Fresenius compliance, legal teams expanded in wake of FCPA investigation

8 April 2019 1:52pm

1 April 2019. By Robert Thomason.

Fresenius Medical Care hired new compliance professionals at multiple levels of operation, creating a cadre of 350 workers after an investigation by US authorities into bribery in 13 countries began, the dialysis equipment and services firm told MLex.

"I can tell you that since the initiation of the investigation, the company has invested significant resources and personnel in its ongoing effort to implement and enhance its substantial compliance program," said Matthias Link, Fresenius's vice president for corporate communications.

"In particular, the company has created additional global, regional, and local compliance positions, revised and enhanced its policies, and expanded its training programs," Link said. "Today, approximately 150 dedicated colleagues work in our compliance department, over 200 more in the global legal function."

Fresenius on Friday settled Foreign Corrupt Practices Act investigations with the US Department of Justice and the Securities and Exchange Commission, agreeing to pay $231 million and to retain an independent compliance monitor for two years. Link said that the monitor has not yet been named.

Fresenius had been under investigation for a variety of bribery schemes with officials in Angola, Saudi Arabia, Morocco and 10 other countries to obtain business. The bribery resulted in wrongful profits of $140 million, the US Department of Justice said; this amount plus interest was disgorged to the SEC as part of the settlement.

The DOJ, which granted the company a nonprosecution agreement, tacked on an $84 million penalty. The agency said that although Fresenius had self-reported the wrongdoing, the firm did not "provide fulsome responses to requests for information" during its cooperation and at times was not timely in its responses.

"In light of all the factors, the company did not qualify for a declination under the Corporate Enforcement Policy," the DOJ said.

However, the Justice Department did note in the NPA that Fresenius had taken action to redress the wrongdoing and had enhanced its compliance program.

"The narrow group of actors who were not conducting in a compliant manner have been disciplined or removed,"  said Fresenius' Link.

The NPA said at least 10 Fresenius employees "who were involved in or failed to detect the misconduct" were removed and that relationships were terminated with third parties and agents involved in the scheme.

Link also said Fresenius revised its anticorruption policies. Its Business Code of Ethics includes an anticorruption section that calls on employees to comply with the FCPA, the UK Bribery Act, the German criminal code and anticorrupion laws of each country in which it does business.

He said that Fresenius has published a directive outlining business ethics principles for business partners. The document says that agents and third parties are bound by the same legal and ethical rules that Fresenius employees must obey.

"In particular, no one acting on Fresenius Medical Care’s behalf may offer, promise, give, authorize giving, request, or accept any advantage or anything of value to or from outside parties in order to:  (i) improperly influence a desired action; (ii) induce an act in violation of a lawful duty; (iii) cause the person to refrain from acting in violation of a lawful duty; (iv) secure any improper advantage; or (v) improperly influence the decision of a government," the company's directive states.

	Eliot Gao