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Australian Company Fined $25 Million To Settle Claims It Violated the Foreign Corrupt Practices Act

You might wonder why, as was announced on May 20, 2015, an Australian mining giant, BHP Billiton, agreed to pay a $25 million penalty to settle charges levied by a U.S. government agency, the Securities and Exchange Commission (SEC), for violating a U.S. federal statute, the Foreign Corrupt Practices Act (FCPA). After all, an allegation that an Australian company made payments for foreign government officials to attend the Beijing Olympics in 2008 does not sound like something the SEC would normally be interested in, let alone have jurisdiction to address.
However, the FCPA, whose anti-bribery provisions expressly prohibit payments to foreign officials to obtain or retain business, applies not only to “domestic concerns” such as U.S. persons and businesses, but also to “Issuers,” which include U.S. and foreign public companies listed on U.S. stock exchanges.
Which is why BHP Bulliton, which is listed on the New York Stock Exchange and provided the raw metals used to make the Beijing Olympics medals, found itself under the scrutiny of the SEC when an investigation that was started in 2009 and continues in Australia revealed that the company invited 176 government officials and employees of state-owned enterprises to attend the Games at the company’s expense, and ultimately paid for 60 such guests as well as some spouses and others who attended along with them.
Sponsored guests, primarily from countries in Africa and Asia, including China, were government officials connected to pending contract negotiations or regulatory dealings such as the company’s efforts to obtain access rights. They enjoyed three- and four-day hospitality packages that included event tickets, luxury hotel accommodations, and sightseeing excursions valued at $12,000 to $16,000 per package.
“BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “BHP Billiton recognized that inviting government officials to the Olympics created a heightened risk of violating anti-corruption laws, yet the company failed to implement sufficient internal controls to address that heightened risk.”
Although the company put some internal controls in place for its Beijing Olympics sponsorship, it failed to provide employees with anti-bribery training about the invitations or how to evaluate bribery risks of the invitations.
BHP Billiton neither admitted nor denied the SEC’s findings. The settlement requires the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for one year.
Under Federal law, individuals who report fraud to the government, such as a violation of anti-corruption statutes such as the FCPA, can be entitled to monetary awards. If you are aware of wrongdoing and would like to know more about your rights, please click here.

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