This previous post highlighted the DOJ’s recent $778 million enforcement action against Lafarge S.A. (a French company that was acquired in 2015 by Switzerland based Holcim) and Lafarge Cement Syria (LCS) charging the entities “with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations.”
The previous post highlighted the scant purported U.S. nexus in connection with the underlying conduct and this post highlights additional issues to consider.
The First?
In various ways, the DOJ described its enforcement action against Lafarge as a “first time ever” type of enforcement action (see here). Human nature – I suppose – is to take credit for a “first time” enforcement action and hope no one notices otherwise, but it is sometimes interesting to note how current DOJ enforcement officials often have little knowledge of historical DOJ prosecutions.
For instance, in 2007 the DOJ announced a $25 million enforcement action against Chiquita Brands International. The headline of the DOJ press release stated: “Chiquita Brands International Pleads Guilty to Making Payments to a Designated Terrorist Organization And Agrees to Pay $25 Million Fine.” As stated in the DOJ release:
“The plea agreement arises from payments that Chiquita had made for years to the violent, right-wing terrorist organization United Self-Defense Forces of Colombia – an English translation of the Spanish name of the group, “Autodefensas Unidas de Colombia” (commonly known as and referred to hereinafter as the “AUC”). The AUC had been designated by the U.S. government as a Foreign Terrorist Organization (“FTO”) on Sept. 10, 2001, and as a Specially-Designated Global Terrorist (“SDGT”) on Oct. 31, 2001. These designations made it a federal crime for Chiquita, as a U.S. corporation, to provide money to the AUC.”
Sometimes It Can Be A Messy World
Terrorism of course is bad and offering support of any kind to terrorist organizations of course is bad as well.
Even so, sometimes it can be a messy world as reflected in the DOJ’s own charging language. As stated by the DOJ:
“Lafarge and LCS completed the construction of the Jalabiyeh Cement Plant in 2010 at a cost of approximately $680 million. Lafarge and LCS executives believed that keeping the Jalabiyeh Cement Plant in business and sharing the proceeds with the armed groups in control of the surrounding areas, including ISIS and ANF, was the best way to protect employees, to safeguard the asset from looting and destruction during the Syrian Civil War, and to enable Lafarge and LCS to benefit from the economic opportunity presented by the need to rebuild Syria following the cessation of hostilities. Neither Lafarge nor LCS made payments to ISIS or ANF because they supported the terrorist organizations’ ideology or methods.
[…]
By May 2012, the conflict had spread to areas immediately surrounding the Jalabiyeh Cement Plant. Some LCS employees were kidnapped for ransom, one LCS contractor was killed at a checkpoint, and armed militants began to regularly hijack LCS trucks.
[…]
By March 2013, the city of Raqqah, located less than a two-hour drive from the Jalabiyeh Cement Plant, had fallen to ISIS and ANF, among other armed groups. Both jihadist groups quickly established armed checkpoints at roads accessing the Jalabiyeh Cement Plant.
[…]
By the summer of 2013, Lafage and LCS could not continue to operate in Syria without negotiating and ultimately making payments to ISIS, ANF and other armed militants.
[…]
Holcim also publicly disclosed that payments were made to U.S.-designated terrorist groups:
The safety and security of LCS employees was of primary concern. As the situation in Syria deteriorated in late 2011, the plant became increasingly subject to disruption by local armed groups. These groups periodically interfered with employee transportation to and from the plant, restricted access to necessary supplies, and harassed customers. To deal with these problems, LCS used intermediaries to avoid direct contact with these armed groups as there was concern that direct contact would create additional risk vis-à-vis the Syrian government or other armed groups. Very simply, chaos reigned and it was the task of local management to ensure that the intermediaries did whatever was necessary to secure its supply chain and the free movement of its employees. As a result, notwithstanding any reservations they had regarding these intermediaries, LCS made and continued to make payments to such intermediaries in furtherance of operations. Having identified a mechanism for dealing with the challenges they faced, these methods were applied without regard to the identity of the groups involved. Beginning in early 2013, terrorist groups designated by the US and the EU were expanding into the area, along with other non-designated militant groups. It was in this chaotic environment that LCS operated and tried to keep its doors open. LCS management believed it was serving the best interests of the company and its employees who depended on LCS salaries for their livelihood. LCS management kept Lafarge SA well-informed of developments and security-related concerns through their appointed chain of authority. Those responsible for the Syria operations appear to have acted in a manner they thought was in the best interests of the company and its employees and, based on their communication and consultation along that same chain, in the belief that their efforts were fully understood, supported, and appreciated by their senior management. In hindsight any misdeeds may seem clear. However the combination of the war zone chaos and the “can-do” approach to maintain operations in these circumstances may have caused those involved to seriously misjudge the situation and to neglect to focus sufficiently on the legal and reputational implications of their conduct.”
