Avon Products, Inc. has settled its case that charged its China unit with bribery, specifically disguising gifts and cash to Chinese government officials as business expenses in exchange for business benefits between 2004 and 2008.
The direct seller of cosmetics, based in New York, entered into agreements with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) related to the previously disclosed Foreign Corrupt Practices Act (FCPA) investigations. The agreements include aggregate payments of $135 million to the two U.S. government agencies, with $68 million in fines payable to the DOJ and $67 million in disgorgement and prejudgment interest payable to the SEC, in connection with charges that the company violated the books and records and internal controls provisions of the FCPA.
“We are pleased to have reached agreements with the DOJ and the SEC,” said Sheri McCoy, CEO of Avon Products, Inc.
In the settlement papers, the DOJ recognized Avon’s cooperation and “extensive remediation,” and noted that Avon’s efforts resulted in “important compliance and internal controls improvements.”
Final resolution of the SEC matter is subject to approval by the United States District Court for the Southern District of New York. There can be no assurances regarding if and when the court will approve the SEC settlement.