A&O Shearman FCPA Digest | SEC v. VimpelCom Ltd (S.D.N.Y. 2016)

Source Documents

Foreign Official
Unnamed Uzbek government official and close relative of a high-ranking Uzbek government official, with significant influence over Uzbek telecommunication authorities.

Nature of Business
VimpelCom Ltd., headquartered in the Netherlands, is a global provider of telecommunications services. VimpelCom is the sixth largest telecommunications company in the world, operating in Europe, Asia, and Africa. It maintains a class of publicly traded securities on NASDAQ and, until 2013, a class of securities on the New York Stock Exchange.

Influence to be Obtained
According to the SEC’s Complaint, between 2006 and 2012, VimpelCom paid an Uzbek government official over $114 million for access to the Uzbek telecommunications market and the acquisition of important Uzbek licenses and frequencies. Court documents explain that the improper payments were primarily made through sham contracts with a shell company named Takilant Ltd., which VimpelCom knew to be beneficially owned by the official. The SEC also claimed that other payments were made under the guise of legitimate charitable contributions and sponsorships. According to the SEC, VimpelCom was able to generate more than $2.5 billion in revenues as a result of the scheme.

Enforcement
On February 18, 2016, the SEC announced that it had settled an FCPA enforcement action against VimpelCom for violations of the FCPA’s anti-bribery, books-and-records, and internal controls provisions. The settlement required VimpelCom to pay $375 million in disgorgement. Of the total disgorgement, $167.5 million was paid to Dutch regulators and $40 million was credited towards the DOJ’s criminal sanction.