SAP is set to pay over R4 billion ($220 million) to resolve investigations into schemes to pay bribes to government officials in South Africa and Indonesia.
SAP SE is a publicly traded global software company based in Germany.
This resolution was made to resolve investigations by the US Justice Department and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA).
The US department’s resolution is coordinated with prosecutorial authorities in South Africa, as well as with the SEC.
Court documents revealed that SAP entered into a three-year deferred prosecution agreement (DPA) with the department in connection with a criminal information filed in the Eastern District of Virginia in the US, charging the company with two counts.
These two counts are –
- Conspiracy to violate the anti-bribery and books and records provisions of the FCPA relating to its scheme to pay bribes to South African officials
- 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 US Justice 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.”
US attorney Jessica Aber for the Eastern District of Virginia said SAP had accepted responsibility for “corrupt practices that hurt honest businesses engaging in global commerce”.
“We will continue to vigorously prosecute bribery cases to protect domestic companies that follow the law while participating in the international marketplace,” she added.
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.
The companies delivered money in the form of cash payments, political contributions, and wire and other electronic transfers, along with luxury goods purchased during shopping trips.
In 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.
This was done with the goal of obtaining improper advantages for SAP in connection with various contracts with South African departments, agencies, and instrumentalities.
These organisations included the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation, and Eskom.
“This successful resolution against SAP is another example of the power of relationships and persistence,” said Assistant Director in Charge Donald Always of the FBI’s Los Angeles Field Office.
“The sustained diligence by the prosecution team and continuous collaboration with South African law enforcement, regulators, and prosecutors identified corrupt activity in multiple countries.”
Between approximately 2015 and 2018, SAP also 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.
In accordance with the DPA, SAP will pay a criminal penalty of R2.21 billion ($118.8 million) and administrative forfeiture of R1.93 billion ($103.4 million).
The penalty reflects a 40% reduction based on SAP’s cooperation, remediation, and prior history of compliance violations.
This is because SAP will continue cooperating with the US Justice Department in any ongoing or future criminal investigation arising during the term of the agreement.
In addition, the department will credit up to R1.03 billion ($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 implemented remedial measures, including enhancing compliance programs and conducting root cause analyses.