Dutch Company Settles With SEC Over FCPA Violations

The U.S.  Securities and Exchange Commission (SEC) recently announced a global settlement, along with the U.S. Department of Justice and Dutch regulators, that requires telecommunications provider VimpelCom Ltd. (NASDAQ: VIP) to pay over $795 million to resolve its violations of the Foreign Corrupt Practices Act (FCPA) to win business in Uzbekistan.

This settlement requires VimpelCom to pay $167.5 million to the SEC, $230.1 million to the Department of Justice and $397.5 million to Dutch regulators. Also the company must retain an independent corporate monitor for at least three years.

In the report, the SEC alleges that VimpelCom offered and paid bribes to an Uzbek government official related to the president of Uzbekistan as the company entered the Uzbek telecommunications market and sought government-issued licenses, frequencies, channels and number blocks.

At least $114 million in bribe payments were funneled through an entity affiliated with the Uzbek official, and roughly a half-million dollars in bribes were disguised as charitable donations made to charities directly affiliated with the Uzbek official.
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Andrew J. Ceresney, director of the SEC Enforcement Division, commented:

VimpelCom made massive revenues in Uzbekistan by paying over $100 million to an official with significant influence over top leaders of the Uzbek government. These old-fashioned bribes, hidden through sham contracts and charitable contributions, left the company’s books and records riddled with inaccuracies.

Kara N. Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit, added:

International cooperation among regulators is critical to holding companies responsible for all facets of a bribery scheme.  This closely coordinated settlement is a product of the extraordinary efforts of the SEC, Department of Justice, and law enforcement partners around the globe to jointly pursue those who break the law to win business.