Ralph Lauren Corp. settled charges from the Securities Exchange Commission ("SEC") and U.S. Department of Justice that it had paid bribes to foreign customs officials in Argentina in violation of the Foreign Corrupt Practices Act ("FCPA"). The 1977 FCPA prohibits U.S. companies and companies listed on U.S. stock exchanges from bribing foreign officials. The settlement amount of $1.6 million will end investigations over the bribery which is said to have spanned four years from 2005 to 2009 made by a RL subsidiary to custom officials in order to obtain entry of RL's products into the country without necessary paperwork, to avoid inspections of prohibited products and inspections by customs officials.
The government agencies praised RL for self-reporting the violation and for the first time ever, the SEC entered into a non-prosecution agreement over a FCPA violation. The reasons being, SEC noted its press release were, "the company's prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC's investigation. Ralph Lauren Corporation's cooperation saved the agency substantial time and resources ordinarily consumed in investigations of comparable conduct." The Justice Department also entered into an NPA with RL in which RL admitted and accepted responsibility for the violations and avoided criminal prosecution.
RL uncovered the bribery in 2010 when revamping its international internal controls and compliance program related to the FCPA and RL employees raised red flags to the company. Still, RL exited Argentina last year which is a notoriously difficult country to do business in given the strict import laws.
Read More:
WSJ: Perfume, Dresses and Cash in Ralph Lauren Bribe Scheme
SEC Press Release: SEC Announces Non-Prosecution Agreement With Ralph Lauren Corporation Involving FCPA Misconduct
NYTimes: Ralph Lauren Corp. Agrees to Pay Fine in Bribery Case
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