SAP Paying $220 Million to Resolve Bribery Charges

SAP will pay more than $220 million to resolve bribery charges in connection with investigations by the U.S. Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA).

SAP’s resolution 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.

According to court documents, SAP entered into a three-year deferred prosecution agreement (DPA) with the Department in connection with a criminal document filed in the Eastern District of Virginia charging the company with two counts. Those are conspiracy to violate the anti-bribery, 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 Argentieri of the 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.”

Related:SAP Triggers Concern Among On-Premise Customers

SAP Comments on Bribery Charges, Investigations

SAP sent us the following statement:

“SAP fully cooperated with the authorities, and these settlements close all compliance matters under investigation in the United States and South Africa. The company separated from all responsible parties more than five years ago. The past conduct of certain former colleagues and former partners does not reflect SAP’s values or our commitment to ethical behavior. SAP has made significant enhancements to our compliance program and internal controls over the past few years. Indeed, both the U.S. and South African authorities specifically highlighted SAP’s strong remediation, robust controls and compliance enhancements. As stated clearly in our global code of ethics and business conduct for employees, SAP has zero tolerance for non-compliance and is committed to doing business the right way in all markets where we operate.”

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 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, according to the department.

In addition, between approximately 2015 and 2018, SAP engaged in a scheme to bribe Indonesian officials to obtain improper business advantages for SAP in connection with various contracts between and among SAP and Indonesian departments, agencies and instrumentalities. 

Payments SAP Will Make

According to the DPA, SAP will pay a criminal penalty of $118.8 million and administrative forfeiture of nearly $103.4 million. 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.

SAP’s compliance obligations include a commitment to implementing criteria relating to compliance in the company’s compensation and bonus system, subject to local labor laws. The Department reduced the criminal penalty by more than $109,000 for compensation that SAP withheld from qualifying employees, which the company defended in substantial litigation.