In August 1990, the U.N. adopted Security Council Resolution 661, which prohibited U.N. member-states from transacting business with Iraq, except for the purchase and sale of humanitarian supplies. In April 1995, the U.N. adopted Security Council Resolution 986, a limited exception to Resolution 661 which allowed Iraq to sell its oil so long as the proceeds from oil sales were used by the Iraqi government to purchase humanitarian supplies for the Iraqi people. The U.N. controlled the proceeds from all sales of Iraqi oil and approved payments to suppliers of humanitarian goods. This program became known as the Oil for Food Program. Beginning in approximately August 2000, the Iraqi government demanded that suppliers of humanitarian goods pay a kickback, usually valued at 10% of the contract price, to the Government of the Republic of Iraq in order to be awarded a contract by the government. Suppliers often caused the U.N. to unknowingly fund these improper kickbacks by including the cost of the kickbacks in the contract price.
Renault Trucks SAS is a wholly owned French subsidiary of AB Volvo, a Swedish company that provides commercial transport solutions, including trucks, buses and construction equipment and is an issuer under the rules of the FCPA. From about November 2000 through about April 2003, Renault Trucks obtained approximately €61 million worth of contracts with various ministries of the government of the Republic of Iraq to supply several types of Renault Trucks vehicles and other equipment, pursuant to the U.N.'s Oil For Food Program in Iraq. To obtain these contracts, Renault Trucks paid and agreed to pay approximately $4.8 million in kickbacks to the government of Iraq.
On March 20, 2008, the DOJ filed a single count information against Renault for conpiracy to commit wire fraud and conspiracy to violate the Book and Records provision of the FCPA. On the same day, AB Volvo and the DOJ agreed to a deferred prosecution agreement. Pursuant to the agreement, AB Volvo agreed to pay a fine totaling $7 million for FCPA books and records and wire fraud violations committed by Renault Trucks SAS and VCEI, another subsidiary, and to implement and enhance its compliance programs.
In June 2011, the court granted the DOJ's motion to dismiss the case against Renault Trucks in light of AB Volvo's compliance with the DPA.
AB Volvo also entered into a consent agreement with the SEC. The company consented to the entry of a final judgment permanently enjoining it from future violations of Books & Records and Internal Controls provisions of the FCPA, to disgorgement $7,299,208 in profits plus $1,303,441 in pre-judgment interest, and to pay a civil penalty of $4,000,000.
