On August 20, 2020, Sociedad Química y Minera de Chile S.A. (SQM), a Chilean chemicals and mining company, disclosed in a regulatory filing that its January 2017 deferred prosecution agreement with the US Department of Justice had ended on April 30, 2020, and that on June 18, 2020, the DOJ had indicated that by October 30, 2020 it would file a motion to dismiss the criminal information against SQM with the US District Court for the District of Columbia. The Company explained that, subject to the court’s approval of the motion, all charges against the Company would be dismissed with prejudice.
SQM’s DPA stemmed from allegations that the Company had violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act. The allegations related to a discretionary fund maintained by the office of SQM’s CEO, which SQM recorded as being designated for, among other things, the CEO’s travel, certain publicity efforts, and certain consulting services. However, SQM knowingly and willfully failed to maintain proper internal controls designed to ensure that this discretionary fund was used for its intended purpose, and that its usage was properly recorded in SQM’s books and records. As a result of these failures, between 2008 and 2015, an unidentified SQM officer used the fund to make approximately $14.75 million in payments to Chilean politicians and political candidates, including payments to political campaigns and charitable foundations supported by these politicians, and payments to the politicians’ family members for providing fictitious services. To resolve the DOJ’s allegations related to this conduct, the company entered into the January 2017 DPA, in which it agreed to pay a criminal penalty of $15.5 million and to retain an independent monitor for two years.
The SEC also entered into an administrative settlement in January 2017 for the same misconduct, under which SQM agreed to cease and desist from the conduct and to pay an additional $15 million civil penalty.