Bridgestone Agrees to Pay $28M Fine for FCPA Violations
The Justice Department has announced that Bridgestone Corporation has agreed to plead guilty and to pay a $28 million criminal fine for its role in conspiracies to make corrupt payments to foreign government officials in Latin America related to the sale of marine hose and other industrial products, in violation of the Foreign Corrupt Practices Act, and other charges.
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(Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities.)
Charged with Fixing Prices, Bribing Officials in Latin American Countries, Etc.
According to court documents, from as early as January 1999, and continuing until as late as May 2007, Bridgestone conspired to rig bids, fix prices and allocate market shares of marine hose in the U.S. and elsewhere and, separately, conspired to make corrupt payments to government officials in various Latin American countries to obtain and retain business.
Authorized Corrupt Payments to Foreign Officials at State Owned Entities
Regarding the FCPA violation, the Justice Department (DOJ) charged that, in order to secure sales of marine hose in Latin America, Bridgestone authorized and approved corrupt payments to foreign government officials employed at state-owned entities. Bridgestone’s local sales agents agreed to pay employees of state-owned customers a percentage of the total value of proposed sales.
When Bridgestone secured a sale, it would pay the local sales agent a “commission” consisting of not only the local sales agent’s actual commission but also the corrupt payments to be made to employees of the state-owned customer. The local sales agent then was responsible for passing the agreed-upon corrupt payment to the employees of the customer.
Bridgestone Agreed to Pay $28M Criminal Fine, Cooperate in DOJ Investigations
Bridgestone has agreed to plead guilty and to pay a $28 million criminal fine. Under the terms of the plea agreement, which is subject to court approval, Bridgestone has also agreed to cooperate fully in the DOJ's ongoing investigations.
But DOJ Agreed to Recommend a Substantially Reduced Fine
Under the plea agreement, DOJ recognized Bridgestone’s cooperation with the investigations, including conducting a worldwide internal investigation, voluntarily making employees available for interviews, and collecting, analyzing and providing to DOJ voluminous evidence and information. In addition, the plea agreement acknowledges Bridgestone’s extensive remediation, including restructuring the relevant part of its business, terminating many of its third-party agents and taking remedial actions with respect to employees responsible for many of the corrupt payments. Under the terms of the plea agreement, Bridgestone has also committed to continuing to enhance its compliance program and internal controls.
As a result of these mitigating factors, the DOJ agreed to recommend a substantially reduced fine.