On December 15, German engineering company Siemens AG and three of its subsidiaries pleaded guilty to multiple violations of the Foreign Corrupt Practices Act (FCPA). Siemens also reached a settlement agreement with the Securities and Exchange Commission (SEC) under which Siemens will pay a record $800 million (a $450 million criminal fine and $350 million in disgorgement of profits ) and retain an independent compliance monitor for a four-year term. Combined with penalties levied by the German government, Siemens will pay a total of $1.6 billion to settle the bribery charges. That’s no typo: $1.6 billion. That’s a Dr. Evil ransom.
What did Siemens allegedly do that was so bad? According to the U.S. Attorney General’s office, among other things, Siemens paid over $800 million in bribes to foreign officials. Perhaps Siemens didn’t realize that the FCPA makes it illegal to bribe a foreign official to get business. The FCPA also requires issuers (companies whose stocks trade on U.S. exchanges) to have internal controls and to maintain accurate books and records.
Want to avoid ending up paying $1.6 billion to settle a case? The U.S. Department of Justice has published this handy Layperson’s Guide to the FCPA. If you do business overseas, be sure that your employees are trained on the FCPA and understand the limitations it places on their actions abroad.