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Safran receives ‘declination with disgorgement’ for train bathroom bribes

French aerospace defense company Safran S.A. received a declination from the DOJ last week despite bribery that violated the FCPA.

The offenses were committed by employees and agents of a U.S. subsidiary called Monogram Systems before Safran acquired the subsidiary.

According to the declination letter, Paris-based Safran agreed to disgorge $17.9 million in profits.

From 1999 until 2015, Monogram and its German subsidiary EVAC GmbH paid millions of dollars to a China-based business consultant who was a close relative of a then-senior Chinese government official to obtain train lavatory contracts with the Chinese government.

The DOJ declined prosecution pursuant to the Corporate Enforcement Policy and the Principles of Federal Prosecution of Business Organizations in the Justice Manual.

Among other factors, the DOJ cited Safran’s timely and voluntary self-disclosure of the misconduct, its “full and proactive” cooperation and remediation, including terminating and disciplining employees involved, and effort to enhance its anti-corruption training and compliance program.

The DOJ also said the misconduct at Monogram and EVAC had ceased before Safran acquired them, and that Safran identified the misconduct “through post-acquisition due diligence and disclosed it to U.S. authorities.

Finally, Safran agreed to “accept responsibility and resolve liability” of EVAC in connection with an ongoing investigation by German authorities. The DOJ said it will “defer to German authorities in imposing any amount Safran owes resulting from EVAC’s involvement in the same scheme.”

The DOJ’s declination letter to Safran was addressed to Peter Spivak of Hogan Lovells’ DC office.

It was this year’s fifth reported corporate declination. Earlier declinations involved Jacobs Engineering Group, Tenaris, S.A., Jardine Lloyd Thompson Group Holdings Ltd., and Cisco Systems, Inc., according to data from FCPA Blog+.

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