Panalpina to Pay $82 Million in Penalties For Bribery

Panalpina will pay $81.9 million in fines and penalties to settle charges in the United States that it violated bribery laws, capping a case that led to management changes at one of the world's largest freight forwarders. 

The Switzerland-based company announced the settlement, which is subject to court approval, on Friday. The case grew out of an investigation by the U.S. Department of Justice and U.S. Securities and Exchange Commission for violations of the U.S. Foreign Corrupt Practices Act. 

As part of the settlement, Panalpina will plead guilty plea to violating accounting provisions of the FCPA and pay a fine of $70.6 million in four installments. Panalpina will also consent to a final judgment in a civil action brought by the SEC alleging violations of the FCPA's anti-bribery and accounting requirements and will pay $11.3 million from profits.

Panalpina news from JOC:
Panalpina Revenue, Profit Jump.

Panalpina was among six international forwarders who agreed to a total of $50.3 million in criminal fines after pleading guilty to air cargo price fixing in September.

Panalpina may be the first forwarder to pay a penalty under recently increased enforcement of the FCPA as applied to non-U.S. companies and non-U.S. persons. There have been record corporate fines for non-forwarders, individual criminal charges and jail sentences under the FCPA in the last year.

In July 2007, the Justice Department's criminal fraud unit made known its concerns about alleged payments to Nigerian customs agents made by Panalpina. The SEC also launched a related civil investigation.

The company lost millions in profits and spent another $15 million-plus on legal and consulting fees. The company has replaced some members of its executive management since the investigation began and says it has implemented new procedures in its financial units to ensure accountability. 

"Nigeria has long been known for its corrupt practices," attorneys Joseph P. Covington and Jessica Tillipman with the Washington law firm Jenner & Block said in a report on the Panalpina situation at the time. "Even those businesses that maintain strict internal controls and work hard to comply with U.S. anti-bribery laws have difficulty with FCPA-compliance in this region.