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Panalpina settles charges of violating the Foreign Corrupt Practices Act

In a November 4, 2010 press release, the Securities and Exchange Commission (SEC) announced a major settlement with international freight forwarder Panalpina, Inc. as well as six other oil services industry companies.

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Siemens AG pays $450 million to settle FCPA bribery charges Print E-mail

In a December 15, 2008 press release, the U.S. Department of Justice (DOJ) revealed the details of a $450 million criminal fine payment made by Siemens AG, a German company, and three of its subsidiaries.

The four pleaded guilty of violations related to the Foreign Corrupt Practices Act (FPCA). The three subsidiaries, Siemens S.A. – Argentina; Siemens Bangladesh Limited; and Siemens S.A. – Venezuela pleaded to one-count informations involving conspiracy to violate the anti-bribery and books and records provisions of the FCPA.

In recompense, Siemens AG paid $448.5 million in fines; and the other three paid $500,000 each. Most of the violations involved bribery to get contracts. The secondary charges of falsifying books and records and circumvention of internal controls often resulted from the company’s attempts to conceal the bribes.

According to the court documents, Siemens AG paid about $1.36 billion through various mechanisms, from the time of its March 12, 2001 New York Stock Exchange listing through approximately 2007.

Of this amount, approximately $554.5 million was paid for unknown purposes, about $341 million of it to consultants for unknown purposes. The remainder, about $805 million, the court contended was “intended in whole or in part as corrupt payments to foreign officials through the payment mechanisms, which included cash desks and slush funds”.

In the period 2000 to 2002, four of Siemens AG’s subsidiaries, Siemens France, Siemens Turkey, Osram Middle East, and GTT received 42 contracts valued at $80 million from departments within the government of the Republic of Iraq. These contracts came out of the United Nations Oil for Food Program.

The cost for these contracts, according to court documents, included kickbacks to the Iraq government totaling at least $1.73 million. As a group, the four entities earned more than $38 million in profits on those contracts.

The companies inflated the price of the contracts by approximately 10% prior to submitting them to the United Nations. They would then improperly account for the payments, which ended up as kickbacks to Iraqi officials, as commissions to business consultants.

Report violations of the Foreign Corrupt Practices Act (FCPA) here.

If you have information regarding the bribery of a foreign official, report it to the Foreign Corrupt Practices Act Reporting Center today. Complete the form on this page or call 1-800-934-2921 for a free no obligation consultation.