United States: Settlements In Brief: Siemens Case Gets Israeli Sequel And SEC Emphasises Self-Reporting

Criminal and supervisory authorities regularly settle enforcement actions. In light of these developments, we advise companies to take appropriate measures. This month we highlight the Israeli Ministry of Justice's settlement with Siemens. This settlement can partly be traced back to Siemens' settlement with the US authorities in 2008 and proves that these trajectories can take up a considerable amount of time. We also discuss two settlements with the SEC for alleged violations of the Foreign Corrupt Practices Act. These settlements seem to indicate that the companies in these cases benefitted from prompt and voluntary self-reporting the alleged misconduct to the authorities and cooperating fully with the official investigation.

FCPA-case against Siemens receives an Israeli sequel

In early May 2016, a settlement between Siemens AG and the Israeli authorities became public in connection with the alleged bribery of Israeli officials working at state-owned entity, Israel Electric Corporation (IEC). In addition to paying NIS 160 million (around USD 42 million), Siemens agreed to the appointment of an external inspector responsible for supervising Siemens' activities in Israel. Additionally, six former senior Siemens executives were charged with money-laundering, fraud and breach of trust. According to various news outlets, representatives of Siemens in Israel had allegedly bribed senior IEC executives between 1999 and 2005 to obtain business. In exchange for payment, the IEC executives allegedly favoured Siemens' bids for the supply of turbines. The news outlets reported that the bribes were either transferred to Swiss bank accounts or taken out of the country in suitcases.

The non-prosecution agreement entered into with the Israeli authorities can partly be traced back to Siemens' 2008 settlement with the SEC and the U.S. Department of Justice for violations of the Foreign Corrupt Practices Act (FCPA). In 2008, Siemens settled for USD 350 million with the SEC and for USD 450 million with the DOJ for the alleged bribery of foreign governmental officials from several countries (including Israel) to obtain business. According to the SEC, Siemens used a number of schemes to hide the actual purpose of the payments, such as transporting cash via suitcases. Former senior Siemens management was also purportedly involved in the alleged corrupt practices. The SEC found that Siemens lacked sufficient internal controls to adequately prevent bribery. Siemens neither admitted nor denied the allegations.

The current settlement with the Israeli authorities indicates that a settlement with the US authorities does not mean that a case has permanently ended. Taking into account that national enforcement authorities are increasingly cooperating with each other in the global fight against corruption, a settlement with one authority could be the first of multiple enforcement actions relating to the same or similar conduct. Corporations should take into account that these national investigations can take up to several years before coming to an end, as the current settlement indicates.

SEC emphasises the importance of self-reporting in two separate NPAs

In June, the SEC announced two separate non-prosecution agreements for the alleged bribery of Chinese governmental officials. Firstly, Akamai Technologies settled for USD 671,885 disgorgement including interest. The other settlement that was announced was with Nortek Inc. The DPA provided for USD 322,058 disgorgement including interest.

According to the SEC, Akamai's Chinese subsidiary had made payments to Chinese governmental officials working at state-owned entities in exchange for the purchase of more network capacity than necessary. To this end and against company policy, Akamai allegedly provided the Chinese officials with gift cards, meals and entertainment. In a similar manner, Nortek is said to have made payments, and provided meals and entertainment to Chinese officials in order for these officials to treat Nortek preferentially and to put the company under a more relaxed regulatory regime. Moreover, Nortek allegedly paid reduced customs duties, taxes and fees as a consequence of the payments.

In its press release, the SEC emphasised that both companies self-reported the alleged misconduct and that they laid "all their cards on the table." According to SEC, this approach was the reason behind the "expeditious resolutions." Among other things, both Akamai and Nortek took the following mitigating measures:

  • self-report to the SEC within "the early stages of internal investigations"
  • share the detailed findings of the investigations with the SEC and regularly update the SEC of new findings
  • provide the SEC both with summaries of already conducted witness interviews and the opportunity to interview witnesses itself
  • voluntarily provide the SEC with translated documents
  • terminate the contracts of employees who were allegedly involved in the misconduct
  • improve the anti-corruption policies and facilitate global training for employees.

According to the SEC, both NPAs indicate that the prompt and voluntary reporting of actual or suspected misconduct and extensive cooperation with the SEC may not only lead to a severe mitigation of a sentence, but also to no criminal penalty being imposed on the corporation at all. Even though prompt disclosure and extensive cooperation can work in a company's favour, businesses are advised to thoroughly consider all possible outcomes of disclosure, including any negative consequences.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions