Global: SAP Settles FCPA Allegations, Agrees to $220 Million Payments

German software company SAP has reached a settlement exceeding $220 million with U.S. and South African authorities, resolving alleged violations of the Foreign Corrupt Practices Act (FCPA). The Department of Justice (DOJ) imposed a criminal penalty of nearly $119 million on SAP, with an additional forfeiture of over $103 million. The Securities and Exchange Commission (SEC) announced a disgorgement and prejudgment interest of almost $100 million. South African authorities are also part of the coordinated settlements.

Key Points from FCPA Allegations:

1. DOJ Investigation Focus: The DOJ’s investigation primarily centered on bribery schemes involving South African and Indonesian government officials. In South Africa, between 2013 and 2017, SAP and its agents allegedly paid bribes and manipulated records to secure contracts with cities and state-owned entities. In Indonesia, from 2015 to 2018, SAP’s bribery scheme targeted the Ministry of Maritime Affairs and Fisheries and a state-controlled telecommunications agency.
2. SEC Findings: The SEC identified additional countries, including Azerbaijan, Ghana, Kenya, Malawi, Tanzania, and Azerbaijan, where SAP’s intermediaries sought to pay bribes between 2014 and 2018. The SEC emphasized SAP’s inaccurate recording of bribes as legitimate business expenses and insufficient internal accounting controls over third parties and subsidiaries.
3. Compliance Considerations: SAP’s criminal penalty was reduced by 40% due to its settlements with the DOJ in 2021 for Iran sanctions violations and with the SEC in 2016 for alleged FCPA violations in Panama. Both the DOJ and SEC acknowledged SAP’s cooperation in promptly producing documents, resolving internal investigation discrepancies, implementing various compliance measures, and disciplining involved employees.
4. Company Response: SAP welcomed the settlement agreements, highlighting its separation from responsible parties over five years ago. The company emphasized its significant efforts in enhancing global compliance programs, internal controls, and cooperation with authorities.

The settlements underscore the importance of international collaboration against corruption and highlight how corporate enforcement policies incentivize companies to cooperate and remediate misconduct. SAP’s case exemplifies the critical role of global efforts in combating corruption and the positive impact of companies becoming responsible corporate citizens through cooperation and remediation.