LAN AIRLINES SA SETTLES FCPA CASE FOR $22 MILLION

August 4, 2016

South American airline LAN Airlines SA and the U.S. Department of Justice recently agreed to a $22 million settlement concerning allegations that the airline violated the Foreign Corrupt Practices Act (FCPA) by facilitating bribes to certain officials during a labor dispute.

The FCPA generally prohibits (1) giving “anything of value;” (2) to a foreign government official;

(3) to influence that official to assist in “obtaining or retaining business.”  “Anything of value” is defined broadly for the purposes of the FCPA and includes both tangible benefits (i.e., cash, gifts) and intangible benefits (i.e., employment, business opportunities). “Foreign government officials” include officers or employees of a department, agency, or instrumentality of a foreign government. In order to violate the FCPA, a defendant must act “corruptly,” with an intent to wrongfully influence the recipient and the penalties for non-compliance can be quite severe.

Here, the settlement included a $12.75 million penalty as part of a deferred prosecution agreement and a $9.4 million disgorgement and interest to the U.S. Securities and Exchange Commission, without an admission or denial of charges that its CEO approved payments to an Argentine government official in 2006 who funneled the money to Argentine labor union officials in exchange for the union accepting lower wages.

Please let us know if you have any questions or would like us to review your company’s FCPA compliance policies or offer advice on “best practices” for complying with the applicable regulations.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).

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