Walmart has been charged by US Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act (FCPA) by failing to comply with US’ anti-corruption laws through schemes in Mexico, Brazil, China and India. According to the SEC’s order, Walmart failed to sufficiently investigate or mitigate certain anti-corruption risks and allowed subsidiaries in the four countries to employ “third-party intermediaries” who made payments to foreign government officials “without reasonable assurances” that they complied with the FCPA. “Walmart valued international growth and cost-cutting over compliance and could have avoided many of these problems” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. WMT Brasília, the company’s Brazilian subsidiary, pleaded guilty to violating the FCPA rules. The company has agreed to pay $282.7 million in penalties to settle the charges - of which it’ll pay the SEC $144.7 million for failing to comply with FCPA rules and another $138m to resolve related criminal charges from the Department of Justice. Apart from the penalty, the retailer has agreed to non-prosecution for three years, provided that it would appoint an independent corporate compliance monitor for two years to ensure that there would be no corruption in the firm’s foreign ventures. Under US' Foreign Corrupt Practices Act (FCPA) enacted in 1977, payment of bribes to foreign officials to assist in obtaining or retaining business is prohibited. The Act applies to prohibited conduct anywhere in the world. Publicly traded companies and their officers, directors, employees, stockholders, and agents - all fall under the ambit of…
