ABB Ltd. was a Swiss-based global technology company with core businesses focused on electrification, automation, motion, and robotics. ABB operated in multiple countries around the world through subsidiaries. ABB stock was registered with the SEC and traded on the New York Stock Exchange. Among ABB's subsidiaries were ABB Management Services Ltd., located in Switzerland, that provided internal management services to local ABB operating entities; ABB South Africa (Pty) Ltd.; ABB S.p.A., located in Italy; and ABB AG, located in Germany.
According to the documents in this case, between 2014 and 2017, ABB conspired with others, including ABB Management Services, to make bribe payments to a high-ranking official at Eskom Holdings Limited, a South African state-owned energy company that operated to generate and transmit electricity in South Africa. In order to make the bribes to the South African official, ABB funneled money to unqualified subcontractors that the company understood would, in turn, make illicit payments to the official. ABB also produced false and misleading accounting documents and engaged in sham negotiations to reach pre-agreed prices on transactions in order to generate and conceal the funds used to provide benefits to South African official.
On December 2, 2022, the DOJ filed a single count information in the Eastern District of Virginia against ABB Management Services alleging a conspiracy to violate the antibribery provisions of the FCPA. On the same date, ABB Management Services entered into a plea agreement with the DOJ. Under the terms of the agreement, ABB Management Services agreed to pay a fine of $500,000, which would be part of the larger $315 million fine ABB agreed to in its deferred prosecution agreement with the DOJ. The DOJ noted ABB's cooperation and remediation but did not give the company credit for voluntarily disclosing the misconduct to the agency.
As part of the global settlement between ABB, the DOJ, the SEC, and the authorities in Switzerland and South Africa, ABB entered into a deferred prosecution agreement with with the DOJ on December 2, 2022. Under the terms of the agreement, ABB agreed to pay a fine of $315 million, which represented a 25 percent discount off the mid-point of the U.S. Sentencing Guidelines range, and to self-report on the status of the company's enhanced anticorruption compliance for three years. The $315 million fine included $500,000 paid by ABB South Africa and ABB Management Services in their separate enforcement actions, and the DOJ further agreed to credit $157.5 million paid to South African authorities, $11 million paid to Swiss authorities, $11 million paid to German authorities, and up to $63 million paid in civil penalties in the parallel SEC action. The DOJ noted ABB's cooperation and remediation but did not give the company credit for voluntarily disclosing the misconduct to the agency.
In a related administrative proceeding settled on December 3, 2022, the SEC ordered ABB to cease and desist violations of the antibribery, books and records, and internal controls provisions of the FCPA. Under the terms of the settlement, ABB agreed to pay disgorgement and interest of $72,554,267 and a civil fine of $75 million and to self-report on the status of the company's enhanced anticorruption compliance for a term of three years. The SEC deemed the disgorgement and interest to be satisfied by ABB’s reimbursement of its ill-gotten gains to the South African government as part of an earlier civil settlement based largely on the same underlying facts as this action. The SEC also noted ABB's cooperation and remediation.
