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Thursday
Dec112014

German prosecutor fines Rheinmetall $46 million for Greek bribes

German auto parts maker and defense contractor Rheinmetall AG said in a statement Wednesday that a subsidiary agreed to pay a fine of €37 million ($46 million) to resolve a criminal investigation of alleged bribes in connection with arms sales in Greece.

The senior prosecutor in the German city of Bremen imposed the penalty on Rheinmetall Defence Electronics GmbH (RDE).

RDE is based in Bremen.

Rheinmetall said RDE was accused of "failing to detect and prevent suspicious payments to sales partners due to inadequate internal controls."

Headquartered in Düsseldorf, Rheinmetall AG has about 21,000 employees. Revenues last year were €4.7 billion ($5.8 billion). Its defense business makes tracked and wheeled military vehicles.

Rheinmetall AG trades on the XETRA exchange in Germany under the symbol RHM.

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Here's Rheinmetall's full statement:

Rheinmetall Defence Electronics GmbH (RDE), a Bremen-based subsidiary of Rheinmetall AG, [] accepted a fine imposed by the senior prosecutor in Bremen. The decision comes in the wake of a meeting of the Executive and the Supervisory Board of Rheinmetall AG. This brings to an end criminal proceedings relating to the allegation that unauthorized payments were made during arms deals in Greece by a representative of the company in that country. During the legal proceedings, RDE was accused of failing to detect and prevent suspicious payments to sales partners due to inadequate internal controls. The total fine amounts to €37.07 million. The portion of this amount allocated to the confiscation of profits, which can be applied towards tax, comes to €36.77 million.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.