Overview
On
J&F is a global conglomerate primarily involved in the meat and agriculture businesses; it is the largest meat and protein producer in the world with net revenues in 2019 exceeding
Improper Payments in Exchange for Financing
The DOJ found that J&F paid bribes to Brazilian officials in a long-running scheme from 2005 to 2017 to "ensure that Brazilian state-owned and state-controlled banks would enter into debt and equity financing transactions with J&F and J&F-owned entities." According to the DOJ, J&F paid or promised to pay more than
Improper Payments in Exchange for State Approval of Acquisition of
The DOJ also found that J&F paid
Cooperation and Remediation
While J&F did not voluntarily disclose the misconduct, the DOJ gave the company partial credit for cooperation and remediation, resulting in a 10 percent fine reduction off the
Key Takeaways
- Anti-Corruption Enforcement Continues to Be a Global Affair: J&F settled with Brazilian authorities in
May 2017 for$3.2 billion for related conduct. The DOJ agreed to credit half of J&F's criminal fine ($128 million ) for payments J&F makes pursuant to a resolution with Brazilian authorities for the same conduct. - State-Owned Financing Is a Key Emerging FCPA Risk: BNDES, a state-owned development bank, is among the largest development banks in the world and has more money out in loans for development projects than the
World Bank has worldwide. It provides direct and indirect capital to local entities to support economic growth inBrazil and partners with several accredited banks through on-lending to do so. Business dealings with state-connected entities like BNDES pose a high corruption risk. As a result: (1) Banks with substantial on-lending or joint-lending relationships with BNDES are at risk of becoming targets or subjects of aU.S. investigation; and (2) companies with significant investments from BNDES are also at risk of becoming targets or subjects of aU.S. probe. - Even Absent Self-Disclosure, Cooperation and Remediation Pay: The DOJ found that J&F's conduct was serious and pervasive, particularly as it "included executives at the highest levels of the company and the payment of tens of millions of dollars in bribes to high-level government officials...over a period of years." Even so, both the DOJ and
SEC credited the company for its cooperation with the investigation and remediation efforts. The DOJ's 10 percent reduction off the USSG fine range reflected a savings of nearly$26 million , and J&F was not required to retain a corporate compliance monitor.
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