- SAP will pay over $220 million to resolve investigations by the U.S. Justice Department and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA).
- SAP’s resolution with the department stems from schemes to pay bribes to government officials in South Africa and Indonesia.
- The department’s resolution is coordinated with prosecutorial authorities in South Africa, as well as with the SEC and includes bribes paid for business at South Africa’s state owned energy utility, Eskom.
According to court documents, SAP entered into a three-year deferred prosecution agreement (DPA) with the department in connection with a criminal information filed in the Eastern District of Virginia charging the company with two counts: conspiracy to violate the anti-bribery and books and records provisions of the FCPA relating to its scheme to pay bribes to South African officials, and conspiracy to violate the anti-bribery provision of the FCPA for its scheme to pay bribes to Indonesian officials.
“SAP paid bribes to officials at state-owned enterprises in South Africa and Indonesia to obtain valuable government business,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Today’s resolution—our second coordinated resolution with South African authorities in just over a year—marks an important moment in our ongoing fight against foreign bribery and corruption. We look forward to continuing to strengthen our relationship with South African authorities and others around the world. This case demonstrates not only the critical importance of coordinated international efforts to combat corruption, but also how our corporate enforcement policies incentivize companies to be good corporate citizens, by cooperating with our investigations and appropriately remediating, so that we can take strong action to address misconduct.”
“SAP has accepted responsibility for corrupt practices that hurt honest businesses engaging in global commerce,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “We will continue to vigorously prosecute bribery cases to protect domestic companies that follow the law while participating in the international marketplace.”
According to court documents, SAP and its co-conspirators made bribe payments and provided other things of value intended for the benefit of South African and Indonesian foreign officials, delivering money in the form of cash payments, political contributions, and wire and other electronic transfers, along with luxury goods purchased during shopping trips. Specifically, with respect to South Africa, between approximately 2013 and 2017, SAP, through certain of its agents, engaged in a scheme to bribe South African officials and to falsify SAP’s books, records, and accounts, all with the goal of obtaining improper advantages for SAP in connection with various contracts with South African departments, agencies, and instrumentalities, including the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation (a South African state-owned and state-controlled custodian of water services), and Eskom Holdings Limited (a South African state-owned and state-controlled energy company).
Pursuant to the DPA, SAP will pay a criminal penalty of $118.8 million and administrative forfeiture of $103,396,765. SAP will also continue cooperating with the department in any ongoing or future criminal investigation arising during the term of the DPA. In addition, the department will credit up to $55.1 million of the criminal penalty against amounts that SAP pays to resolve an investigation by law enforcement authorities in South Africa for related conduct. The department will credit up to the full forfeiture amount against disgorgement that SAP pays to the SEC or South African authorities.
The Justice Department’s Office of International Affairs and authorities in South Africa provided assistance in this matter.
Author: Bryan Groenendaal