Settlements

ST-39
Alstom S.A. / Alstom Network Schweiz AG and other Swiss subsidiaries
Alstom S.A.
Switzerland
Office of the Attorney General
Latvia, Malaysia, Tunisia
2011
11/22
World Bank
Legal Person
Criminal
Summary Punishment Order
Criminal Fine, Confiscation of Profits, Legal Costs
$42,485,594.00
$2,723,790
$39,658,300
$103,504
$0
Art.16, Art.23, Art.26
Art. 1, Art. 2, Art. 7, Art. 8, Art. 9
Bribery of foreign officials, Not take all necessary and reasonable organizational precautions to prevent bribery of foreign officials in the course of its business operations (Art. 102 Section 2 Swiss Criminal Code in conjunction with Art. 322 of the Swiss Criminal Code)
Bribery of foreign officials, Not take all necessary and reasonable organizational precautions to prevent bribery of foreign officials in the course of its business operations (Art. 102 Section 2 Swiss Criminal Code in conjunction with Art. 322 of the Swiss Criminal Code)
Yes
According to the Summary Punishment Order of the Office of the Swiss Attorney General, dated November 22, 2011, "In complete disregard of the internal provisions [for selecting and using consultants] . . . the Defendant [Alstom] through its representatives signed consultancy agreements with pure offshore and shell companies in the cases relevant to the current proceedings. [ ] The fact that payments were carried out and made by the Defendant on the basis of such consultancy agreements into the accounts of offshore and shell companies both nationally and abroad, i.e. into accounts located outside the project country, meant that there was a higher risk, as a matter of principle not tolerated by internal guidelines, that such payments could be used for bribery or for other illegal purposes." (Source: Summary Punishment Order at para 10.) According to the Summary Punishment Order, this misconduct continued after active foreign bribery sanctions entered into effect, and "It must be held in the OAG's [Office of the Attorney General's] consideration that the company did not take all necessary and reasonable precautions to prevent the bribery of foreign public officials, as a result of which bribery of foreign public officials did in fact occur in three cases." (Source: Summary Punishment Order at para 11.) (1) In Latvia, from 2006 onwards, bribe payments were funnelled to legal entities SIA Energy Consulting (Latvia) and Kenmore OU (Estonia) controlled by Andrejs Livanovics, a former Alstom business development manager for the Baltics but the beneficiaries of the success fees were executives of the state owned company LATVENERGO AS who were decisively involved in decisions related to awarding contracts; (2) in Tunisia, "consultancy" payments to companies controlled by Slim CHIBOUB, a son-in-law of the former President of Tunisia; the companies were Roserton Overseas SA (Panama) and Dalmel Trading, Inc. (BVI); and (3) in Malaysia, in connection with the state-licensed Teknologi Tenaga Perlis Consortium Sdtn Bhd, Alstom companies were used as intermediary companies for "consulting agreements" for which the beneficiaries were TTPC executives Chee Liang TI and Abdul Hamid PAWANTEH (latter was also a local politician in the constituent state of Perlis where the power station was to be built). The involved Alstom companies were: in Latvia - Alstom Power Sweden AB and Alstom Hydro Sweden AB; in Tunisia - Alstom Power Centrales; in Malaysia - Alstom Schweiz AG and Alstom power O&M AG. Alstom was fined CHF 2.5 million; compensatory claim of CHF 36.4 million; and CHF 95,217,70 in procedural fees. (Source: Office of the Swiss Attorney General, Summary Punishment Order, in the Investigation of Alstom Network Schweiz AG, November 22, 2011.) According to a statement by Alstom, the Swiss Attorney General issued a dismissal order regarding any other proceedings against Alstom; and the company decided not to challenge the decision of the Attorney General. (Source: Alstom Company Statement, "The Swiss Office of Attorney General confirms the absence of any bribery system at Alstom. It fines the company for 'corporate negligence' in three isolated cases," November 22, 2011.)