Walmart Reaches Agreements with the DOJ and the SEC to Resolve their FCPA Investigations
June 20 2019 - 2:37PM
Business Wire
Settlement Resolves Seven-Year Government
Investigation; Company has Established a Strong Global
Anti-Corruption Compliance Program
Walmart has entered into a global settlement with the U.S.
Department of Justice (DOJ) and the Securities and Exchange
Commission (SEC) that resolves a more than seven-year investigation
into the company’s compliance with the U.S. Foreign Corrupt
Practices Act (FCPA). Through the settlements, which cover conduct
that took place years ago, Walmart has agreed to a combined payment
of $282.7 million. The global resolution ends all FCPA-related
investigations or inquiries into Walmart and its subsidiaries by
the DOJ and the SEC.
These agreements relate to Walmart’s anti-corruption internal
controls in Brazil, Mexico, India and China prior to April 2011.
Walmart, under the direction of its Audit Committee, conducted a
thorough internal investigation, cooperated with the DOJ and the
SEC, and took extensive steps that have established its strong
Global Anti-Corruption Compliance Program. Over the past seven
years, Walmart spent more than $900 million on FCPA inquiries and
investigations, its Global Compliance Program and organizational
enhancements. Walmart’s actions were acknowledged by the DOJ and
the SEC in the resolution agreements.
“We’re pleased to resolve this matter,” said Walmart President
and CEO, Doug McMillon. “Walmart is committed to doing business the
right way, and that means acting ethically everywhere we operate.
We’ve enhanced our policies, procedures and systems and invested
tremendous resources globally into ethics and compliance, and now
have a strong Global Anti-Corruption Compliance Program. We want to
be the most trusted retailer, and a key to this is maintaining our
culture of integrity.”
As part of the resolution, Walmart entered into a
Non-Prosecution Agreement with the DOJ. The DOJ will not prosecute
the Company if, for a period of three years, the Company meets its
obligations set forth in the agreement. Walmart has also agreed to
an administrative order with the SEC to resolve SEC findings
related to violations of the FCPA’s books and records and internal
controls provisions. In addition, WMT Brasilia S.a.r.l., an
indirect wholly-owned subsidiary of Walmart, has entered a guilty
plea in the U.S. District Court for the Eastern District of
Virginia as part of the agreement with the DOJ for causing a books
and records violation of the FCPA.
Walmart has also agreed with the DOJ to oversight by an
independent compliance monitor with a limited scope for a period of
two years. Also, Walmart has agreed to report to the SEC on its
Anti-Corruption Compliance Program for a period of two years.
Walmart has taken extensive steps to strengthen its Global
Anti-Corruption Compliance Program through enhancing its
anti-corruption compliance policies, procedures, and internal
controls in every country in which it operates. Walmart was
recognized by the New York Stock Exchange Governance Services, a
subsidiary of the NYSE, as the 2016 winner of its "Best Governance,
Risk, and Compliance Program" for Large-Cap companies.
Walmart agreed to pay a total amount of $282.7 million
consisting of the following: a $137.96 million penalty to the DOJ
and $144.69 million in disgorgement of profits plus interest to the
SEC. A $4.3 million penalty, including forfeiture, against WMT
Brasilia S.a.r.l. will be deducted from the amount owed by Walmart
under the Non-Prosecution Agreement. In November 2017, Walmart
disclosed that it had accrued approximately $283 million for the
DOJ and SEC resolution. As a result, the amount will not materially
impact Walmart’s financial results.
Walmart’s Global Anti-Corruption Compliance Program
Enhancements
The DOJ and SEC acknowledged several steps Walmart took to
enhance its Global Anti-Corruption Program. They include:
- Hiring dedicated home office and market-level anti-corruption
compliance leadership including a Global Ethics and Compliance
Officer, an International Ethics and Compliance Officer, and a
Global Anti-Corruption Officer.
- Conducting enhanced monthly and quarterly anti-corruption
monitoring across each of the company’s markets by dedicated
Walmart financial controls and continuous improvement teams;
- Enhancing anti-corruption risk assessments across all
international markets;
- Enhancing on-site global anti-corruption audits to test
adherence to enhanced controls and procedures;
- Enhancing internal controls on the selection and use of
third-party intermediaries who interact with government officials
on Walmart’s behalf;
- Enhancing Walmart’s Global Anti-Corruption Training and
Awareness Program;
- Implementing an automated global license management system for
licenses and permits and a global donation management system;
and
- Terminating business relationships with third parties involved
in the conduct at issue.
For additional information regarding Walmart’s Global
Anti-Corruption Compliance Program, please click here.
About Walmart
Walmart Inc. (NYSE: WMT) helps people around the world save
money and live better - anytime and anywhere - in retail stores,
online, and through their mobile devices. Each week, over 275
million customers and members visit our more than 11,300 stores
under 58 banners in 27 countries and eCommerce websites. With
fiscal year 2019 revenue of $514.4 billion, Walmart employs over
2.2 million associates worldwide. Walmart continues to be a leader
in sustainability, corporate philanthropy and employment
opportunity. Additional information about Walmart can be found by
visiting http://corporate.walmart.com, on Facebook at
http://facebook.com/walmart and on Twitter at
http://twitter.com/walmart.
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