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Avon sets aside millions more for FCPA settlement

Avon Products Inc. said it could pay as much as $132 million to settle an ongoing investigation into whether it paid bribes in China and other countries in exchange for government permits it needed to open new markets.

In its quarterly filing with the SEC, Avon said Thursday it could face penalties from the DOJ and SEC for FCPA offenses of between $89 million and $132 million.

The beauty-products company added about $77 million to a reserve for a potential settlement. It said an offer of $12 million last year to end the SEC’s probe was rejected by the agency, which sought an amount “significantly higher.”

The government’s investigation of Avon began in 2011, following an internal examination by the company in 2008 into allegations that it made payments to China that violated the FCPA.

In May 2011, Avon fired four executives connected to the bribery probe and named a new person to lead the China unit. 

A shareholder lawsuit filed in 2012 accused Avon of paying a big severance to a former head of internal audit in 2006 to buy his silence about bribes in China.

The high end of the penalty Avon is expecting would make it one of the largest ever by a U.S.-based company, but it wouldn’t crack the FCPA Blog’s top ten list.


Julie DiMauro is the executive editor of the FCPA Blog and can be reached here.

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