SEC orders 3M to pay $6.6M over FCPA violations in China

The Securities and Exchange Commission (SEC) ordered multinational conglomerate 3M to pay nearly $6.6 million for alleged violations of the Foreign Corrupt Practices Act (FCPA) regarding hidden travel perks its foreign subsidiary made to government officials in China.

The agency charged 3M and its subsidiary, 3M China, with violating the books and records and internal controls provisions of the FCPA, according to a press release Friday. The company agreed to cease and desist from further violations and pay disgorgement plus prejudgment interest totaling nearly $4.6 million and a $2 million civil penalty, the SEC said.

The SEC alleged 3M China improperly recorded legitimate business expenses and consolidated them into its books and records and failed to maintain an adequate system of internal accounting controls over the cross-border transfer of funds to vendors.