Twice an offender? $233 Million for violating FCPA + $122 Million to settle with SEC: meet Novartis

Part of the risk that businesses need to manage when doing business overseas is ensuring that its employees or people on the ground commit no crimes, among them are the crimes of bribery and corruption. Foreign Corrupt Practices Act's anti-bribery provisions prohibit any gifts made to foreign officials to obtain or retain business. Understanding who can be a foreign official is critical when doing business. For instance, doctors at a state - owned hospital are considered foreign officials for FCPA purposes. Most companies miss or ignore this and violate FCPA provisions.

In Novartis, although doctors were bribed, confusion about their status wasn't the trouble. To be clear Novartis is a mega company and this isn't the first time Novartis has violated the FCPA provisions. But it did again violate them, I suppose second time's a charm. Here is what happened in short: Novartis Hellas S.A.C.I. a subsidiary of Norvatis AG, a Switzerland - based global company, and Alcone Pte Ltd entered into a deferred prosecution agreement ("DPA") with the Department of Justice to settle criminal charges of two consiparies: Consiparcy to violate FCPA's anti-bribery provisions this for Novartis Greece, and conspiracy to falsify books and records, this for Alcone Pte Ltd.

Briefly, what took place was this: Novartis Greece devised a scheme to bribe "medical professionals, hospitals, and clinics to prescribe Novartis based pharmaceuticals and use Alcone surgical products, and falsify books and records." The scheme included travel to international congresse, events, and travel to U.S. "as a means to increase the number of sales of prescriptions they wrote for Lucentris". Whereas in Vietnam Alcone Pte Ltd it seems to have implemented a scheme to bribe employees of state owned hospitals and it conspired to falsify its books and records.

The scheme was discovered and now the company is paying a hefty price not only from a monetary perspective but also reputation wise, drawing the attention of the press to report on its misdeeds. Novartis perhaps has millions to cover the damage done, and it may recover from what has happened, what if this was your company? Your cost to your company? Crime doesn't pay, take steps to protect your company and your reputation. before going internationally

If you're a company that does business internationally and would like to know more about how you can protect your company and its reputation against risk related to bribery and corruption or would like training of your employees on FCPA, reach out to Attorney Dismondy, she is among attorneys that works with companies to prevent anti-corruption and anti-bribery in domestic and international markets. Attorney Dismondy can be reached at 734-746-5006.

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