US fines Chile-based airline LATAM over bribes
Latin America?s largest airline has agreed to some US$22 million in civil and criminal fines in connection with a scheme to pay bribes to end a labour strike in Argentina a decade ago, United States authorities said.
Chile-based carrier LATAM will pay US$12.75 million to the US Justice Department and US$9.4 million, including interest, to the US Securities and Exchange Commission. The penalties stem from an investigation into payments made in 2006-07 by LAN airlines, which merged with Brazil?s TAM in 2012 to create LATAM.
The Justice Department said in a statement that LAN had entered into a ?fictitious US$1.15-million consulting agreement with an adviser to the Secretary of Argentina?s Ministry of Transportation.?
It said no consulting services were ever provided, and instead, the money was funnelled to union officials ?in exchange for the union agreeing to accept lower wages and to not enforce what would have been a costly labour rule?. LAN was said to have profited by over US$6.7 million, thanks to the bribes.
In a separate statement, LATAM acknowledged LAN violated accounting rules of the US Foreign Corrupt Practices Act and said it had agreed to retain an independent compliance monitor for 27 months.
LATAM reaffirmed its commitment to following the laws of all countries where it operates and said that ?from the time this event occurred, the company has taken action and made significant improvements in its compliance structure and its internal accounting controls?.
The case falls under US jurisdiction because LATAM?s stock is listed on the New York Stock Exchange.