Colombian conglomerate and subsidiary pay $80.8 million to settle FCPA offenses

Corficolombiana conglomerate and subsidiary pay $80.8 million to settle FCPA offenses | The Enterprise World

Rupo Aval Acciones y Valores S.A. and its banking subsidiary reached a settlement on Thursday to pay $80.8 million in disgorgement and penalties to the DOJ and SEC to resolve FCPA violations relating to a toll road project in Colombia.

Corporación Financiera Colombiana S.A. (Corficolombiana), a division of the conglomerate with its headquarters in Bogotá, entered into a three-year deferred prosecution agreement with the Department of Justice and paid a $40.6 million criminal fine.

As long as Corficolombiana and Episol give up their appeals of the SIC resolution, the DOJ said it agreed to credit up to half of that criminal penalty against money that Corficolombiana and its subsidiary, Estudios y Proyectos del Sol S.A.S. (Episol), paid to Colombia’s Superintendencia de Industria y Comercio (SIC) for violations of Colombian laws related to the conduct.

Pay approximately $40.3 million

The SEC accused Grupo Aval and Corficolombiana of breaking the FCPA’s accounting rules, and Corficolombiana of breaking the FCPA’s anti-bribery rules, in an internal administrative order. Grupo Aval and Corficolombiana consented to pay approximately $40.3 million in disgorgement and prejudgment interest as part of the SEC settlement. The SEC did not levy any more fines.

The DOJ claims that Corficolombiana conspired with an executive of the Brazilian construction giant Odebrecht between 2012 and 2015 to offer and pay more than $23 million in bribes to senior Colombian government officials in order to secure a contract to build and run a highway toll road project.

Before the Colombian government officials authorized the expanded financial requirements for the toll road project in May 2014, an Odebrecht executive agreed to give further bribes to Colombian government officials “in the form of illicit campaign contributions,” the SEC claimed.

According to the DOJ, Corficolombiana profited $28.6 million from the bribery.

Corficolombiana consented to the settlement by continuing its cooperation with the DOJ, improving its compliance program, and submitting regular updates to the DOJ on remediation and the execution of compliance measures throughout the duration of the DPA.

Engaged in extensive remedial measures

In a massive overseas bribery scheme, “Corficolombiana has acknowledged its role, and for that, it is being held accountable,” a DOJ official said on Thursday.

According to the DOJ, the company immediately engaged in extensive remedial measures, including conducting a root cause analysis of the conduct discovered during internal investigations and swiftly taking actions to improve its corporate governance and controls, overhauling its compliance program, and enhancing its third-party intermediary risk management process, among other things. As a result, the company’s settlement on Thursday reflects a 30 percent reduction off the U.S. Sentencing Guidelines.

The United States, Brazil, and Switzerland recently reached a $3.5 billion worldwide bribery resolution with Brazil’s Odebrecht, now known as Novonor. In order to gain business, the corporation paid bribes totaling around $788 million to political parties and government figures in at least a dozen different nations.          

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