The federal Security and Exchange Commission said Walmart violated the Foreign Corrupt Practices Act (FCPA) by failing to operate with “sufficient anti-corruption” oversight as it expanded its business overseas over the past decade.
The SEC order states that from around July 2000 to April 2011, Walmart’s subsidiaries in Brazil, Mexico, China, and India regularly employed “intermediaries” who transferred payments to foreign government officials without ensuring that these intermediaries were not taking part in bribery or corruption.
Moreover, when Walmart was alerted of certain corruption risks related to the subsidiaries it did not adequately investigate the allegations or seek to alleviate the risks.
“Walmart valued international growth and cost-cutting over compliance,” Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit, said in the press release.
“The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously and delayed the implementation of appropriate internal accounting controls,” he added.
In order to settle the charges, Walmart has agreed to pay more than US$144 million to the SEC and about $138 million to settle similar criminal charges brought against it by the US Department of Justice.
In a statement, Walmart said that the settlement ends all FCPA related investigations into its business and subsidiaries by the SEC and DOJ.
“We’re pleased to resolve this matter,” Doug McMillon, Walmart’s President and CEO, said in the statement. “Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate.”
As part of its settlement, the retail giant has consented to allow an independent compliance monitor to oversee its activities for two years in order to ensure its adherence to FPCA rules. In addition, Walmart has agreed to report to the SEC on the effectiveness of its in-house Anti-Corruption Compliance Program for two years.
