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.

The details: From at least 2014 to 2017, 3M China provided Chinese government officials overseas travel that included guided tours, shopping visits, day trips to nearby sights, and other leisure activities, according the SEC’s order.

The order alleged 3M China paid nearly $1 million to fund at least 24 trips for Chinese government officials. The officials were employed by Chinese state-owned healthcare facilities and often were induced to purchase 3M products by attending the events, according to the order.

Between February 2016 and September 2018, employees of the subsidiary arranged for 3M to transfer $254,000 directly to a Chinese travel agency to help pay for some of the improper tourism activities, the order alleged.

Compliance considerations: To obtain approval for the trips, 3M China created a travel itinerary for the Chinese government officials and submitted it to compliance personnel at the subsidiary for approval, the order stated.

In collusion with Chinese travel agencies, 3M China employees also created alternate itineraries consisting of tourism activities, which were provided to the Chinese officials, per the SEC.

The government officials were allegedly told to keep the alternate agenda hidden, the order said. Meanwhile, 3M China falsified internal compliance documents that omitted mention of the tourism activities, the SEC alleged.

The SEC noted 3M’s cooperation in self-reporting the violations. The company has since taken remedial steps that include making witnesses available for interviews, producing translations of relevant documents, and sharing facts and updates uncovered during its internal probe.

The company disciplined and terminated employees involved in the misconduct, terminated its relationship with the Chinese travel agencies, and added further enhancements to its internal controls and compliance program, per the order.

3M did not provide comment. The company agreed to the settlement without admitting or denying wrongdoing.