises the policy issue of the U.S. bringing an enforcement action against a foreign company (domiciled in a country also party to the OECD Convention) for its interaction with non-U.S. officials. (See here for a prior post).

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SBM Offshore Resolves $238 Million FCPA Enforcement Action

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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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Various Individuals Associated With Rolls-Royce Criminally Charged In Connection With Kazakhstan – Chinese Pipeline Project

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As highlighted in prior posts here and here, in January 2017 the DOJ announced a $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce. The allegations included several generic references to employees at Rolls-Royce and Rolls-Royce Energy Systems (RRESI, an indirect subsidiary located in Ohio) who conspired to cause “to make over $35 million in commission payments to commercial advisors and others, knowing that the commission payments would be used to bribe foreign officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq and elsewhere, in exchange for foreign officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI, and affiliated entities.”

Earlier this week, the DOJ announced an FCPA enforcement action against five individuals based on the same Kazakhstan conduct alleged in the prior corporate action. That is, bribery in connection with an RRESI contract to supply gas turbine units to Asia Gas Pipeline LLC (AGP) for approximately $145 million.

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Rolls-Royce Resolves $170 Million FCPA Enforcement Action

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If you were scoring at home, the last few weeks of the Obama administration were quite active for Foreign Corrupt Practices Act enforcement. But then again this was expected.

First it was the $13 million joke of an enforcement action against Mondelēz International, Inc. on January 9th. Then it was the $30.4 million Biomet became an FCPA repeat offender enforcement action on January 12th. Then it was no U.S. nexus, no problem $30.5 million enforcement action against Sociedad Quimica y Minera de Chile S.A on January 13th. Then it was the DOJ’s announcement (summarized in this post) on January 17th that U.K. based Rolls-Royce plc agreed to pay the U.S. net approximate $170 million (including an unusual component never before seen in FCPA enforcement) to resolve an FCPA enforcement action concerning conduct in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola and Iraq. Then it was $6 million Orthofix Int’l also became an FCPA repeat offender enforcement action on January 18th. Then in the finals hours of the Obama administration it was unusual $7 million enforcement action against Las Vegas Sands (headed by major Republican donor Sheldon Adelson who was front and center at Trump’s inauguration) based on the same core conduct as the SEC’s enforcement action against the company nine months earlier.  Individual FCPA enforcement actions (here and here) were sprinkled in as well.

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Danish Subsidiary Exposes Analogic To $14.9 Million Enforcement Action

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Yesterday the DOJ and SEC announced (see here and here) a parallel Foreign Corrupt Practices Act enforcement action against medical device manufacturer Analogic Corp. and BK Medical ApS (Analogic’s Danish subsidiary) in which the entities agreed to pay approximately $14.9 million.

The conduct at issue involved alleged improper payments by BK Medical, primarily in Russia through distributors, and the government alleged that BK Medical took various steps to conceal its conduct from Analogic.

The enforcement action involved a DOJ non-prosecution agreement with BK Medical in which the company agreed to pay a $3.4 million criminal penalty and an SEC administrative order against Analogic in which the company agreed to pay approximately $11.5 million in disgorgement and prejudgment interest. In connection with the same administrative order, the SEC also announced that “Lars Frost, BK Medical’s former Chief Financial Officer, agreed to pay a $20,000 civil penalty to settle charges that he knowingly circumvented the internal controls in place at BK Medical and falsified its books and records.

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