Ralph Lauren Corp. has agreed to pay the U.S. government more than $1.6 million in fines to settle bribery allegations in Argentina.
The settlement originated from charges that the fashion and home retailing giant bribed Argentine officials to avoid custom and inspection requirements in that country.
The New York States Attorney alleged the retailer through their RLC Argentina subsidiary attempted to secure improper customs clearance of their merchandise over a five-year period. In some cases they sought to avoid the inspection process completely and/or try to bring prohibited merchandise into Argentina. The U.S. alleged the company used fake invoices to hide the bribe payments of nearly $600,000.
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The investigations by the DOJ and the SEC were prompted by the New York-based fashion house after its employees in Argentina raised concerns internally following the company’s adoption in 2010 of a new policy related to the 1977 Foreign Corrupt Practices Act, which prohibits American companies and companies listed on U.S. stock exchanges from paying bribes to foreign government officials.
In reporting the agreement, the SEC acknowledged the company’s “prompt reporting of the violations” and its “extensive, thorough, and real-time cooperation” in the investigation, which contributed to the apparel company not being charged with violating the Foreign Corrupt Practices Act.
“When they found a problem, Ralph Lauren Corporation did the right thing by immediately reporting it to the SEC and providing exceptional assistance in our investigation,” said George S. Canellos, Acting Director of the SEC’s Division of Enforcement. “The non-prosecution agreement in this matter makes clear that we will confer substantial and tangible benefits on companies that respond appropriately to violations and cooperate fully with the SEC.”
Additionally, U.S. authorities also pointed out that the company “lacked meaningful anti-corruption compliance and control mechanisms over its Argentine subsidiary”, and that the misconduct came to light as a result of the company adopting measures to improve its worldwide internal controls and compliance efforts, including implementation of an FCPA compliance training program in Argentina.