A most “daring act” seems to be a good way to introduce a multipart look at the recent Foreign Corrupt Practices Act enforcement action involving the Chilean chemicals and mining company Sociedad Química y Minera de Chile (SQM), which agreed to pay a criminal penalty of $15.5 million and a civil penalty of $15 million for a total fine and penalty of $30.5 million. The company settled with the Department of Justice via a Criminal Information and Deferred Prosecution Agreement (DPA) and the Securities and Exchange Commission via a Cease and Desist Order (Order).
There were a couple of unusual aspects to this matter that bear review and consideration by a compliance practitioner, particularly for those with companies headquartered or domiciled outside the United States. The first is that the case was rare for its criminal violations of the FCPA for the accounting provisions—both the books and records and internal controls provisions. The second was that the company’s illegal actions appeared to have no U.S. nexus to the conduct involved, seeing as the jurisdictional hook was that the company’s shares trade on the New York Stock Exchange (NYSE) as American Depository Receipts (ADRs) and the company is required to file periodic reports with the SEC. There were, however, some excellent points for review by any compliance practitioner regarding the underlying conduct involved.
