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FCPA Blog Daily News

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Monday
May052014

Embraer updates FCPA disclosure

Image courtesy of Embraer SABrazilian aircraft maker Embraer SA said last week its four-year FCPA investigation is still ongoing and the company can't predict the outcome.

The investigation first focused on three unnamed countries but later expanded.

The SEC issued a subpoena in 2010 and the DOJ also joined the probe.

Embraer said "there is no basis for estimating reserves or quantifying any possible [settlement] contingency at this time."

Embraer SA, the world's third largest commercial aircraft manufacturer, trades on the NYSE under the symbol ERJ.

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Here's the full FCPA disclosure from Embraer Form 6-K (Report of Foreign Private Issuer) filed with the SEC on April 30:

The Company received a subpoena from the SEC in September, 2010, which inquired about certain operations concerning sales of aircraft abroad. In response to this SEC issued subpoena and associated inquiries into the possibility of non-compliance with the U.S. Foreign Corrupt Practices Act, the Company retained outside counsel to conduct an internal investigation on transactions carried out in three specific countries.

Since then, in response to additional information, the Company has voluntarily expanded the scope of the internal investigation to include sales in additional countries and has reported on those matters to the SEC and the U.S. Department of Justice. The internal investigation and related government inquiries concerning these matters remain ongoing. The Company will continue to respond to any additional information and cooperate with the SEC, DOJ and other relevant authorities, as circumstances warrant.

The Company, with the support of its outside counsel, has concluded that it is still not possible to estimate the duration, scope or results of the internal investigation or related inquiries by relevant authorities. In the event that the authorities take action against the Company with respect to these or any related matters that may arise in the future, or the Company enters into an agreement to settle such matters, the Company may be required to pay substantial fines and/or to incur other sanctions or liabilities.

The Company, based upon the opinion of its outside counsel, believes that there is no basis for estimating reserves or quantifying any possible contingency at this time.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.