United States v. Parametric Technology (Shanghai) Software Co. Ltd. and Parametric Technology (Hong Kong) Limited (2016)
Date Filed
02/16/2016
Enforcement Agency
DOJ
Countries
China
Foreign Official
Employees of Chinese state-owned entities.
Date of Conduct
2008 to 2011
Nature of Business
Parametric Technology (Shanghai) Software Co. Ltd. and Parametric Technology (Hong Kong) Limited (collectively “PTC China”) are wholly owned subsidiaries of PTC Inc. (formerly Parametric Technology Company). PTC is a Massachusetts corporation headquartered in Needham, Massachusetts. PTC designs, manufactures, and sells software, including computer aided design software and product lifecycle management software. PTC’s operations in China, including sales to Chinese customers, are managed through PTC China. PTC’s stock is registered with the U.S. Securities and Exchange Commission and is listed on NASDAQ.
Influence to be Obtained
According to the DOJ, from at least 2008 to 2011, PTC China provided improper payments of over $1 million to customers who were employed at Chinese state-owned entities to obtain or retain business. The DOJ claims that PTC China made the improper payments in one of two ways: (1) by providing over $1 million to third-party agents disguised as commission or sub-contracting payments that were used to pay for non-business foreign travel for the Chinese officials; and (2) by allowing sales staff to provide gifts and excessive entertainment of over $250,000 to the Chinese officials. During the time period, PTC China entered into more than $13 million in contracts with the Chinese state-owned entities.
The DOJ claims that PTC China employees and business partners directly or indirectly funded 24 trips that included a recreational component for Chinese officials. PTC China employees allegedly organized overseas trips in conjunction with visits to a PTC facility. As part of these business trips, PTC China employees allegedly included several days of sightseeing to destinations such as New York, Las Vegas, Los Angeles, and Hawaii for recreational purposes.
In addition to the above, between 2009 and 2011, PTC China employees directly provided gifts and entertainment of over $250,000 to Chinese officials, in part to obtain or retain business from state-owned entities. The gifts and entertainment were made in contravention of PTC’s internal policies which impose approval requirements and monetary limits on gifts and entertainment for government officials.
Enforcement
On February 16, 2016, the DOJ announced that it had entered into a three-year non-prosecution agreement with PTC China. According to the agreement, PTC China would pay a criminal penalty of $14.54 million.
United States v. Parametric Tech. (Shanghai) Software Co. Ltd.(2016).
Date Filed
02/16/2016
Filed Under Seal
No
FCPA Statutory Provision
Anti-Bribery
Other Statutory Provision
None
Disposition
Non-Prosecution Agreement
Defendant Jurisdictional Basis
Issuer
Defendant's Citizenship
United States
Parametric Technology (Hong Kong) Limited
Citation
United States v. Parametric Tech. (Shanghai) Software Co. Ltd.(2016).
Date Filed
02/16/2016
Filed Under Seal
No
FCPA Statutory Provision
Anti-Bribery
Other Statutory Provision
None
Disposition
Non-Prosecution Agreement
Defendant Jurisdictional Basis
Issuer
Defendant's Citizenship
United States
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