A Sweden-based telecommunications company agreed to pay a combined $965 million in criminal fines and disgorgement to settle charges of Foreign Corrupt Practices Act ("FCPA") violations in connection with alleged bribes paid to a government official in Uzbekistan. The resolution is part of a global settlement involving the U.S. Department of Justice, the SEC, and Dutch and Swedish authorities.
Beginning in 2007 and continuing through at least 2010, Telia Company AB ("Telia") allegedly made over $330 million in corrupt payments to an Uzbek government official to allow Telia's Uzbek subsidiary, Coscom LLC ("Coscom"), to gain a greater share of the telecommunications market in Uzbekistan. According to the DOJ, the companies structured and concealed their bribe payments through, among other things, payments to a shell company that management knew was beneficially owned by a foreign official. To aid in the execution of these illicit transactions, Telia and Coscom allegedly made use of U.S. persons and companies, U.S. email addresses and U.S. banks.
The DOJ entered into a deferred prosecution agreement with the company, and an Uzbek subsidiary pleaded guilty to charges of conspiracy to violate the anti-bribery provisions of the FCPA and was sentenced on a one-count criminal information charge.
As credit for their extensive remedial measures and cooperation with the investigation, the DOJ stated that Telia and its subsidiary received a 25% reduction off the bottom of the U.S. Sentencing Guidelines fine range. This is consistent with DOJ's FCPA "Pilot Program," which was designed to encourage cooperation with investigators and voluntary self-disclosure of FCPA violations. The companies did not, however, receive any additional credit because they did not voluntarily self-disclose their misconduct.
If the criminal plea with the DOJ is approved in U.S. federal court, the combined resolution will mark the largest FCPA settlement ever.
Commentary / James Treanor
Representing the most significant corporate FCPA settlement under the Trump Administration, the Telia resolution serves as a clear demonstration that FCPA enforcement remains alive and well. The case also evidences close cooperation between U.S. authorities and their foreign counterparts (an increasingly common occurrence), which only multiplies the number of investigations (and fines) that companies may face. VimpelCom's nearly $400 million settlement in February 2016, which involved bribes allegedly paid to the same Uzbek government official involved in the Telia case, was an early example of international enforcement.
Companies should take note, and ensure that their anti-bribery compliance efforts remain as robust and effective as ever.
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