The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

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By Topic: Discounts

  • From Vol. 5 No.3 (Feb. 10, 2016)

    From Discounts to Slush Funds: Red Flags to Heed and Eight Steps to Take to Avoid SAP’s $3.9 Million Mistakes

    As companies increase the complexity of their compliance programs, employees trying to make corrupt payments are forced to become more and more creative to circumvent those programs. German software and technology company SAP SE recently learned that the hard way when it agreed to pay nearly $3.9 million to settle charges that it violated both the books and records and the internal controls provisions of the FCPA. According to the SEC, a former SAP executive created a slush fund by providing an 82% discount to one of SAP’s local partners. That money was then used to pay $145,000 in bribes to one senior Panamanian official and offer bribes to two others. Adrian D. Mebane, vice president and deputy general counsel of The Hershey Company told The FCPA Report that the settlement reinforces a company’s obligation to maintain robust internal controls. That obligation goes beyond financial controls and includes establishing a compliant tone at the top, performing risk assessments, maintaining procedures to guarantee directives are followed for high-risk transactions, and ongoing monitoring, he said. See also “Miller & Chevalier’s Ellis Offers Insights From Former SAP Employee’s FCPA Guilty Plea and SEC Settlement” (Sep. 9, 2015).

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