In the Matter of Telia Company AB (2017)

• Case Name
• In the Matter of Telia Company AB (2017)

• Date Filed
• 09/21/2017

• Enforcement Agency
• SEC

• Countries
• Uzbekistan

• Foreign Official
• Unnamed government official in Uzbekistan.

• Date of Conduct
• 2007 to 2010

• Nature of Business
• Telia Company AB is a telecommunications company organized under the laws of Sweden which operates throughout Europe and Asia.  Prior to September 5, 2007, Telia’s securities were registered with the SEC under Section 12(b) of the Exchange Act.  Telia operates through a wide network of subsidiaries and joint ventures.

• Influence to be Obtained
• According to the SEC, throughout the relevant period, Telia paid approximately $330 million in bribes to an Uzbek government official (“Uzbek Official”).  Telia then recorded those payments as legitimate lobbying and consulting services, without any documentation that they ever occurred.
  
  In 2006, Telia began exploring expansion opportunities in the Eurasia market.  It identified Uzbekistan as a target market and, in particular, COSCOM, an existing Uzbek telecommunications operator, as an acquisition target to facilitate the expansion.  The Uzbekistan telecommunications market was highly regulated by the government, and any issue of licenses, frequencies, channels, and number blocks must be approved by government officials.  Throughout the relevant time period, Telia developed and maintained a relationship with the unnamed Uzbek Official, who was a family member of the President of Uzbekistan at the time and could exert influence over officials who regulated the telecommunications market.
  
  Telia accomplished its expansion through a series of agreements with the Uzbek Official.  According to the SEC, Telia understood that corrupt payments to the Uzbek Official were required to operate in Uzbekistan.  In July 2007, Telia entered into an agreement to provide the Uzbek Official with an ownership stake in COSCOM, as well as other payouts, in exchange for the official causing government regulators to issue licenses, frequencies, and number blocks. 
  
  In its effort to acquire 3G, and later 4G, licenses, Telia also fraudulently paid the Uzbek Official, through a network of sham holding companies, fees for consulting services that were never provided.  These payments should have alerted Telia’s managers, since the licenses sought could only have been obtained directly from the telecommunications regulator in Uzbekistan, and for which up-front payments were not required.

• Enforcement
• On September 21, 2017, the SEC settled its enforcement action against Telia for violations of the FCPA’s anti-bribery and internal controls provisions.  According to the cease-and-desist order, Telia agreed to pay $457,000,000 in disgorgement.

• Amount of the Value
• $330,000,000

• Amount of Business Related to Payment
• Approximately $2,500,000,000 in profit.

• Intermediary
• Shell Company.

• Citizenship of Parent Entity
• Sweden

• Total Sanction
• $ 457,000,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 965,603,972

• Related Enforcement Actions
• United States v. Telia Company AB (S.D.N.Y. 2017)
  United States v. Coscom LLC (S.D.N.Y. 2017)
  

Telia Company AB 

• Citation
• In the Matter of Telia Company AB., Admin. Proc. File No. 3-18185 (September 21, 2017).

• Date Filed
• 09/21/2017

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Sweden