Updated Wednesday, April 23, 2014 as of 3:48 PM ET
Practice - Regulatory/Compliance
ADM Settlement, Market-Rig Jail, Covered Bonds: Compliance
by: Carla Main
Monday, December 23, 2013

(Bloomberg) -- Archer-Daniels-Midland Co. agreed to pay about $54.3 million to U.S. regulators and the Justice Department to resolve allegations it bribed officials in Ukraine to win tax refunds.

ADM paid about $22 million to Ukranian government administrators in order to obtain more than $100 million in value-added tax refunds in violation of U.S. anti-bribery laws, the SEC said Dec. 20 in a complaint filed with the proposed settlement in federal court in Urbana, Illinois. The agreement must be approved by a federal judge.

An ADM unit in the Ukraine also pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act while ADM entered into a non-prosecution agreement with the Justice Department.

ADM units in Hamburg and Ukraine allegedly made the payments to third-party vendors from 2002 to 2008 and improperly recorded them on their financial statements in violation of the books and records provisions of the FCPA, according to the complaint. The units reaped about $41 million in benefits from the refunds, according to a Justice Department statement.

In order to disguise the payments, the ADM units logged the transactions as “export-related services and insurance premiums to third parties,” the SEC said.

Under the agreements, ADM will pay about $36.5 million to the SEC and $17.8 million in criminal fines to the Justice Department.

ADM reported the conduct to authorities in 2009, fired employees who were involved and put in place new compliance measures, ADM Chairman and Chief Executive Officer Patricia Woertz said in a statement.

“The conduct that led to this settlement was regrettable, but I believe we handled our response in the right way, and that the steps we took, including self-reporting, underscore our commitment to conducting business ethically and responsibly,” Woertz said.

Compliance Policy

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