Sweden-based telecommunications provider Telia Company AB and its Uzbek subsidiary, Coscom, will pay $965 million in total penalties in a global settlement to resolve corruption charges arising out of a scheme to win business in Uzbekistan.
Acting U.S. Attorney Joon Kim of the Southern District of New York said it is “one of the largest criminal corporate bribery and corruption resolutions ever.”
The U.S. Securities and Exchange Commission and the Public Prosecution Service of the Netherlands (Openbaar Ministrie, or OM) announced separate settlements with Telia in connection with related proceedings. According to the SEC order, Telia entered the Uzbek telecommunications market by offering and paying at least $330 million in bribes to a shell company under the guise of payments for lobbying and consulting services that never actually occurred. The shell company was controlled by an Uzbek government official who was a family member of the President of Uzbekistan and in a position to exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan.
Telia consented to the SEC’s order, requiring the company to pay $457 million in disgorgement. The company also agreed to pay a criminal fine of more than $508 million imposed by the Department of Justice.
Justice Department resolution. The Justice Department said it considered a number of significant factors in its criminal resolution with Telia and Coscom. Among these, the companies received significant credit for their extensive remedial measures and cooperation with the Department’s investigation. Specifically, the criminal penalty reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range.
However, the companies did not receive more significant mitigation credit, either in the penalty or the form of resolution, because the companies did not voluntarily self-disclose their misconduct, the Department stated.
Telia entered into a deferred prosecution agreement in connection with a criminal information filed this week in the Southern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to U.S. District Judge George Daniels. Telia also agreed to implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals.
The Department of Justice agreed to credit the criminal penalty paid to the OM as part of its agreement with the company, and the SEC agreed to credit the $40 million in forfeiture paid to the Justice Department as part of its agreement with the company. Thus, the combined total amount of criminal and regulatory penalties paid by Telia and Coscom to U.S., Dutch, and Swedish authorities will be $965,773,949.
Similar actions. The global resolution marks the second such resolution by a major international telecommunciations provider for bribery in Uzbekistan. In February 2016, Amsterdam-based VimpelCom and its Uzbek subsidiary, Unitel, also entered into resolutions with the Justice Department and admitted to a conspiracy to make more than $114 million in bribery payments to the same Uzbek government official between 2006 and 2012. The investigation has, thus far, yielded a combined total of over $1.76 billion in global fines and disgorgement, including over $500 million in criminal penalties to the Justice Department.
In related actions, the Justice Department has also filed civil complaints seeking the forfeiture of more than $850 million held in bank accounts in Switzerland, Belgium, Luxembourg, and Ireland, which constitute bribe payments made by VimpelCom, Telia, and a third telecommunications company, or funds involved in the laundering of those corrupt payments, to the Uzbek official.