Telia tops our new Top Ten list (after we do some math)
Friday, September 22, 2017 at 7:28AM
Richard L. Cassin in TeliaSonera, Top Ten

Sweden's Telia Company AB agreed Thursday with the DOJ and SEC to pay total penalties of $965 million to resolve FCPA offenses in Uzbekistan.

Prior to Thursday, the biggest FCPA settlement on record was Siemens' $800 million resolution in 2008, when it paid the DOJ $450 million in criminal penalties and the SEC $350 million in disgorgement.

So Telia's $965 million settlement is the new biggest FCPA case ever, right?

Well . . . . .

The total penalties specified by the DOJ and SEC in official documents (the DOJ's deferred prosecution agreement filed with the federal court, and the SEC's internal administrative order) added up to $965 million.

That amount consists of $548.6 million in criminal penalties to the DOJ and $457 million in disgorgement to the SEC. That adds up to about $1.005 billion. But $40 million of the disgorgement is being offset by a forfeiture to the DOJ, so the total amount of penalties is $965.6 million.

But . . . .

Telia's DPA said said the total criminal penalty "will be offset by up to [about $274 million] for any criminal penalties paid" to the Dutch Public Prosecution Service to settle the potential prosecution in the Netherlands.

Confirming that, Telia said Thursday the criminal fine will be paid "in equal parts" to the DOJ and Dutch prosecutors.

That means the criminal penalties actually paid to the DOJ could fall from $548.6 million to $274.3 million.

Similarly, Thursday's SEC order said Telia's disgorgement obligation "shall be deemed satisfied in part" by any confiscation or forfeiture payment of up to $208.5 million made by Telia to Swedish or Dutch prosecutors.

That means the disgorgement actually paid to the SEC could fall from $457 million (before the $40 million offset to the DOJ) to $298.5 million.

So . . . . .

What all that means is that Telia could end up paying the DOJ and SEC a combined total of $572.8 million.

At $572.8 million, Telia's FCPA enforcement action would land fourth on our list of the ten biggest FCPA cases of all time.

But because the DOJ and SEC specified total combined penalties of $965 million for the FCPA settlement, with a chunk of that by agreement of the parties potentially going to Dutch and Swedish prosecutors, then it makes sense to rank the enforcement action based on the total combined penalty amount of $965 million.

(That's consistent with how we accounted for the Odebrecht / Braskem FCPA enforcement action, which also allowed for offsets against payments to authorities in Brazil and Switzerland, and for VimpelCom, where some SEC-ordered disgorgement was paybable to the Netherlands.)

So for now, let's use $965 million as Telia's total combined FCPA settlement amount.

*    *    *

On that basis, here then are the current top ten FCPA enforcement actions of all time:

1. Telia Company AB (Sweden): $965 million in 2017.

2.  Siemens (Germany): $800 million in 2008.

3.  VimpelCom (Holland) $795 million in 2016.

4. Alstom (France): $772 million in 2014.

5.  KBR / Halliburton (United States): $579 million in 2009.

6.  Teva Pharmaceutical (Israel): $519 million in 2016.

7.  Och-Ziff (United States): $412 million in 2016.

8.  BAE (UK): $400 million in 2010.

9.  Total SA (France) $398 million in 2013.

10.  Alcoa (United States) $384 million in 2014.

Falling off the list is Snamprogetti Netherlands B.V. / ENI S.p.A, which paid $365 million in 2010.

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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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