SQM to pay $30m fine to US over political payments
Published: Thursday, 23 February 2017
The US-listed Chilean lithium and iodine producer will pay a fine of over $30m as it bids to settle a political payments enquiry with the US authorities.
Sociedad de Quimica y Minera SA (SQM), a major producer of
lithium, iodine and potash, will pay fines amounting to over
$30m as it bids to settle a long running investigation by the
US authorities into a political payments scandal.
The US Department of Justice (DoJ) and Securities and
Exchange Commission (SEC) will receive penalty payments of $15m
and roughly $15.5m, respectively, "in relation to the
investigations by such agencies of facts related to payments to
providers and entities that were tied to persons with political
exposure between 2008 and 2015", SQM outlined in a letter to
the Chilean Superintendent of Securities and Insurance (SVS),
dated 13 January and signed by the company chairman, Eugenio
|SQM will pay a fine
of over $30m to settle a long running stand-off with
the US authorities. (Source: David
The fact that SQM’s shares are traded publicly
in the US, via the New York Stock Exchange (NYSE), makes it
subject to US legislation.
As part of a long-running scandal in Chile, SQM has been
accused of making payments to politicians in order to receive
favourable treatment in legislation.
Through a deferred prosecution agreement (DPA), SQM has
agreed that the DoJ will file charges alleging a "failure to
implement effective internal accounting systems and internal
accounting controls" and "failure to maintain accurate books
The deferred nature of the agreement means that the DoJ will
not to pursue the charges against the company for a three
year period and will drop them subsequently, provided SQM
pays the fine and accepts external monitoring of its
compliance programme for two years.
An internal investigation conducted by SQM mitigated the
punishment, giving it a certain amount of "cooperation credit",
This investigation found no evidence that the company was
engaged in the bribery of public officials.
The SEC imposed similar terms to the DoJ and took account of
"corrective measures" taken by the company, including the
dismissal of its former CEO, Patricio Contesse, and the
creation of a corporate governance committee.
A spokesperson for SQM declined to comment on the matter
when contacted by IM.