One of the world’s largest telecommunications companies in the world and its subsidiaries have reportedly agreed to pay fines as well as forfeitures to the United States and Dutch governments. The settlement agreed to by VimpelCom is said to total more than $800 million and will apparently put an end to a long running bribery investigation and scheme that reached into the upper echelon of the Uzbekistan government.
U.S.A Today reports Manhattan U.S. Attorney Preet Bharara claimed that Vimpelcom (News - Alert) had been using its Uzbek subsidiary to basically set up a business model that relied on bribery. The U.S. justice department claims more than $114 million in bribes was funneled through Uzbekistan over a six year period. The companies were able to hide their misdeeds by sending various payments to a shell company that a number of Vimpelcom and Unitel, the firm’s subsidiary knew were owned by the person who was receiving the bribes.
The U.S. and Dutch authorities issued a statement that went along with the agreement that said in part, "The bribes were paid on multiple occasions between approximately 2006 and 2012 so that VimpelCom could enter the Uzbek market and Unitel could gain valuable telecom assets and continue operating in Uzbekistan.’”
While the $800 million in fines and forfeitures sounds like a large total to be paid to the U.S. and Dutch officials, the United States was originally looking to collect as much as $1 billion on its own. That high price tag (News - Alert), as well as the fact that VimpelCom had basically been caught dead to rights, seem to have convinced the firm to cut this deal in order to save itself at least $200 million.
This is a big win in a number of different ways because this is one of the biggest efforts to recover proceeds from a foreign government official in the United States. The U.S. was able to seek the fees thanks to the Foreign Corrupt Practices Act.
Edited by Rory J. Thompson