Panalpina World Transport (Holding) Ltd. ("PWT") was a global holding company located in Basel, Switzerland that provided global freight forwarding and logistics services in approximately 160 jurisdictions through a network of local subsidiaries, including Panalpina, Inc. and affiliated companies. Each of the subsidiaries was responsible for providing the freight forwarding and logistics services to customers and for coordinating with other Panalpina affiliated companies with respect to the importation of cargo shipped from abroad.
PWT operated in the U.S. through its wholly-owned subsidiary, Panalpina, Inc. Panalpina, Inc. provided air freight, ocean freight and supply chain management services primarily to customers in the oil and gas, healthcare, technology, retail, telecommunications and chemical industries. Panalpina World Transport (Nigeria) Limited ("Panalpina Nigeria"), a Nigerian corporation, was a majority-owned subsidiary of PWT until around 2008. Panalpina Nigeria was an affiliate and agent of Panalpina, Inc. and provided a wide variety of services for Panalpina, Inc.'s customers.
In order to assist some of its customers in circumventing custom and import laws and processes, between 2002 and 2007, Panalpina Nigeria, with the assistance of Panalpina, Inc., used a portion of the revenue generated from its customers' business to make payments to officials at the Nigerian Customs Service ("NCS"), a Nigerian government agency, in exchange for circumventing the local legal or regulatory requirements for the importation of goods. The charges for the improper payments made by Panalpina Nigeria were later invoiced to the customers with descriptions intended to aid the customers in concealing the nature of the improper payments in their books, records, and accounts. For example, the improper payments were described as "local processing fees," "interventions," "special handling" and "administration/transport charges," among other terms, when, in truth and fact, certain Panalpina, Inc. employees and the issuer-customers knew that the charges were bribes paid to Nigerian government officials.
On August 4, 2010, the DOJ filed a criminal Information in the Southern District of Texas, charging Panalpina Inc. with conspiracy to violate the books and records provisions of the FCPA, and aiding and abetting violations of the books and records provisions of the FCPA. At the same time, Panalpina Inc. entered into a plea agreement with the DOJ, agreeing to pay a $70,560,000 fine.
In a related action, PWT entered into a three year deferred prosecution agreement with the DOJ, and agreed to pay a penalty of $70,560,000. Under the terms of its DPA, any criminal penalty that is imposed by the Court and paid by Panalpina Inc. in connection with its guilty plea and plea agreement will be deducted from the $70,560,000 fine imposed on PWT.
