Search

Editors

Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

« Jorge and Basch: Argentina introduces deferred prosecution agreements, standards for compliance programs | Main | Job: Director of Compliance & Ethics »
Monday
Jan152018

Teva Pharmaceuticals resolves bribery case with Israel authorities

The Office of the Israel’s Tax and Economic Prosecutor announced Monday that it has reached a Conditional Agreement with Teva Pharmaceuticals Industries Ltd. with respect to the bribery issues Teva resolved with U.S. authorities in 2016.

Under the Conditional Agreement, Teva will take responsibility for its actions and pay an administrative fine of 75 million NIS (about $22 million), but no indictment with be filed.

In Teva's U.S. FCPA enforcement action, the company paid total penalties to the DOJ and SEC of $519 million.

Teva is the world’s biggest manufacturer of generic drugs. It committed the FCPA offenses in Ukraine, Mexico, and Russia.

According to the U.S. enforcement action, Teva did business in Russia with a repackaging company owned by an official at the Ministry of Health. The official earned about $65 million through the agreement.

In Ukraine, Teva hired a government official as a consultant and paid him $200,000 through monthly fees and travel.

In Mexico, Teva bribed government doctors.

As part of the U.S. settlement, Teva's Russia subsidiary pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA.

The enforcement action in Israel announced Monday is the second under the foreign bribery statute since its enactment in 2008, and the first in which a Conditional Agreement was used. In the first case, Nikuv International Projects Ltd. or NIP pleaded guilty and paid a fine of 4.5 million NIS (about $1.2 million).

Until now such Conditional Agreements were limited to use in instances of small scale crimes.

The use of a Conditional Agreement in this type of case seems to bring Israel into line with other nations that have recently passed legislation to allow the use of DPAs, though there are still significant differences between a Conditional Agreement and a DPA.

The prosecutors stated several reasons for reaching this seemingly lenient resolution with Teva. These included:

  • The sizable penalties paid to the U.S. authorities
  • Teva’s cooperation in the investigation
  • The remediation undertaken by Teva, including the strengthening of its compliance program
  • Terminating the engagements with the relevant partners and setting up a global management structure to help reduce risk, and
  • The prosecutor's taking into account Teva's recent financial hardships.

The Office of the Israel’s Tax and Economic Prosecutor stated that this resolution best serves the public interests.

____

Chaim Gelfand is a Partner at Shibolet and Co. and head of its Anti-Corruption Compliance Practice -- one of the first (if not the first) dedicated anti-corruption compliance practices in any of Israel's first tier law firms. He has been dealing with anti-corruption compliance in large multinational companies for almost a decade. He can be contacted here.