InfoBytes Blog
German Multinational Chemical Company Agrees to Pay DOJ More Than $11 Million, Receives Declination of FCPA Charges
On Friday, June 16, the DOJ issued a declination letter to attorneys for North American affiliates of a German multinational chemical company, in which the DOJ declined prosecution and closed an investigation of the company and certain of its subsidiaries and affiliates regarding potential FCPA violations that occurred between November 2006 and December 2009. The affiliates, which trades only on German stock exchanges and which has no securities registered with the SEC, agreed to pay DOJ a combined $11.2 million in disgorgement and forfeiture.
According to the DOJ letter, a New Jersey-based company acquired by the affiliate companies in October 2006, made corrupt payments to officials at and related to a Republic of Georgia state-owned and controlled entity to ensure continuity of business. Upon discovering this conduct, the affiliates initiated an internal investigation and subsequently withheld monies earmarked for a company controlled by the Georgian entity. These monies comprise the approximately $3.4 million that the affiliates agreed to forfeit.
The DOJ letter stated that its decision is consistent with the FCPA Pilot Program, launched in April 2016 to encourage companies “to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.” Accordingly, the DOJ determined that the affiliates had, among other things, voluntarily self-reported potential FCPA violations, conducted a thorough and proactive internal investigation, and continues to cooperate fully and remediate its compliance program and internal controls. Notably, the DOJ letter does not foreclose future prosecution of any individuals, and the letter explicitly delineates DOJ’s expectation that the affiliates will continue cooperating fully in any ongoing investigation of individuals.