Legal News

Next Stop on FCPA Train: China?

By Amir Efrati

There seemingly is no limit to where the Foreign Corrupt Practices Act — the U.S. law that bars companies from bribing foreign officials — can take us.

On Tuesday we turned to China, where Avon Products, the beauty products company based in New York, is investigating its operations. Here’s the WSJ story and LB posts on FCPA matters.

The company has suspended three top executives in its China unit amid an internal investigation into alleged bribery that began in China and, according to story, now involves a dozen or more countries. A fourth suspended employee was a senior executive in New York who was Avon’s head of internal audit until the middle of last year, WSJ reported.

Avon’s China unit wouldn’t make the executives available to comment or discuss their alleged activities. The New York executive couldn’t be reached for comment.

The possible wrongdoing under investigation includes the alleged purchase of trips to France, New York, Canada and Hawaii for Chinese government officials with ties to Avon’s business, according to WSJ.

Avon first disclosed in October 2008 that it was looking into whether certain travel, entertainment and other expenses in China might have “been improperly incurred.” But the scope of the investigation has since widened to regions including Latin America, where the company garners the bulk of its sales and profits, WSJ said. The scale of the alleged bribery, initially involving several million dollars, has grown as well, according to the story.

The story said the company disclosed its internal probe to the Securities and Exchange Commission and the Justice Department.

Full post as published by Law Blog - WSJ.com on April 13, 2010 (boomark / email).