Sanofi Charged With FCPA Violations

The Securities and Exchange Commission today announced that Paris-based pharmaceutical company Sanofi has agreed to pay more than $25 million to resolve charges that its Kazakhstan and the Middle East subsidiaries made corrupt payments to win business.

According to the SEC’s order, the schemes spanned multiple countries and involved bribe payments to government procurement officials and healthcare providers in order to be awarded tenders and to increase prescriptions of its products. In Kazakhstan, distributors were used as part of a kickback scheme to generate funds from which bribes were paid to officials to ensure that Sanofi was awarded tenders at public institutions. The kickbacks were tracked in internal spreadsheets where they were coded as “marzipans.” In the Middle East, various pay-to-prescribe schemes were used to induce healthcare providers to increase their prescriptions of Sanofi products.

“Bribery in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally,” said Charles Cain, FCPA Unit Chief, SEC Enforcement Division. read more »

Dutch bank ING fined $900 million for failing to spot money laundering

Dutch bank ING Groep NV admitted criminals had been able to launder money through its accounts on Tuesday and agreed to pay 775 million euros ($900 million) to settle the case.

“The shortcomings identified resulted in clients having been able to use their bank accounts for money laundering practices for years”, ING said in a statement, after signing one the largest ever such settlements in the Netherlands.

Dutch financial crime prosecutors said ING had violated laws on preventing money laundering and financing terrorism “structurally and for years” by not properly vetting the beneficial owners of client accounts and by not noticing unusual transactions through them.

ING, the Netherlands’ largest financial services provider, said it was impossible to estimate how much money was laundered through its accounts, but lead prosecutor Margreet Frohberg told Reuters “hundreds of millions of euros” were involved. read more »

The Sound of Corrupt Cash Being Sucked Through Europe

Europe’s national regulators are discovering the limits of their ability to police cross-border money laundering in a complex and globalized financial system that’s full of holes. As incomplete and imperfect as the region’s banking union may be, more supranational oversight and cooperation would help.

The severity and complexity of corruption probes hitting supposedly humdrum, diversified consumer-and-business banks should be a wake-up call. Dutch bank ING Groep NV said on Tuesday it would pay 775 million euros ($895 million) to settle a probe into corrupt practices and unusual payments, including sums sent by VimpelCom Ltd. to a firm owned by an Uzbek government official. ING admitted that clients had been able to launder money through their accounts for years.

Meanwhile, an investigation into allegations that Danske Bank A/S’s Estonian operations were used to launder billions of dollars in illicit funds is nearing its end. As much as $30 billion may have flowed through the Copenhagen-based bank’s Estonian branch in a single year, according to the Financial Times. This would have been only one of many warning signs that went unnoticed between 2007 and 2015. Holding management accountable over goings-on in a small foreign branch has proven tricky. read more »

SocGen expects around $1.4B in US sanctions penalties

France's Societe Generale expects penalties relating to its dispute with U.S. authorities over international sanctions violations to be close to 1.2 billion euros ($1.4 billion) which would almost entirely be covered by provisions.

"Societe Generale expects that the amount of the penalties in the U.S. Sanctions Matter will be almost entirely covered by the provision for disputes allocated to this matter," the bank said in an update released on Monday.

The bank's provisions set aside to cover penalties related to legal disputes totals 1.43 billion euros.

Societe Generale, which has been dogged for more than a year by a series of costly legal disputes, said it expects the issue to be settled within the coming weeks.

The last case that remains to be settled relates to dollar transfers made on behalf of entities based in countries subject to U.S. economic sanctions.

Over 2017 and 2018, the bank has regularly raised the provisions set aside to cover potential losses related to the settlements. However, this is the first time the bank has given an estimate of the amount a settlement may reach. read more »