SAP

German multinational software company SAP has settled charges of conspiring to violate provisions of the US Foreign Corrupt Practices Act (FCPA) in several countries and resolved specific allegations of bribing public officials from various South African government departments and state-owned companies. Closing an intricate multijurisdictional investigation and coordinated settlement, which FRA forensic accounting experts supported over the course of two years, the company has agreed to:

• A three-year deferred prosecution agreement (DPA) with the US Department of Justice (DOJ) and over $220 million in fines and forfeiture (DOJ press release, January 10, 2024);
• A cease-and-desist order with the Securities and Exchange Commission (SEC);  
• A resolution of approximately $150 million with South Africa’s National Prosecuting Authority (NPA); and
• An obligation to report to the Fraud Section annually during the term of the DPA regarding remediation and implementation of compliance measures described in the DPA.

FRA was engaged by the client and counsel from Paul Hastings to review historic financial data, prepare profitability analyses, and present these analyses along with supporting arguments to the DOJ, SEC and their advisors.  FRA also consulted with Paul Hastings and SAP as the company took steps to enhance its internal controls environment in advance of the settlement, including controls related to both the sales and procurement cycles.

The value of cooperation

^{"SAP welcomes the conclusion of these matters and will fully comply with the terms of the agreements." - SAP press release, January 10, 2024}

In its press release, the DOJ noted that SAP was credited for its cooperation with the department’s investigation, citing numerous factors from early sharing of internal investigation findings to facilitating further independent investigation. The DOJ also noted SAP’s “timely remedial measures” that included conducting an analysis of the root causes of the underlying conduct and internal control gap assessment, and enhancing and expanding compliance monitoring and audit programs. A reduction in the criminal penalty calculated under the US Sentencing Guidelines was granted after taking into account these actions and the company’s prior history.  The Company also avoided the appointment of an independent compliance monitor, instead agreeing to a self-reporting obligation to certify its ongoing compliance obligations.

Coordination between authorities  

The DOJ will credit SAP up to $55.1 million on its criminal fine for any amount paid to resolve the South African investigations, and “up to the full forfeiture amount” of the disgorgement payment made to the SEC or South African authorities. For a fuller account of the detailed settlement arrangements, refer to the DOJ’s press release and reporting by Global Investigations Review.

^{“Today’s resolution—our second coordinated resolution with South African authorities in just over a year—marks an important moment in our ongoing fight against foreign bribery and corruption. We look forward to continuing to strengthen our relationship with South African authorities and others around the world.” - Acting Assistant Attorney General Nicole M. Argentieri, DOJ, 2024}

This trend of increasing international cooperation between national authorities has become a unique area of expertise for FRA disgorgement experts. FRA was also involved in the first coordinated resolution involving the US, South African and other authorities, in the headline case of ABB. With senior partners and rising specialists in this complex field based across our global locations, FRA’s expertise in disgorgement and penalty calculations has helped companies reach satisfactory resolution with authorities in mature and emerging markets.  

In addition, FRA’s experience advising clients on how to enhance their compliance and internal control environments and to meet the standards expected of global prosecutors, assists companies in avoiding or preparing for the appointment of a compliance monitor. Our advisory and monitorship experts also help companies prepare to effectively comply with other compliance reporting obligations.

Connect with the team that supported SAP to learn more: Toby Duthie, Neil Keenan, Rik Workman and Shaf Sohail.