Telia agrees to pay $548.6 million criminal fine for FCPA violations
Thursday, September 21, 2017 at 12:18PM
Richard L. Cassin in Gulnara Karimova, TeliaSonera, Uzbekistan

Swedish telephone firm Telia Company AB agreed Thursday to pay $548.6 million in criminal penalties to resolve FCPA offenses in Uzbekistan.

An Uzbek subsidiary, Coscom LLC, agreed separately to plead guilty.

The DOJ filed a criminal information (charging document) in federal court in Manhattan Thursday charging Telia with to one count of conspiracy to violate the FCPA .

The DOJ also filed a three-year deferred prosecution agreement with Telia. 

A federal judge would still need to approve the plea deal.

The DPA said Telia is paying a total criminal penalty of $548.6 million.

Of that amount, $500 million is a criminal fine and $40 million "will be paid as forfeiture by [Telia] on behalf of its Uzbek subsidiary, Coscom LLC, as part of the subsidiary’s guilty plea."

The DPA also said the total criminal penalty "will be offest by up to [$274 million] for any criminal penalties paid" to the Dutch Public Prosecution Service to settle the potential prosecution in the Netherlands.

In a statement Thursday on its website, Telia said:

The information being reported by media about the terms of the resolution is not complete. Telia Company has already announced that it has taken a provision with respect to the expected financial sanctions. It is correct that we are very close to a final resolution with all authorities (SEC, DOJ and the Dutch prosecutor), but cannot comment further at this time.

The statement could indicate that Telia's total penalties will be more than $548.6 million.

At our press time (Thursday 12:18 pm), the DOJ had not issued a release and there was no statement from the SEC or Dutch authorities.

Telia was formerly known as TeliaSonera. The governments of Sweden and Finland are the biggest shareholders.

Its shares are listed on the Nasdaq Stockholm and on the Nasdaq Helsinki stock exchanges, according to its website. It doesn't file periodic reports with the SEC.

The company said in April it had adjusted its "estimate of the most likely outcome of the ongoing investigations into the company’s market entry and operations in Uzbekistan to $1 billion from $1.45 billion.

A settlement of $548.6 million would land Telia fourth on the FCPA Blog's list of the biggest FCPA enforcement actions. The biggest FCPA case is Siemens' $800 million resolution in 2008.

The DOJ said Thursday that Telia, Coscom, and a high-ranking Telia executive conspired to pay an Uzbek government official $331.2 million in bribes in exchange for help expanding their share of Uzbekistan’s telecommunications market.

The payments were made from 2007 to 2010.

In February this year, Amsterdam-based VimpelCom paid $795 million to resolve U.S. and Dutch charges of bribing an Uzbek official.

Last year the DOJ filed civil forfeiture actions to recover nearly $1 billion in bribe money that VimpelCom, MTS of Russia, and Telia allegedly paid to Gulnara Karimova, the eldest daughter of the late Uzbek President Islam Karimov.

Karimova, 45, has been under house arrest in the Uzbek capital of Tashkent for corruption since September 2014.

The DOJ won a federal court order in 2015 to impound $300 million in bank accounts linked to Karimova. The accounts were held by Bank of New York Mellon Corp. in Ireland, Luxembourg, and Belgium, and in accounts at Clearstream Banking SA.

In 2014, prosecutors in Switzerland seized about $820 million as part of a money-laundering investigation into Karimova.He said the company believes it is "approaching the end of these investigations."

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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