ABB to Pay $315M to Settle FCPA Charges
Switzerland-based global technology firm ABB agreed to pay over $315 million to settle a Foreign Corrupt Practices Act investigation over the bribery of an official at South Africa's state-owned energy company, DOJ announced Dec. 2. DOJ coordinated the resolution of the case with the SEC and authorities in South Africa and Switzerland.
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From 2014 to 2017, ABB paid bribes to the official -- a high-ranking employee at Eskom Holdings -- via its subsidiaries to secure multiple contracts. ABB made payments to subcontractors associated with the South African official that were "intended, at least in part," as bribes. ABB carried out fake negotiations to get the contracts at higher prices that the company prearranged with the official on the condition that ABB use a particular subcontractor, DOJ said. The Swiss company also falsely recorded the bribes to this subcontractor as business expenses.
Following an investigation, DOJ inked a three-year deferred prosecution agreement with ABB concurrent with the filing of criminal information in the Eastern District of Virginia accusing the company of conspiring to violate the FCPA's anti-bribery provisions and other FCPA violations. Two ABB subsidiaries also pleaded guilty to one count of conspiracy to violate the FCPA's anti-bribery provisions.
DOJ said mitigating factors included "ABB’s demonstrated intent to disclose the misconduct promptly to the department," "extraordinary cooperation" with the investigation, "extensive remediation, including carrying out a root-cause analysis of the misconduct and making significant investments in compliance personnel, compliance testing, and monitoring through the organization" and "commitment to further enhance its compliance program and internal controls." The company agreed to meet with DOJ "at least quarterly" and submit yearly reports over the status of its remediation effort, compliance testing and compliance proposals.
DOJ said ABB's compliance efforts earned it a 25% "discount" on the fine, which originally was set as the mid-point of the U.S. sentencing guidelines for fines. One-half of the $315 million penalty is credited against amounts the company pays to South African authorities in related proceedings, paired with other credits the company pays to settle SEC and Swiss investigations, DOJ said.
Assistant Attorney General Kenneth Polite said the case was DOJ's "first coordinated resolution" with authorities in South Africa, "reflecting our commitment to relationship-building and our ever-deepening partnerships in the global fight against corruption." He said South Africa has brought corruption charges against the Eskom official. “This resolution demonstrates the Criminal Division’s thoughtful approach to appropriately balancing ABB’s extensive remediation, timely and full cooperation, and demonstrated intent to bring the misconduct to the department’s attention promptly upon discovering it, while also accounting for ABB’s historical misconduct.”