Thursday, December 20, 2007
The SEC has settled another FCPA case involving kickbacks made under the U.N. Oil for Food Program. The SEC filed books and records and internal controls charges against Akzo Nobel N.V., a Netherlands-based pharmaceutical company, alleging that from 2000 to 2003, two of Akzo Nobel's subsidiaries authorized and made $279,491 in kickback payments in connection with their sales of humanitarian goods to Iraq under the U.N. Oil for Food Program (the "Program"). The kickbacks were characterized as "after-sales service fees" ("ASSFs"), but no bona fide services were performed. The kickbacks paid in connection with Akzo Nobel's subsidiaries' sales to Iraq bypassed the escrow account and were paid by third parties to Iraqi-controlled accounts in Lebanon and Jordan.
Akzo Nobel consented to the entry of a final judgment permanently enjoining it from future violations and agreed to disgorge $1,647,363 in profits, plus $584,150 in pre-judgment interest, and to pay a civil penalty of $750,000. The SEC stated that it took the company's prompt remedial acts into account.