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JUSTICE NEWS

Department of Justice
Office of Public Affairs

--------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE
Friday, December 2, 2022


ABB AGREES TO PAY OVER $315 MILLION TO RESOLVE COORDINATED GLOBAL FOREIGN
BRIBERY CASE

ABB SUBSIDIARIES IN SWITZERLAND AND SOUTH AFRICA PLEAD GUILTY TO BRIBERY
CONSPIRACY

ABB Ltd. (ABB), a Swiss-based global technology company listed on the New York
Stock Exchange with core businesses focused on electrification, automation,
motion, and robotics has agreed to pay more than $315 million to resolve an
investigation into violations of the Foreign Corrupt Practices Act (FCPA)
stemming from the bribery of a high-ranking official at South Africa’s
state-owned energy company. 

The Department of Justice’s resolution is coordinated with prosecutorial
authorities in South Africa and Switzerland, as well as the U.S. Securities and
Exchange Commission (SEC).

“This is the department’s first coordinated resolution with authorities in South
Africa, where much of ABB’s criminal scheme was carried out, reflecting our
commitment to relationship-building and our ever-deepening partnerships in the
global fight against corruption,” said Assistant Attorney General Kenneth A.
Polite, Jr. of the Justice Department’s Criminal Division.  “ABB bribed a
high-ranking official at South Africa’s state-owned energy company in order to
corruptly obtain confidential information and win lucrative contracts. In
addition, our partners in South Africa have brought corruption charges against
that official.  This resolution demonstrates the Criminal Division’s thoughtful
approach to appropriately balancing ABB’s extensive remediation, timely and full
cooperation, and demonstrated intent to bring the misconduct to the department’s
attention promptly upon discovering it, while also accounting for ABB’s
historical misconduct.” 

According to court documents and statements made in court, ABB entered into a
three-year deferred prosecution agreement (DPA) with the department in
connection with the filing of a criminal information in the Eastern District of
Virginia charging the company with conspiracy to violate the FCPA’s anti-bribery
provisions, conspiracy to violate the FCPA’s books and records provisions, and
substantive violations of the FCPA. In addition, ABB subsidiaries ABB Management
Services Ltd. (Switzerland) and ABB South Africa (Pty) Ltd. (South Africa) each
pleaded guilty to one count of conspiracy to violate the anti-bribery provisions
of the FCPA. 

The department reached this resolution with ABB based on a number of factors,
including: 1) the nature and seriousness of the misconduct; 2) ABB’s
demonstrated intent to disclose the misconduct promptly to the department; 3)
ABB’s extraordinary cooperation with the department’s investigation; 4) ABB’s
extensive remediation, including carrying out a root-cause analysis of the
misconduct and making significant investments in compliance personnel,
compliance testing, and monitoring through the organization; 5) ABB’s commitment
to further enhance its compliance program and internal controls, including
enhanced reporting provisions that require ABB, during the pendency of the DPA,
to meet with the department at least quarterly and to submit yearly reports
regarding the status of its remediation efforts, the results of its testing of
its compliance program, and its proposals to ensure that its compliance program
is reasonably designed, implemented, and enforced, so that it is effective in
deterring and detecting violations of the FCPA and other applicable
anti-corruption laws; 6) ABB’s decade-old criminal history, which includes two
prior criminal resolutions by ABB entities with the department for FCPA
violations in 2004 and 2010, as well as a guilty plea by an ABB entity for bid
rigging in 2001; 7) ABB’s agreement to concurrently resolve separate
investigations by authorities in South Africa and Switzerland, as well as the
SEC, and its anticipated resolution of a related investigation by German
authorities; and 8) ABB’s agreement to continue to cooperate with the department
in ongoing investigations. In light of these considerations, the criminal
monetary penalty reflects a 25% discount off the mid-point between the middle
and high end of the otherwise applicable U.S. Sentencing Guidelines fine range.

Pursuant to the DPA, ABB’s total criminal penalty is $315 million. The
department has agreed to credit up to one-half of the criminal penalty against
amounts the company pays to authorities in South Africa in related proceedings,
along with other credits for amounts ABB pays to resolve investigations
conducted by the SEC and authorities in Switzerland and Germany, so long as
payments underlying an anticipated resolution with German authorities are made
within 12 months of today’s date. 

“Corruption and bribery are not victimless acts. They can create hazardous
working conditions, hurt honest businesses, and erode trust and integrity in
local and global governance,” said U.S. Attorney Jessica D. Aber for the Eastern
District of Virginia. “This resolution reflects the need for accountability,
recompense, and rehabilitation in the wake of these kinds of violations. I
extend my appreciation to the law enforcement authorities in South Africa,
Switzerland, and Germany for their invaluable assistance.”  

“As this resolution shows, international partnerships are central to the FBI’s
efforts against global corruption,” said Assistant Director Luis Quesada of the
FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners
conducted a thorough investigation to uncover the source of bribes to a senior
official at South Africa’s state-owned energy company. No matter which country
the crime occurs in, the FBI is steadfast in pursuing those who violate the
Foreign Corrupt Practices Act.” 

According to ABB’s admissions and court documents, between 2014 and 2017, ABB,
through certain of its subsidiaries, paid bribes to a South African government
official who was a high-ranking employee at the state-owned and controlled
energy company, Eskom Holdings Limited (Eskom) to obtain business advantages in
connection with the award of multiple contracts. ABB engaged multiple
subcontractors associated with the South African government official and made
payments to those subcontractors that were intended, at least in part, as
bribes. ABB worked with these subcontractors despite their poor qualifications
and lack of experience. In return, ABB received improper advantages in its
efforts to obtain work with Eskom, including, among other benefits, confidential
and internal Eskom information. 

As part of the scheme, ABB conducted sham negotiations to obtain contracts at
inflated prices that ABB had pre-arranged with the South African government
official, all on the condition that ABB employ a particular subcontractor
associated with that official. ABB also falsely recorded payments to the
subcontractors as legitimate business expenses when, in fact, a portion of the
payments were intended as bribes for the South African government official.

The FBI’s International Corruption Unit and the United State Postal Inspection
Service (USPIS) are investigating the case. The Justice Department’s Office of
International Affairs provided valuable assistance. The department also
expresses its appreciation for the assistance provided by law enforcement
authorities in South Africa, Switzerland, and Germany.

Trial Attorney William E. Schurmann and Assistant Deputy Chief Jonathan P.
Robell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney
Heidi B. Gesch for the Eastern District of Virginia are prosecuting the case.

The Fraud Section is responsible for investigating and prosecuting FCPA matters.
Additional information about the Justice Department’s FCPA enforcement efforts
can be found at www.justice.gov/criminal/fraud/fcpa.

Attachment(s): 
Download ABB South Africa criminal information
Download ABB South Africa plea agreement
Download ABB Ltd. criminal information
Download ABB Management Services criminal information
Download ABB Ltd. DPA
Download ABB Management Services plea agreement
Topic(s): 
Foreign Corruption
Component(s): 
Criminal Division
Criminal - Criminal Fraud Section
Criminal - Office of International Affairs
Federal Bureau of Investigation (FBI)
USAO - Virginia, Eastern
Press Release Number: 
22-1296
Updated December 6, 2022
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