Teva reaches settlement with government on FCPA (Foreign Corrupt Practices Act).
Teva Pharmaceuticals Industries Ltd. announced the conclusion of negotiations with the United States government over violations of the Foreign Corrupt Practices Act (FCPA). Following Teva’s voluntary worldwide investigation into business practices, Teva and the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have agreed to a resolution to resolve previously disclosed investigations into conduct relating to three countries — Ukraine, Mexico and a guilty plea by the subsidiary in Russia.
The resolution includes a deferred prosecution agreement, the implementation of a temporary independent compliance monitor, and previously reserved payments totaling $519 million. The resolution involves conduct occurring in the past, and none of the employees involved in the improper payments are still employed by Teva, including in Russia where the entire leadership team was replaced in 2013. None of the conduct in question involved Teva’s U.S. sales.
“While the conduct that resulted in this investigation ended several years ago, it is both regrettable and unacceptable, and we are pleased to finally put this matter behind us,” said Erez Vigodman, Teva’s president and CEO. “Since becoming CEO, I have worked diligently to make our culture of compliance central to everything Teva does. The compliance program that Teva has in place is serious, rigorous, and comprehensive and is designed to protect the company and its subsidiaries against future violations.”
Upon learning of initial FCPA concerns from both Teva employees and the U.S. government in early 2012, Teva began a voluntary and comprehensive investigation into our global operations, in addition to responding to the government’s specific requests for documents and information. Teva engaged independent counsel to assist in the investigation and conducted a global corruption risk assessment and a multi-country survey.
Beginning in 2012, Teva accelerated the pace of changes to address these issues by naming a global head of compliance and completely transforming our governance program and processes on every level. This resulted in actions including, terminating problematic business relationships with third parties, separating relevant employees from the company, overhauling the management of several subsidiaries, and ceasing operations in several countries.
The company formed a new global organizational structure and chain of command to reduce risks. In order to institute a culture of compliance throughout the organization, it also trained tens of thousands of employees on compliance and anti-corruption measures, protocols and best practices.
“The Teva of today is a fundamentally different company,” stated Vigodman. “We welcome working with the monitor as an added step in our process to ensure the program we have put in place is working as designed. Teva has a compliance culture that begins with a strong tone at the top, including our executive regional and local management and a culture of compliance that underpins every single business decision that Teva makes.”
(Source: Business Wire)