The U.S. Department of Justice (DOJ) on Dec. 21 informed the legal representatives of French aircraft equipment manufacturer Safran that the company would not face prosecution regarding alleged bribes paid by employees to a China-based consultant.
The agency’s declination letter published on its website acknowledged Safran’s cooperation in its investigation and agreement to disgorge more than $17 million in profits allegedly obtained through corrupt means among reasons for its decision. The determination is the second of its kind by the DOJ this year, after the agency in March informed Jardine Lloyd Thompson Group Holdings it would similarly avoid prosecution under the Foreign Corrupt Practices Act (FCPA).
The DOJ said it uncovered violations of the FCPA when representatives of Safran’s U.S. subsidiary Monogram Systems and German subsidiary EVAC GmbH “paid millions of dollars to a China-based business consultant who was a close relative of a then-senior Chinese government official.” The subsidiaries knew the money would be used to bribe the official to obtain train lavatory contracts with the Chinese government, according to the DOJ.
The alleged bribes occurred from approximately 1999 to 2015, prior to Safran acquiring Monogram and EVAC, the DOJ stated. Senior officials at the agency, in announcing new priorities in corporate crime enforcement this year, have noted a desire to give less weight to “dated misconduct” in determinations, most notably when it occurs at a subsidiary prior to its acquisition by a company with a strong compliance program.
Indeed, mitigating factors the DOJ noted regarding its Safran declination included the alleged misconduct occurring pre-acquisition and the company’s identification of the apparent violations through post-acquisition due diligence. Safran voluntarily disclosed its findings to the DOJ, fully cooperated with the agency’s probe, and terminated a remaining employee involved in the alleged scheme, according to the DOJ. Another involved employee no longer with the company had their deferred compensation withheld.
Safran was also given credit for committing to cooperate with German authorities in their ongoing investigation into EVAC. The DOJ agreed to defer to German authorities regarding any further penalties levied against the company.
Representatives for Safran did not respond to a request for comment.
The DOJ noted its declination letter does not provide protection against prosecution for any individuals allegedly involved in the scheme. The agency might reverse its determination if it uncovers any information to change its initial assessment.
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