Deferred Prosecution Agreement

Transcription

Case 0:16-cr-60195-DTKH Document 2 Entered on FLSD Docket 07/25/2016 Page 1 of 55
UNITED STATES DISTRICT C OU RT
FOR TH E SO U TH ERN D ISTRICT OF FLO RID A
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UN ITED STATES O F A M ERICA
V.
LA TA M A IRLINES GR O UP S.A.,
Defendant.
/
DEFERRED PR O SECU TIO N AG REEM ENT
DefendantLATAM AIRLm ESGROUP S.A.(theCtcompanf'),pursuanttoauthority
granted by the Com pany'sBoard ofD irectors,and the U nited StatesDepartm entofJustice,
CriminalDivision,FraudSection (thettoffice''l,enterintothisdeferredprosecutionagreement
(thetçAgreemenf).
C rim inalInform ation and Acceptance ofResponsibilitv
The Com pany acknow ledgesand agreesthatthe Office w illfile the attached twocountcriminalInform ation in theU nited StatesD istrictCourtforthe Southern D istrictofFlorida
charging theCompany with (i)violating theinternalcontrolsprovisionsoftheForeign Corrupt
PracticesActof1977(:EFCPA''),asamended,15U.S.C.jj78m(b)(2)(B),78m(b)(5),and
78ff(a);and(ii)violatingtheFCPA'Sbooksandrecordsprovisions,15U.S.C.jj78m(b)(2)(A),
78m(b)(5),and78ff(a).lnsodoing,theCompany:(a)knowinglywaivesitsrightto indictment
on thischarge,aswellasa11rightsto a speedy trialpursuantto the Sixth A m endm entto the
U nited StatesConstitution,Title 18,U nited Stm esCode,Section 3161,and FederalRule of
CriminalProcedure48(b);and(b)knowinglywaivesanyobjectionwithrespecttovenuetoany
chargesby theU nited Stdtesarising outofthe conductdescribed in the attached Statem entof
Factsand consentsto the fsling ofthe lnform ation,asprovided underthe term softhis
Agreem ent,in the United Su tesD istrictCourtforthe Southern D istrictofFlorida.
2.
The Company adm its,accepts,and acknow ledgesthatitis responsible under
U nited States1aw forthe actsofitsofficers,directors,employees,and agentsascharged in the
Inform ation,and assetforth in the attached Statem entofFacts,and thatthe allegations described
in the lnform ation and the factsdescribed in A ttachm entA aretrue and accurate. Should the
Offscepursue the prosecution thatisdeferred by thisAgreem ent,the Com pany stipulatesto the
adm issibility ofthe Statem entofFactsin any proceeding,including any trial,guilty plea,or
sentencing proceeding,and w illnotcontradictanything in the Statem entofFacts atany such
proceeding.
Term ofthe Aereem ent
ThisA greem entiseffective fora period beginning on the date on which the
lnfonuationisfiledandendingthree(3)yearsfrom thelaterofthedateonwhichthe
lnformation isfiled orthedateon which theindependentcompliancemonitor(thettM onitor'')is
relinedbytheCompany,asdescribedinParagraphsl1-13below (thetETenn'').TheCompany
agrees,how ever,that,in the eventthe Oftsce determ ines,in itssole discretion,thatthe Company
hasknowingly violated any provision ofthisA greement,an extension orextensionsofthe term
ofthe A greem entm ay be imposed by the O ffice,in its sole discretion,forup to a totaladditional
timeperiodofoneyear,withoutprejudicetotheOffice'srighttoproceedasprovidedin
Paragraphs 17-19 below . A ny extenjion ofthe Agreem entextendsallterm softhisAgreem ent,
including the term s ofthe m onitorship orreporting requirem entin A tlchm entD,foran
equivalentperiod. Conversely,in the eventthe Office finds,in its sole discretion,thatthere
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exists a change in circum stances sufficientto elim inate the need forthe m onitorship orreporting
requirem entin A ttachm entD ,and thatthe otherprovisionsofthisAgreem enthavebeen
satisfied,theTerm oftheAgreementmaybeterminatedearly.IftheCourtrejectsthe
Agreem ent,aIlthe provisionsofthe Agreem entshallbe deem ed nulland void,and the Term
shallbe deem ed to have notbegun.
R elevantConsiderations
4.
The O fficeentersinto thisA greem entbased on the individualfactsand
circum stancespresented by thiscase and the Com pany.Am ong the factorsconsidered w ere the
following'
.
(a)theCompanydidnottimelyvoluntarily disclosetheFCPA violationstotheOffice;it
began cooperating w ith the Oftice in the investigation of the m atteronly afterthe
publication ofpressreportsin Argentina appearing approxim ately fouryearsafterthe
crim inalconductin 2006-07 thatstated thatboth A rgentine and Chilean law
enforcem entofficialshad comm enced investigations ofthe conduct;
(b)becauseofthedelayed disclosure,potentially relevantevidencewas lostor
destroyed,including through the routine application ofda1 retention policies;
(c)theCompany fully cooperated with the Office'sinvestigation and providedall
relevantfactsknown to the Company,including inform ation aboutindividuals
involved in the m isconduct;
(d)theCompanyhadaninadequatecomplianceprogram atthetimeofthecriminal
conduct'
,
(e)theCompanynow hasdesigned and isimplementing acomplianceprogram and
system ofinternalaccounting controls,and hascom m itted to ensuring thatthese will
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continueto be implemented in a m annerthatsatisfiesthe elem entssetforth in
Attachm entC to thisAgreem ent;
(9 theCompanyhasfailedtoremediateadequately,includingsignificantlyby failingto
discipline in any w ay the employees responsible forthe crim inalconductrecounted in
the statem entoffactsattached hereto asA ttchm entA ,including m isconductby at
leastone high-levelCom pany executive,and thus the ability ofthe com pliance
program to be effective in practice iscom prom ised;
(g)thenatureand seriousnessoftheoffense,
(h)theCompany'spriorhistory,whichincludesaguiltypleabyitssubsidiaryLAN
Cargo in 2009 foritsinvolvem entfrom 2003 through 2006 in acrim inalconspiracy
to fix pricesin theairline cargo industry;
(i) theCompany hasagreed to continue tocooperatewiththeOfficeassetforth inthis
Agreem entin any investigation ofthe Company and itsofficers,directors,em ployees,
agents,businesspartners,and consultantsretating to violationsoftheFCPA ;
U) accordingly,afterconsidering(a)through(i)above,theCompanywillenterintoa
deferred prosecution agreem ent,pay a crim inalpenalty of25% above the low end of
U nited States Sentencing Guidelines range,and an independentcom pliance m onitbr
willbeimposedforaterm oftwentpseven(27)months,assetforthinthis
A greem ent.
Future Cooperation and D isclosure Requirem ents
The Company shallcooperate fully w ith the Office in any and aIlm attersrelating
to the conductdescribed in thisA greem entand Attachm entA and otherconductrelated to
possible corruptpaym ents,false books,rçcords,and accounts,orthe failure to implem ent
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adequateinternalaccountingcontrolsunderinvestigationbytheOffice,subjecttoapplicable1aw
and regulations,untilthe laterofthe date upon w hich allinvestigationsand prosecutionsarising
outofsuch conductare concluded,orthe end ofthe tenm specified in paragraph 3. Atthe
requestofthe Off-ice,the Com pany shallalso cooperate fully w ith otherdom estic orforeign 1aw
enforcem entand regulatory authoritiesand agencies,aswellasthe M ultilateralD evelopm ent
Banks(tûM DBs''),inany investigation oftheCompany,itsaffiliatesorrelated entities,orany of
itspresentorform erofficers,directors,em ployees,agents,and consultants,orany otherparty,in
any and allmatters relating to the conductdescribed in thisA greem entand A ttachm entA and
otherconductrelated to possible corruptpaym ents,false books,records,and accounts,orthe
failure to implementadequate internalaccounting controlsunderinvestigation by the O ftsce.
The Company agreesthatitscooperation pursuantto thisparagraph shallinclude,butnotbe
lim ited to,the follow ing:
The Com pany shalltruthfully disclose alIfactualinform ation not
protected by a valid claim ofattorney-clientprivilege orwork productdoctrine w ith respectto its
activities,those ofits aftsliatesand related entities,and those ofitspresentand form erdirectors,
officers,em ployees,agents,and consultants,including any evidenceorallegationsand internal
orexternalinvestigations,aboutw hich the Company hasany know ledge oraboutwhich the
O ffice may inquire. Thisobligation oftruthfuldisclosure includes,butisnotlim ited to,the
obligation ofthe Com pany to provide to the O ffice,upon request any docum ent,record orother
tangible evidence aboutwhich the Office m ay inquire ofthe Com pany.
b.
Upon requestofthe Office,the Com pany shalldesignate know ledgeable
em ployees,agents orattorneysto provide to the O fficethe inform ation and m aterials described
inParagraph5(a)aboveonbehalfoftheCompany.ltisfurtherunderstoodthattheCompany
m ustatalltim esprovide com plete,trtlthful,and accurate information.
The Company shalluse itsbestefforts to make available forinterviewsor
testim ony,asrequested by the Office,presentorform erofficers,directors,employees,agents
and consultantsofthe Company. Thisobligation includes,butisnotlim ited to,sw orn testim ony
beforeafederalgrandjuryorinfederaltrials,aswellasinterviewswithdomesticorforeign1aw
enforcem entand regulatory authorities. Cooperation underthisParagraph shallinclude
identification ofw itnesseswho,to the know ledge ofthe Com pany,m ay have m aterial
inform ation regarding the m attersunderinvestigation.
d.
W ith respectto any inform ation,testim ony,docum ents,records orother
tangible evidence provided to the O ftsce pursuantto thisAgreem ent,the Com pany consentsto
anyandaIldisclosures,subjecttoapplicablelaw andregulations,toothergovernmental
authorities,including United Statesauthoritiesand those ofa foreign governm ent,asw ellasthe
M DBS,ofsuch m aterials asthe Office,in itssole discretion,shalldeem appropriate.
6.
ln addition to the obligationsin Paragraph 5,during the Term ofthe A greem ent,
should the Company learn ofcredible evidence orallegationsofaviolation ofU.S.federallaw ,
the Com pany shallpromptly reportsuch evidence orallegationsto the Office.
Pavm entofM onetaa Penaltv
TheO ffice and the Com pany agree thatapplication ofthe United States
SentencingGuidelines(iûUSSG''ortEsentencingGuidelines'')todeterminetheapplicablefine
range yieldsthe follow ing analysis:
a.
The 2015 U SSG are applicable to this m atter.
b.
OffenseLevel.BaseduponUSSG j2B1.1,thetouloffenselevelis27,
calculated as follow s:
(a)(1)
BaseOffenseLevel
(b)(l)(J)
Valueofbenefitreceivedmorethan$3,500,000
+18
(b)(10)(B) ConductoutsidetheUnitedStates
TO TA L
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BaseFine.BaseduponUSSG j8C2.4(a)(l),thebasefineis$8,500,000
(thetineindicatedintheOffenseLevelFineTable)
d.
Culpability Score.Basedupon USSG j 8C2.5,the culpability scoreis6,
calculated asfollows:
(a)
BaseCulpabilityScore
(b)(3) theunitoftheorganizationwithinwhich
the offense was com m itted had 200 ormore
em ployeesand an individualwithin high-level
personnelofthe organization participated in,
condoned,orw as willfully ignorantefthe offense
(g)(2) Theorganizationfullycooperatedinthe
investigation,and clearly dem onstrated recognition
and affirm ative acceptance ofresponsibility forits
crim inalconduct
TOTAL
Calculation ofFine Rance:
Base Fine
$8,500,000
M ultipliers
l.20(min)/2.40(max)
Fine Range
$10,200,000- $20,400,000
TheCompany agreestopay amonetary penalty in theamountof$12,750,000 to theUnited
StatesTreasurywithinten(10)daysofthefilingoftheInformation.'rheCompanyandthe
O ffsce agree thatthispenalty isappropriate given the factsand circum stancesofthiscase,asset
forthabove.The$12,750,000penalty isfinaland shallnotberefunded.Furthermoresnothing
inthisAgreementshallbedeemed anagreementby the Oftk ethat$12,750,000 isthemaxim um
penalty thatm ay be imposed in any futureprosecution,and the Office isnotprecluded from
arguing in any future prosecution thatthe Courtshould im pose a higherf'
ine,although the Office
agreesthatunderthose circum stances,itwillrecom m end to the Courtthatany am ountpaid
underthis Agreementshould be offsetagainstany fine the Courtim poses aspartofa future
judgment.TheCompanyacknowlddgesthatnotaxdeductionmaybesoughtinconnectionwith
thepaymentofany partofthis$12,750,000penalty.
ConditionalRelease from Liabilitx
8.
SubjecttoParagraph l7-19,theOfficeagrees,exceptasprovidedinthis
A greem ent,thatitw illnotbring any crim inalorcivilcase againstthe Com pany relating to any
ofthe conductdescribed in the attached Statem entofFactsorthe crim inallnformation filed
pursuantto thisA greem entorforany otherconductbetween 2005 and 201lrelating to
furnishing oroffering gifts,travel,and entertainm entto governm entofficialsin Argentina that
the Com pany disclosed to the O fficepriorto the signing ofthisA greem ent. TheO ffice,
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however,m ay use any inform ation related to the conductdescribed in the attached Statem entof
FactsagainsttheCompany:(a)inaprosecutionforperjuryorobstructionofjustice;(b)ina
prosecutionformakingafalsestatement;(c)inaprosecutionorotherproceedingrelatingtoany
crimeofviolence;or(d)inaprosecutionorotherproceedingrelatingtoaviolationofany
provision ofTitle26oftheUnited StatesCode.
ThisA greem entdoes notprovide any protection againstprosecution for
any future conductby the Company.
ln addition,thisAgreem entdoesnotprovide any protection against
prosecution ofany individuals,regardlessoftheiraffiliation with the Company.
Corporate Com pliance Proeram
The Company represents thatithas im plem ented and w illcontinue to im plem ent
a compliance and ethicsprogram throughoutitsoperations,including those ofitsaffiliates,
agents,andjointventures,andthoseofitscontractorsandsubcontractorswhoseresponsibilities
include interacting with foreign officialsorotheractivitiescarrying a high risk ofcorruption,
designed to preventand detectviolations ofthe FCPA and otherapplicable anti-conuption Iaws.
10.
ln orderto addressany defk ienciesin its internalaccounting controls,policies,
and procedures,the Com pany representsthatithasundertaken,and w illcontinueto undertake in
the future,in a m annerconsistentw ith al1ofitsobligationsunderthis Agreem ent,a review ofits
existing internalaccounting controls,policies,and proceduresregarding com pliance w ith the
FCPA and otherapplicable anti-corruption law s. lfnecessary and appropriate,the Com pany will
adoptnew ormodify existing internalcontrols,policies,and proceduresin orderto ensure that
the Company maintains:(a)asystem ofinternalaccounting controlsdesigned to ensurethe
makingandkeepingoffairandaccuratebooks,records,andaccounts;and(b)rigorousanti9
corruption compliance code,standards,and proceduresdesigned to detectand deterviolationsof
the FC PA andotherapplicableanti-corruption laws.Theinternalaccounting controlssystem
and com pliance code,standards,and procedures willinclude,butnotbe lim ited to,the m inim um
elem entssetforth in Atu chm entC.
IndenendentCom pliance M onitor
Prom ptly afterthe O ffice'sselection pursuantto Paragraph 12 below ,the
Company agreesto retain aM onitorfortheterm specified in Paragraph l3. The M onitor's
dutiesand authority,and the obligationsofthe Com pany w ith respectto the M onitorand the
O ffice,are setforth in Attachm entD ,w hich isincorporated by reference into thisAgreem ent.
W ithinthirty(30)calendardaysaftertheexecutionofthisAgreement,andafterconsultation
withtheOffice,theCompanywillproposetotheOfficeapoolofthree(3)qualifiedcandidates
to serve asthe M onitor.'Ifthe Office deterlnines,in itssole discretion,thatany ofthe candidates
are not,in fact,qualified to serve asthe M onitor,orifthe O ffice,in its sole discretion,is not
satisfied with the candidatesproposed,the Office reservesthe rightto seek additional
nom inatipnsfrom the Company. The M onitorcandidatesortheirteam m embersshallhave,ata
m inim um ,the follow ing qualifications:
a.
demonstrated expertise w ith respectto the FCPA and otherapplicable
anti-corruption law s,including experience counseling on FCPA issues'
,
b.
experiencedesigning and/orreviewing comoratecompliancepolicies,
procedures and internalcontrols,including FCPA and anti-corruption policies,procedures and
internalcontrols;
the ability to accessand deploy resourcesas necessary to discharge the
M onitor'sdutiesasdescribed intheAgreement;and
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d.
sufficientindependencefrom theCompanyto ensure effectiveand
impartialperformance oftheM onitor'sdutiesasdescribedin theAgreement.
l2.
TheOffkeretainstheright,in itssolediscretion,to choosetheM onitorfrom
am ong the candidatesproposed by the Com pany,though the Com pany m ay express its
preferencets)amongthecandidates.lntheeventthcOfficerejectsa1lproposedM onitors,the
Company shallproposeanadditionalthreecandidateswithinthirty(30)calendardaysafter
receivingnoticeoftherejection.ThisprocessshallcontinueuntilaMonitoracceptabletoboth
parties ischosen.The Office and the Com pany w illuse theirbesteffortsto complete the
selectionprocesswithinsixty(60)calendardaysofthetilingoftheAgreementandthe
accom panying Inform ation.
lftheM onitorresignsorisothenvise unable to fulfillhis orher
obligationsassetouthereinandinAttachmentD,theCompanyshallwithinthirty(30)calendar
daysrecommend apoolofthreequalifiedM onitorcandidatesfrom which theOfficew illchoose
a replacement.
13. TheM onitor'sterm shallbetwenty-seven(27)monthsfrom thedateonwhichthe
M onitorisrelinedbytheCompany,subjecttoextensionasdescribedinParagraph3.The
M onitor'spow ers,duties,and responsibilities,asw ellas additionalcircum stances thatm ay
supportan extension ofthe M onitor'sterm ,are setforth in Attachm entD . The Com pany agrees
thatitw illnotem ploy orbe affiliated w ith the M onitororthe M onitor's flrm fora period ofnot
lessthantwo(2)yearsfrom thedateonwhichtheM onitor'sterm expires.Norwillthe
Com pany discussw ith the M onitororthe M onitor'sûrm the possibility offurtherem ploym ent
oraffiliation during the M onitor'sterm .
14.
A fterthe conclusion ofthe m onitorship,provided allrequirem entssetforth in
Paragraph 8 ofAttachm entD are m et,the Com pany w illreporton itscompliance to the Office
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once,with such reportbeing due tw o m onthspriorto the com pletion ofthe Term .ofthis
Agreem ent,regarding rem ediation and im plem enl tion ofthe enhanced com pliance m easuresset
forthbytheMonitoras(iescribedinParagraph#ofAttachmentD.TheCompanyshall
designate a seniorcom pany officerasthe person responsible foroverseeing the Company's
corporatecompliance reporting obligations. Duringthisperiod,theCompanyshallconductand
preparethereview and reporq asdescribedbelow :
a.
The Com pany shallundertake the review im lnediately atthe end ofthe
m onitorship,and shallincom orate the Office's viewsand com m ents on the m onitor'sprior
review sand reports,to detennine w hetherthes
policiesand procedures ofthe Com pany are
reasonably designed to detectand preventviolationsofthe FCPA and otherapplicable
anticorruption laws. The reportshallbe transm itted to the FCPA Chief,Fraud Section,Crim inal
Division,U .S.Departm entofJustice,1400 N ew York Avenue,W ashington,D .C.20005.
b.
The review and reportshallbe com pleted by no laterthan two-hundred-
ten(210)calendardaysaftertheapprovalbytheOfficeoftheenhanced compliancemeasures
described in Paragraph 8 ofAttachm entD . Thatreportshallbe com pleted and delivered to the
Officenolaterthansixty(60)daysbeforetheendoftheTerm.
The Com pany m ay extend the tim e period forsubm ission ofthe report
w ith priorwritten approvalofthe Office.
Deferred Prosecution
15.
Inconsiderationof:(a)thepastandfuturecooperationoftheCompany
describedinParagraphs4and5above;(b)theCompany'spaymentofacriminalpenaltyof
$12,750,000;and(c)theCompany'simplementationandmaintenanceofremedialmeasuresas
described in Paragraphs 9 and 10 above,the Office agrees thatany prosecution ofthe Com pany
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forthe conductsetforth in the attached Statem entofFacts and lnfonnation beand llereby is
deferredfortheTerm ofthisAgreement.
16. The O ftsce furtheragreesthatifthe Company fully com pliesw ith aIlofits
obligations underthisA greement,the Office willnotcontinuethe crim inalprosecution against
the Com pany described in Paragraph 1and,atthe conclusion ofthe Term ,thisA greem entshall
expire.W ithinsix(6)monthsoftheAgreement'sexpiration,theOfficeshallseekdismissal
withprejudiceofthecriminallnformationfiledagainsttheCompanydescribed inParagraph1,
and agreesnotto file chargesin the future againstthe Com pany based on the conductdescribed
in thisA greem entand Attachm entA orthe lnform ation orforotherconductbetwecn 2005 and
201lrelating to funzishing oroffering gifts,travel,and entertainm entto governmentoftscials in
A rgentina thatthe Com pany disclosed to the O ffice priorto the signing ofthisA greem ent.
Breach ofthe A ereem ent
If,during theTerm ofthisAgreement,theCompany (a)com mitsany felony
underU.S.federallaw;(b)providesinconnectionwiththisAgreementdeliberatelyfalse,
incom plete,orm isleading inform ation,including in connection with itsdisclosure ofinform ation
aboutindividualculpability;(c)failstocooperateassetforthinParagraphs5and6ofthis
Agreement;(d)failstoimplementacomplianceprogram assetforthinParagraphs9and l0of
thisAgreementandAttachmentC;(e)commitsanyactsthatshadtheyoccurredwithinthe
jurisdictionalreachoftheFCPA,wouldbeaviolationoftheFCPA;or(8 othenvisefails
specifically to perform orto fulfsllcom pletely each ofthe Com pany'sobligationsunderthe
A greem entsregardlessofw hetherthe Office becom es aware ofsuch a breach afterthe Term of
theAgreementiscomplete,theCompanyshallthereafterbesubjecttoprosecutionforany
federalcrim inalviolation ofwhich the O ffice hasknow ledge,in'
cluding,butnotlim ited to,the
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charges in the lnform ation described in Paragraph 1,which m ay be pursued by the Office in the
U.S.DistrictCourtfortheSouthern DistrictofFloridaorany otherappropriatevenue.
Determ ination ofw hetherthe Com pany hasbreached theA greem entand w hetherto pursue
prosecution ofthe Com pany shallbe in the Office's sole discretion. Any such prosecution m ay
beprem ised on infonnation provided by the Com pany oritspersonnel. Any such prosecution
relating to the conductdescribed in the attached Statem entofFactsorrelating to conductknow n
*
to the Office priorto the date on
which thisA greem entwas signed thatisnottim e-barred by the
applicable statute oflim itationson the date ofthe signing ofthisA greementm ay be com m enced
againstthe Com pany,notw ithstanding theexpiration ofthe statute ofIilnitations,between the
signing ofthisA greem entand the expiration oftheTerm plus one year. Thus,by signing this
Agreem ent,the Com pany agreesthatthe statute of lim itationsw ith respectto any such
prosecution thatisnottim e-barred on the date ofthe signing ofthisA greem entshallbe tolled for
the Ten'
n plusone year. ln addition,the Company agreesthatthe statute oflim itations asto any
violation offederallaw thatoccursduring the Term w illbe tolled ffom the date upon which the
violation occursuntilthe earlierofthe date upon which the Officeism ade aw are ofthe violation
orthe duration ofthe Term plus fiveyears,and thatthisperiod shallbe excluded from any
calculation oftim e forpurposes ofthe application ofthe statute oflim itations.
ln the eventtheO ffice determ inesthatthe Com pany hasbreached this
Agreem ent,the Office agreesto provide the Com pany w ith written notice priorto instituting any
prosecutionresultingfrom suchbreach.W ithinthirty(30)daysofreceiptofsuchnotice,the
Com pany shallhavethe opportunity to respond to the Office in w riting to explain the nature and
circum stancejofthe breach,aswellasthe actionsthe Com pany hastaken to addressand
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remediate the sisuation,which the O ftice shallcolzsiderin determ ining w hetherto pufùue
prosecution ofthe Com pany.
19.
In the eventthatthe Office determ inesthatthe Com pany has breached this
Agreem ent: (a)alIktatementsmadeby oron behalfoftheCompanytotheOfficeorto the
Courqincluding theattached StatementofFacts,and any testimony givenby theCompany
beforeagrandjury,acourt,oranytribunal,oratanylegislativehearings,whetherprioror
subsequentto thisA greem ent,and any leadsderived from such statem entsortestim ony,shallbe
adm issible in evidence in any and alIcrim inalproceedings broughtby the Office againstthe
Company;and (b)theCompany shallnotaqsertanyclaim undertheUnited StatesConstitution,
Rule1l(9 oftheFederalRulesofCriminalProcedure,Rule410oftheFederalRulesof
Evidence,orany otherfederalrule thatany such statem ents ortestim ony m ade by oron behalfof
the Com pany priororsubsequentto thisA greem ent,orany leadsderived therefrom ,should be
suppressed orareothenviseinadm issible. The decision whetherconductor statementsofany
currentdirector,officeroremployee,orany person acting on behalfof,oratthe direction of,the
Company,w illbe im puted to the Com pany forthe purpose ofdeterm ining whethertheCom pany
hasviolated any provision ofthis Agreem entshallbe in the sole discretion ofthe O ffice.
The Company acknowledgesthatthe Office hasm ade no representations,
assurances,orprom isesconcerning whatsentence may be im posed by the Courtifthe Company
breachesthisAgreementandthismatterproceedstojudgment.TheCompanyfurther
acknow ledgesthatany such sentence is solely within the discretion ofthe Courtand thatnothing
in thisA greem entbindsorrestrictsthe Courtin the exercise ofsuch discretion.
Thirty(30)daysaftertheexpirationoftheperiodofdeferredprosecution
specified in thisA greement,the Com pany,by the ChiefExecutive Officerofthe Com pany and
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the ChiefFinancialO fticerofthe Com pany,w illcertify to the D epartm entthatthe Com pany has
m etitsdisclosure obligationspursuantto Paragraph 6 ofthisAgreem ent. Each certification w ill
be deem ed a materialsutem entand representation by the Company to the executive branch of
theUnitedStatesforpurposesof18U.S.C.j 1001,anditwillbedeemedtohavebeenmadein
thejudicialdistrictinwhichthisAgreementisfiled.
Sale.M eraer.or O therC hanee in Corporate Form ofC om panv
22.
Exceptasm ay otherwise be agreed by the Company and the Office in connection
withaparticulartransaction,theCompanyajreesthat,intheeventthat,duringtheTerm ofthe
Agreem ent,itundertakesany change in corporate form ,including ifitsells,m erges,ortransfers
a substantialportion ofits business operations asthey existasofthe date ofthisA greem ents
whethersuch sale is structured asa sale,assetsale,m erger,transfer,orotherchange in com orate
form ,itshallinclude in any contractforsale,m erger,transfer,orotherchange in com orate form
aprovision binding the purchaser,orany successorin interest,to the obligationsdescribed in this
Agreement.TheCompanyshallobtainapprovalfrom theOfficeatleastthirty(30)dayspriorto
itor itsBoard ofDirectorsproposing to its shareholdersthe undertaking ofany such sale,
m erger,transfer,orotherchange in corporate form ,including dissolution,in orderto give the
Office an opportunity to determ ine ifsuch change in cprporate form would affectthe term sor
obligationsofthe A greem ent. Ifthe Company concludesthatin particularcircum stances
complying w ith the previous sentence w ould place itin violation ofChilean Iaw ,the Company
shallprom ptly notify the O ffice ofsuch conclusion,and the Com pany and the O ffice w illseek to
reach agreem enton how to proceed;in no event,however,w illthe Com pany proceed to close
16
any transaction thatresults in a change in com orate form priorto reaching an agreem entw ith the
Office.
Public Statem entsbv Com panv
The Company expressly agrees thatitshallnot,through presentorfuture
attorneys,officers,directors,em ployees,agents orany otherperson authorized to speak forthe
Com pany make any public statem ent,in litigation orotherw ise,contradicting the acceptance of
responsibility by the Com pany setforth above orthe factsdescribed in the atl ched Statem entof
Facts.Anysuchcontradictorystatementshall,subjecttocurerightsoftheCompanydescribed
below,constituteabreachofthisAgreement,andtheComh
panythereaftershallbesubjectto
prosecution assetforth in Paragraphs l7-19 ofthis Agreem ent. The decision whetherany
public statementby any such person contradicting a factcontained in the Statem entofFactsw ill
be im puted to the Com pany forthe purpose ofdeterm ining whetherithasbreached this
A greem entshallbe atthe sole discretion ofthe O ffice. lfthe Office determ inesthata public
statem entby any such person contradicts in w hole orin parta statem entcontained in the
Statem entofFacts,the O ffice shallgo notify the Company,and the Com pany m ay avoid a
breach ofthisAgreementbypublicly repudiating such statementts)within five(5)businessdays
afternotification. The Com pany shallbe perm itted to raise defensesand to assertaftirmative
claims in otherproceedingsrelating to the m atterssetforth in the Statem entofFactsprovided
thatsuch defensesand claim sdo notcontradict,in whole orin part,a statem entcontained in the
Statem entofFacts. ThisParagraph doesnotapply to any statem entm ade by any presentor
form erofficer,director,employee,oragentofthe Com pany in the course ofany crim inal,
regulatory,orcivilcase initiated againstsuch individualsunlesssuch individualisspeaking on
behalfofthe Company.
l7
24.
The Com pally agreesthatifitor any ofits directorindirectsubsidiariesor
affiliatesissuesapressrelease orholdsany pressconference in connection with thisA greement,
theCompanyshallfirstconsultwiththeOfficetodetermine(a)whetherthetextofthereleaseor
proposed statem entsatthepresscénference are true and accurate w ith respectto matters between
theOfficeandtheCompany;and(b)whethertheOfficehasanyobjectiontotherelease.
The Office agrees,ifrequested to do so,to bring to the attention oflaw
enforcem entand regulatory authoritiesthe facts and circum stancesrelating to thenature ofthe
conductunderlying thisA greem ent,including the nature and quality ofthe Company's
cooperation and rem ediation. By agreeing to provide thisinform ation to such authorities,the
O ffice isnotagreeing to advocate on behalfofthe Com pany,butratheris agreeing to provide
factsto be evaluated independently by such authorities.
Lim itationson BindineFcffectofAereem ent
26.
ThisA greem entisbinding on the Com pany and the Officebutspecifically does
notbind any othercomponentofthe Departm entofJustice,otherfederalagencies,orany state,
localorforeign law enforcem entorregulatory agencies,orany otherauthorities,although the
O ffice w illbring the cooperation ofthe Com pany and itscom pliancew ith itsotherobligations
underthisA greem entto the attention ofsuch agenciesand authorities ifrequested to do so by
the Com pany.
N otice
27.
Any notice to the O ffice underthisA greem entshallbe given by personal
delivery,overnightdelivery by arecognized delivery service,orregistered orcertified mail,
addressed to FCPA Chief,Fraud Section,Crim inalD ivision,U .S.Departm entofJustice,1400
N ew Y ork A venue,W aslzington,D .C .20005.Any notice to the Company underthisA greement
18
shallbe given by personaldelivery,overnightdelivèry by a recognized delivery service,or
registered orcertified m ail,addressed to Claudio Salas, 7 W orld Trade Centers250 Greenwich
Street,N ew Y ork,N ew York 10007.N otice shallbe effective upon actualreceiptby the Office
orthe Company.
Com plete Aereem ent
28.
ThisA greement,including its attachm ents,setsfol'th allthe term softhe
agreem entbetween the Com pany and the O ftice. N o am endments,m odiGcationsoradditionsto
19
thisAgTetmentslmllbevalid unlesstlwy are in writing and siganed by theOftke,theattom eys
fortheCom pany and adulyauthorized representativeoftheCompany.
AGREED:
FOR IA TAM AIRLINES GROUP S.A .:
o-te,7 1
26,
13*
.
By: MdresOsorio Her-mansen
LATAM AIRLIN ES GROUP S.A.
*
alzs-lllo
'
Date:
SX:
j
#- . 1 .
RogerM .W itten
W ilmerCutlerPickeringHaleand DolT
LLP
FOR THE DEPARTM ENT OF JUSTICE:
Andrew W eissmamt
Cbief,Fraud Section
Crim inalDivision
United StatesDepnrtmentofJustice
Date;-/l-s.
se/tke
i'
BY:
20
l
w
Jason inder
Sczti rTHalAttom ey
trx
COM PAN Y OITICER 'S CAIRVI'I>ICA'
FE
1havereadthisAveementand carefullyreviewed everypartofitwith outsidecounsel
forLatam AirlinesGroupS.A.(theX ompany''l.1understandthetermsofthisAgreementand
voluntarily agree,on behalfofthe Com pany,to each ofitsterm s. Before signing tbis
Agreement,Iconsultedoutidecounselforthe Company.Cotmselfully advised meoftherights
oftheCom pany,ofpossible defenses,ofthe Sentencing Guidelines'provisions,and ofthe
consequencesofentering into thisAp eem ent.
1have catefully reviewed thctcrm softhisA greem entw ith theBoard ofD irectors ofthe
Company.lhaveadvised andcam ed outsidecounselfortheCompanyto advisotheBoardof
Directorsfully oftherightsoftheCompany,ofpossibledefenses,oftheSentencing Cyuidelines'
provisions,and ofthe consequencesofentering into the Agreem ent.
Nopromisesorinducementshavebeen madeotherthanthosecontainedinthis
A greem ent. Furtherm ore,no one hmqtbreatened orforoed m e,orto m y knowledge any person
authorizingthisAgreementonbehalfoftheCompmm in anywaytoenterintothisApeement.
Iam alsosatissedwith outsidecounsel'srepresentation inthism atter.Icert'
tfythatIam the
CFO forthe Company and i atIhavebeen duly autborized by the Com pany to execute this
Agv m enton behalfofthe Company.
Date:7 zf )l$
LATAM
(A O
By:
An
- dres Osono H erm ansen
cFO
.A.
'
CER TIFICATE O F C O UN SEL
Iam counselforLatam AirlinesGroup S.A.(theitcompany'')inthemattercoveredby
this Agreem ent. ln connection with such representation,Ihave exam ined relevantCom pany
documentsandhavè'disiussed theterm softhisAgreembnfk iththe Company Boardof
Directors. Based on ourreview ofthe foregoing m aterialsand discussions,1am ofthe opinion
thatthe representative ofthe Com pany hasbeen duly authorized to enterinto thisA greem enton
behalfofthe Com pany and thatthis Agreem enthas been duly and validly authorized,executcd,
and delivered onbehalfofthe Company and isavalidand bindingobligation oftheCompany.
Further,lhavecarefully reviewed the term s ofthisA greem entwith the Board ofDirectorsand
the CFO ofthe Com pany. lhave fully advised them ofthe rightsofthe Com pany,ofpossible
defenses,oftheSentencing Guidelines'provisionsand ofthe consequencesofentering into this#
w
A greem ent. To m y knowledge,the decision ofthe Company to enterinto thisA greem ent,bascd
on the authorization ofthe Board ofDirectors,is an inform ed and voluntary one.
,
oate:7/2Ljytv
-
By: fozr
m zpp.p';.
zy
RogerM .W itten
WilmerCutlerPickeringHaleandDorrLLP
CounselforLatam A irllnes Group S.A .
A TTA CHM EN T A
STATEM EN T OF FA CTS
Thefollow ing Statem entofFactsisincom orated by reference as pal4 ofthe Deferred
u.
.
ProsecutionAgreementy(
ihetjjAgr
eementyy)betweentheUnitedStatesDepartmentofJustice,
CriminalDivision,FraudSection(thetioffice'')andLatam AirlinesGroupS.A.CtLATAM'')as
successor-in-interesttoLAN AirlinesS.A.(t1LAN'').LATAM herebyagreesandstipulatesthat
the follow ing inform ation istrue and accurate. LATAM adm its,accepts,and acknowledgesthat
itisresponsible forthe acts ofitsoffscers,directors,employees,and agents,aswellas forthe
actsoftheofficers,directors,em ployees,and agentsofLAN asitspredecessor-in-interest,as set
4
forth below . Should the Oftk epursue theprosecution thatis deferred by this Agreem ent,
LATAM agreesthatitw illneithercontestthe adm issibility of,norcontradict,thisStatem entof
Factsin any such proceeding. The following facts establish beyond a reasonable doubtthe
charges setfbrth in the crim inallnform ation attached to thisAgreem ent:
LAN and OtherRelevantEntitics and Individuals
LAN w as,until2012,an airline com pany incorporated and headquartered in Chile
thatprovided passengerand cargo transportation throughoutSouth and CentralA merica,asw ell
asto the United States,Europesand A ustralia. D uring the relevantperiod,LAN had annual
revenuesofapproxim ately $3.5 billion.Until2012,sharesofLAN'Sstocktradedon theNew
YorkStockExchangeC4NYSE'')asAmericandepositoryreceipts(&éADRs'')5andLAN was
required to fileperiodic reportsw ith the Securities and Exchange Com m ission underSection
l5(d)oftheSecuritiesExchangeAct,15 U.S.C.j78o(d).Accordingly,LAN wasan ktissuer''as
thatterm isusedintheForeignCorruptPracticesAct(tTCPA''),Titlel5,UnitedStatesCode,
Section 78m . ln June 2012,LAN becam e LA TAM afterm erging w ith TAM S.A . Afterthe
m erger,LATAM 'Ssharestraded on the N YSE asA DRS,and LATAM wasrequired to file
periodicreportswiththeSecuritiesandExchangeCommissionunderSection l5(d)ofthe
SecuritiesExchangeAct,15U.S.C.j78o(d).Accordingly,LATAM wasanissuerwithinthe
m eaning oftheFCPA ,Title l5,U nited States Code,Section 78m . LATAM w as incorporated
and headquartered in Chile.
Untilthe 2012 m erger,LAN Cargo wasa subsidiary ofLAN ;thereafter,itwasa
subsidiary ofLATA M . LAN Cargo wasincorporated in Chile,headquartered in M iam i,Florida,
and had severalotheroffices in the U nited States. Itprovided cargo transportation w ithin South
and CentralAm erica,and between South and CentralAm erica and the restofthe w orld.
Untilthe20l2merger,AtlanticAviationInvestmentsLLC (téAAl'')wasa
subsidiary ofLAN ;thereafter itwas a subsidiary ofLA TAM . AA 1wasincorporated in
D elaware and headquartered in Chile. A Al'sfinancialstatem entsw ere consolidated into the
financialstatem entsofLAN and laterLATA M .
StLAN Executive,''an individualwhose identity isknow n to the United States,
wasa high-levelexecutiveatLA N .
tûLAN Cargo Executive,''an individualwhose identity isknown to the U nited
States,was a high-levelExecutiveatLAN Cargo during the relevantperiod. LAN Cargo
Executive was responsible,along w ith LAN Executive and otherLAN executives,forleading
LA N 'Sentry into the Argentine airline m arketduring the relevantperiod. LAN Cargo Executive
w asbased in M iam i,Florida,and wasa United Su tescitizen.
6.
ttconsulunt,''''an individualwhose identify isknown to the United States,wasan
advisorto the Secretary ofA rgentina'sM inistry ofTransportation during the relevantperiod. He
wasappointed to thatposition pursuantto an unpublished resolution.
A -2
ILAN 'S Fa/ry into theA rgentlneM arket
LAN soughtentry into the A rgentine com m ercialairline m arketin the early
2000s. Atthe tim e,Argentina prohibited foreign-ow ned airlines from operating in the country,
so LAN looked fora localArgentinecorfipany in which itcouldacquirea minority interest.
ln 2004 and 2005,LAN engaged in discussionswith governm entofficialsfrom
A rgentina'sM inistry ofTransportation abouta variety of issuessurrounding itsentry into the
market,including:(a)which localairline itcould acquire (thegovem menthadtoapproveits
acquisition);(b)revisingthelaw topennitLAN toownamajorityofthatcompany;(c)granting
LAN additionalroutesw ithin Argentina itcould operate once ithad established operationsin the
country;(d)raisingthemaximum allowableticketprices,whichweresetbythegovernment'
,and
(e)laborissuesthataroseafteritenteredthemarket.
9.
By early 2005,LAN had agreed w ith offlcials from the Argentine M inistry of
Transportation thatitwould acquire the defunctArgentine airline,A ero 2000,w hich had no
active operations. A spartofthatagreem ent,LA N also agreed to em ploy the laborforcesfrom
two otherdefunctairlines,LA FSA and Southern W inds. ln return forthatcom m itment,
Argentine governm entofficialsagreed thatthe officialswould revise the law so thatLAN could
ownamajorityoftheairlineithadacquired,wouldraisethecaponmaximum airfares,and
would grantLAN additionaldom estic routes.
How ever,LAN 'Srelationship with the laborunionsrepresenting itsinherited
workforce began deteriorating during thistim e fram e. The tension focused on the so-called ttone
function rule,''which m andated thateach employee could engage in only one,narrow ly-defined
type ofwork. A lthough LAN 'SIaborunionsdid notstrictly enforce the rule in practice,the
A-3
unionsthreatened to do so,which w ould have had the effectofsignificantly increasing LA N 'S
Iaborexpenses.
The Ffc/ftfolu Consulting Agreem ent
14.
ln Septeihberand October2006,LAN negotiatedand executedafictitious$1.15
m illion consulting agreem entwith Consultant,through a com pany he ow ned and operated,in
orderto funnelbribes to labor union officials. A sa resultofthese corruptpaym ents,LAN 'S
unionshad agreed notto enforce the one function rule fora period ofyearsand had accepted
substantially lowerwage increasesthan they had been dem anding.
15.
LAN Cargo Executive negotiated the fk titiousagreem entw ith Consultanton
behalfofLA N ,while keeping LAN Executive informed ofthe negotiation'sprogress. On
Septem ber23,2006,forexample,LA N Cargo ExecutivesentLAN Executive an em ailw ith the
subjectlineGsropicclosedforthemoment.'' ln it,LAN CargoExecutiveadvisedLAN
Executivethatttgtlhecostwouldbel,000plus15%,55witht:1/3tobepaidimmediately,another
l/3 in 30 and 60 days. lexpectOct llm ov lland D ec 11.''
O n October2,2006,Consultantem ailed LAN Cargo Executive a draftofthe
agreem ent,copying a high-levelofficialin the M inistry ofTransportation. Am ong other
responsibilities,the high-leveloffk ialwas involved in LAN 'Snegotiationswith itsIaborunions.
The draftagreem entbetween LAN and Consull nt'scompany stated that
Consultant'scom pany t:isspecialized and hasbroad experience in providing advisory serviceson
thesubjectoftransportationintheArgentineRepublicandtheregion....''Underthetermsof
thedraftagreem ent,the consulting com pany purportedly w asto:
undertake a study ofexisting airroutes in theA rgentine Republic
and the regionalm arket,including those being serviced by
differentairlines,as wellasthose w ith no service available at
A -4
present. The study m izktinclude,am ong otherdata:each ofthe
pointsto be connected by each ofthe routes,possible
combinatlons,eventualconnections,estimatedpassengervolumes
throughoutthe year,especially differentiating w eekdaysfrom
weekends,andparticularlythosedominated(siclaslong
w eekends. Thisstudy m ustinclude an estim ate ofthepotentialair
cargö dem andsforeach ofthe routes.
18.
Further,the draftagreem entcontem plated thatConsultant's com pany w ould
perform legalanalysisonLAN'Sbehalf:ktlwlithintheframeworkoftheIaw governingPublicPrivatePartnerships(PPP)intheArgentineRepublic,(LANIassigns(Consultant'scompanylthe
task ofstudying and analyzing said Iaw and itspotentialapplication to the differentservices
providedby(LAN).''ThedraftagreementgaveConsultant'scompanyuptoninetydaysttto
deliverthe study w ith the requested services.''
l9.
In exchange forthese purported services,the draftagreem entprovided thatLA N
would pay Consultant'scompany $4afixedsum ofUS$ l,150,00095payablein fourinstallments:
$300,000on signing;$300,000atboth thirty and sixty daysaftersigning;andthe rem aining
$250,000paid ninety daysaftersigning.
LAN Cargo Executive forwarded the draftagreem entto LAN Executive on
October3,2006,the day afterLAN Cargo Executive had received it. LAN Cargo Executive
reached agreementw ith Consuluntand LA N Executive approved iteven though they both knew
thatthe draftagreement'sdescription ofthe servicesthatConsultant's com pany w ould provide
w ere false. Rather,both understood thatthe true pum ose ofthe draftagreem entwasto use
Consultantto intercede on LAN 'Sbehalfwith the ofûcialsofitsA rgentine laborunions.
FurthersLAN Cargo Executive knew and intended thatConsultantwould use som e ofthe m oney
he received underthe draftagrqem entto bribe union officialsto acceptterm sm ore favorable to
A -5
.
LA N . LAN Executive also understood thatConsultantm ightpasssom e ofthe money he'wôtlld
be paid underthe draftagreem entto union officials.
2l.
LAN and Consultant'scom pany neverfully signed and executed the fictitious
consulting agreem ent,and neitherthe Consultantnoranyone else affiliated w ith hiscom pany
everperform ed any ofthe services specified in the draftagreem ent. Despite the absenceofa
fully executed agreem entand despite the failure ofConsultant'scom pany to perform the services
specified in the draftagreem ent,Consultnt'scom pany invoiced LAN forpaym entunderthe
draftagreem entand a LA N affiliate paid those invoices.
22.
On October 18,2006,Consultantem ailed LAN Cargo Executive an invoice from
hiscompanytoLAN for$300,000tElfjorconsultingservicesprovidedbyandpayabletoyou
undercontractsigned by both parties.'' ltdirected thatpaym entbe m ade to a W achovia account
in Roanoke,V irginia,held in the name ofConsultantand hisw ife,notin the nam eofhis
company. LAN paid thisinvoice from itsCitibank accountin N ew Y ork,on behalfofAA I, even
though(i)thecontracthadneverbeensigned,(ii)thefirstinvoicehadbeendirectedtoLAN (not
AAl),(iii)theunsignedagreementhadbeenbetweenConsultant'scompanyandLAN,notAAI,
and(iv)itwasnotacompanybankaccountreceivingthefunds.LAN CargoExecutivedirected
Consultantto addressrem aining invoicesto A Al,notLA N .
23. tlnNovember21,2006,andJanuary 16,2007,Consultantemailedtwoadditional
invoicesto LAN Cargo Executive,thefirstfor$300,000and thesecond for$550,000.80th
invoices were addressed to A AI,both directed paym entbe m ade to the sam e V irginia W achovia
accountheldbyConsultantandhiswife,andbothinvoicesindicatedtheywerettltlorconsulting
servicesprovided by and payable to you undercontractsigned by both parties.'' As before,LAN
paid both invoices on behalfofA AIfrom itsN ew York Citibank account.
A -6
24. AllofthepaymentstoConsultant'scom/an# wereintentionallymis-recordedas
Etotherdebtors''on the books,recordssand accountsofLAN 'SD elaw are subsidiary. LA N
Executive approved the paym ents to Consultant'scom pany,knowing thatthepaym entsw ere
pursuantto an unsigned fictitiousconsulting agreem entwith Consulunt'scom pany.
OnNovember7,2007,LAN also paidan additional$58,000 to aNew York Bank
ofAmericaaccountinthenameofanothercompany,whichwasjointlyownedbyConsultant's
w ife and son. The invoice forthatpaym ent,like the three from Consultant's com pany,falsely
indicated thatthe paym entwasfortsconsulting servicesand studiesperform ed on the different
aerialroutes in the A rgentine Republicand in the regionalm arket.'' LAN did nothave an
agreem entorarrangem entofany kind w ith thissecond com pany.
LAN obtained an estimatedbenefstof$6,743,932 asaresultoftheimproper
paym entsto Consultant'scom pany to resolve LAN 'S union issues.
LAN 'SInternalA ccounting Controls
27.
D uring the relevantperiod,LAN know ingly and w illfully failed to implem enta
sufficientsystem ofinternalaccounting controls. ln particularand asrelevanthere,LA N had
deficientinternalaccounting contrqlsthatdid notrequire,among otherthings,(a)due diligence
fortheretentionofthirdpartyconsultants;(b)afullyexecutedcontractwithathirdpartybefore
paymentcould bemadeto it;(c)invoicesissued to theLAN entity thatin factengaged thethird
party;(d)documentationorotherproofthatserviceshadbeenrenderedbyathirdpartybefore
paymentcouldbemadetoit;(e)thatpaymenttothirdpartiesretainedbyLAN orLAN entities
bemadetobankaccountsheldinthenamesofthosethirdparties;or(9 oversightofthepayment
processto ensure thatpaym entswere m ade pursuantto appropriatecontrols,including those
described above.
A -7
28.
LAN Executive,LAN Cargo Executive,and one otherhigh-levelLA N executive
knew thatthe servicesdescribed in the unsigned fictitiousagreem entw ith Consultant'scom pany
w ere false,and thatthe true purpose ofthe paym entsm ade underitw ere to resolve LA N 'S
disputesW ith itsA rgentine laborunions. AtleastLAN Cargo Executive,m oreover,knew that
Consultantwould pay bribesto officialsofthe laborunions. LAN Executive and the otherhigh-
IevelLA N executive w ho knew aboutthe false nature ofthe agreem enthad the authority and
responsibility to ensure thatLAN devised and m aintained an adequate system ofinternal
accounting controls,knew thatLAN 'Sthen-existing internalaccounting controls failed to prevent
LAN from entering into an unsigned fictitious consulting agreem ent,and know ingly and
w illfully failed to im plem entinternalaccounting controlsto addressthe known w eaknesses in
partto perm itLA N to enterinto the contract.
A-8
AW ACHM ENT B
CERTIFICATE OF CORPOR ATE RESO LUTIONS
-
W HEREAS, Latam Airlines Groups S.A. (the ûçcompany'') hms been engaged in
discussionswit.
h theUnited StatesDcpartmentofJustice,CriminalDivisionaFraud Section (the
ROf15ce'')regardingissucsarisinginrelationtocertainfalsebookedpaymentsandanintentional
failureto implem entintenlalaccotmting conkols;atld
W HEREAS,in orderto resolve such discussions,itis prtlposed thatthe Company enter
into a certain agreem entw1111theOffice;and
W HEREAS, the Company's SR .Vice President Legal Affairs, Juan Carlos M encio,
together w ith outside counsel for the Compalm have advised the Board of Directors of the
Company of its rights, possible defenses, the Sentencing Guidelines' provisiom , and the
consequencesofentering into such agreem entwith the Oftice;
Therefore,the Board ofDizectorshasRESOLVED that:
TheCompany(a)acknowledgcsthefililzgofthetwo-countInformationcharging
theCompanyw11 (i)violating thehztemalcontrolsprovisionsoftheFozeign CorlxptPractices
Actof1977C$FCPA''),asamended,15U.S.C.9j7#m(b)(2)(B),78m(b)(5),and78ff(a);and(ii)
violatingtheFCPA'Sbooksandrecordspzovisionss15U.S.C.9j78m(b)(2)(A),78m(b)(5),and
78ff(a);(b)waivesindictmenton such chargesand cntersinto adeferredprosecution agreement
with the Offlce; and (c) agrees to accept a monetary penalty against Company totaling
$12,750,000,ahd to pay such penalty to tlleUnited StatesTreasury with respecttotlleconduct
described in theInfbrm ation;
The Com pany acceptstlleterm salld conditionsoftllis Agreem ent,including,but
not limited to,(a) a krmwing waiver of its rights to a speedy trlalpursnantto the Sixth
B-1
Amendmentto theUnited StatesConstimtion,Title 1% United StatesCode,Section 3161,and
FederalRule of CriminalProcedure 4809;and (b)a knowing waiver forptuposes oftMs
Agreem ent and any charges by the United States arising out ofthe conduct described in the
attachedStatementofFactsofanyobjectionwithrespecttovenueandconsentstotheûlingof
the Informationaas prtw ided under the terms of tltis Agreem ent,in the United States D istzict
CourtfortheSouthem DistrictofFlozida;and(c)aknowingwaiverofany defenscsbased onthe
staG te of lim itations for any prosecution relating to tlte conduct described in the attached
Statem ent of Facts or relating to conductknown to the Oftlce prior to the date on which this
Agreementwassigned thatis nottim e-barred by the applicable statute oflimitationson the date
ofthe signïng ofthisAgreem cnt;
The ChiefFinancialOfficer(CFO)ofCompany,Andres Osorio Hennansen,is
hereby authorized,empow ered and directed,on behalfofthe Company,.
to execute the Defen'
ed
Prosecution Agreem entsubstr tially in such form asreview ed by tllisBoard ofDirectors atthis
meetingwith such changesastheChiefFinancialOfficer(CFO)ofCompany,AndresOsorio
H erm ansen,m ay approve;
4.
The ChiefFinancialOfficer (CFO)ofCompany,Andres Osorio Hermansen is
hereby authorized,empowered and directed to take any and al1actions asm ay be necessary or
appropriate and to approve the fonns,term sorprovisionsofany agreem entor otherdocum ents
msmay be necessary orappropriate,to carry outand effectuate the pupose and intentofthe
foregoing resolutions;arld
5.
A11ofthe actionsofthe ChiefFjnancialOm cer(CFO)ofCompany,Andres
Osorio Herm ansen,which actionswould have been authorized by the foregoing
B-2
f
resolutions except that such actions were taken prior to the adoption of such resolutions, are
bercby severdly ratified, conth-m ed, approved, and adopted as actions on behalf of thc
Com pany.
Date: z./zz 1'r
-
B y:
B-3
z
.
z'
Corp te Secretary
Lat AidintsGroup .A .
A TTA CHM EN T C
C OR PO R ATE CO M PLIANC E PRO G M M
ln orderto addressany deficiencies in its internalcontrols,com pliance code,policies,
andproceduresregardingcompliancewiththeForeignCorruptPracticesAct(4:FCPA''),l5
U.S.C.jj7#dd-l,etseq.,andotherapplicableanti-corruptionlaws,LATAM AirlinesGroup
S.A.(thettcompany'')agreestocontinuetoconduct,inamannerconsistentwithallofits
obligations underthisA greem ent,appropriate review sofits existing internalcontrols,policies,
and procedures.
W here necessary and appropriatesthe Com pany agreesto adoptnew orto m odify
existing internalcontrols,compliance code,policies,and proceduresin orderto ensure thatit
maintains:(a)asystem ofinternalaccountingcontrolsdesignedtoensurethattheCompany
makesandkeepsfairand accuratebooks,records,and accounts;and(b)arigorousanticorruption compliance program thatincludespoliciesand proceduresdesigned to detectand
deterviolations ofthe FCPA and otherapplicable anti-corruption law s. A ta minim um ,this
should include,butnotbe lim ited to,the follow ing elem ents to the extentthey are notalready
partofthe Company'sexisting internalcontrols,com pliance code,policies,and procedures:
High-LevelCom mitm ent
1.
The Company willensure thatitsdirectorsand seniorm anagem entprovide
strong,explicit,and visible supportand com m itm entto itscorporate policy againstviolationsof
the anti-corruption law sand itscompliance code.
Policiesand Procedures
2.
The Com pany willdevelop and prom ulgate a clearly articulated and visible
corporate policy againstviolationsofthe FCPA and otherapplicable foreign law counterparts
(collectively,thet&anti-corruptionlaws,''),whichpolicyshallbememorializedinawritten
com pliance code.
The Company w illdevelop and prom ulgate com pliance policies and procedures
designed to reduce the prospectofviolationsofthe anti-corruption law sand the Com pany's
compliance code,and the Com pany w illtake appropriate m easuresto encourage and supportthe
observance ofethicsand com pliance policiesand procedures againstviolation ofthe anticorruption law sby personnelatal1levels ofthe Company. These anti-corruption policies and
procedures shallapply to a1ldirectors,officers,and em ployeesand,w here necessary and
appropriate,outsidepartiesactingonbehalfoftheCompanyinaforeignjurisdiction,including
butnotlim ited to,agentsand interlnediaries,consultants,representatives,distributors,team ing
partners,contractorsandsuppliers,consortia,andjointventurepartners(collectively,ttagents
and businesspartners'').TheCompany shallnotifyaIlemployeesthatcompliancewith the
policiesand procedures isthe duty ofindividualsatalllevelsofthe company. Such policiesand
proceduresshalladdress'
.
a.
gifts;
b.
hospitality,entertainm ent,and expenses'
,
custom ertravel;
d.
politicalcontributions;
charitable donations and sponsorships'
,
C-2
facilitation paym ents'
,and
solicitation and extortion.
4.
The Com pany w illensure thatithasa system ofGnancialand accounting
procedures,including a system ofinternalcontrols,reasonably designed to ensurethe
m aintenance offairand accurate bookssrecords,and accounts. This system should be designed
to provide reasonable assurancesthat:
transactionsareexecuted in accordance w ith m anagem ent'sgeneralor
specific authorization'
,
transactions are recorded asnecessary to perm itpreparation offinancial
statem entsin conform ity w ith generally accepted accounting principlesorany othercriteria
applicable to such statem ents,and to m aintain accountability forassets;
c.
accessto assetsisperm itted only in accordance w ith m anagem ent's
generalorspecific authorization;and
d.
the recorded accountability forassets iscom pared w ith the existing assets
atreasonable intervalsand appropriate action istaken w ith respectto any differences.
Periodic Risk-Based Review
The Company willdevelop these com pliance policiesand procedureson the
basis ofa periodic risk assessm entaddressing the individualcircum stances ofthe Com pany,in
particulartheforeign bribery risksfacing the Com pany,includingsbutnotlim ited tosits
geographicalorganization,interactionsw ith varioustypesand levelsofgovernm entofficials,
industrialsectorsofoperation,involvementinjointventurearrangements,importanceoflicenses
C-3
and perm itsin the Com pany'soperations,degree ofgovernm enl loversightand inspection,and
volum e and importance ofgoodsand personnelclearing through custom s and im m igration.
6.
The Com pany shallreview itsanti-corruption com pliance policiesand
procedures no lessthan annually and update them asappropriate to ensure theircontinued
effectiveness,taking into accountrelevantdevelopm entsin the field and evolving international
and industry standards.
ProperOversightand lndependence
The Company w illassign responsibility to oneorm ore seniorcorporate
executivesofthe Com pany forthe im plem entation and oversightofthe Com pany'santi-
corruptioncompliancecode,policies,andprocedures.Suchcorporateofficialts)shallhavethe
authority to reportdirectly to independentm onitoring bodies,including internalaudit the
Com pany'sBoard ofDirectors,orany appropriatecom mittee ofthe Board ofD irectors,and
shallhavean adequate levelofautonomy from m anagem entasw ellassufficientresourcesand
authority to m aintain such autonom y.
Training and Guidance
8.
The Com pany w illim plem entm echanism sdesigned to ensure thatitsanti-
corruption com pliance code,policies,and procedures are effectively com m unicated to all
directors,oficers,em ployees,and,where necessary and appropriate,agentsand business
partners.Thesemechanismsshallinclude:(a)periodictrainingforalldirectorsandofficers,all
employeesinpositionsofleadership ortrust,positionsthatrequiresuch training (e.g.,internal
audit,sales,Iegal,compliance,finance),orpositionsthatotherwiseposeacom zption risk to the
Company,and,wherenecessaryandappropriate,agentsandbusinesspartners;and(b)
C-4
corresponding certificationsby allsuch directors,officers,em ployees,agents,and business
partners,certifying com pliance w ith the training requirem ents.
9.
The Com pany w illm ainl in,orwhere necessary establish,an effective system
forproviding guidance and advice to directors,officers,employees,and,where necessary and
appropriate,agentsand businesspartners,on com plying w ith the Com pany'santi-corruption
com pliance code,policies,and procedures,including when they need advice on an urgentbasis
orinanyforeignjurisdictioninwhichtheCompanyoperates.
InternalReporting and lnvestigation
l0.
The Com pany w illm aintain,orwhere necessary establish,an effective system
forintelmaland,where possiblesconfidentialreporting by,and protection of,directors,officers,
employees,and,where appropriate,agentsand businesspartnersconcerning violations ofthe
anti-corruption law sorthe Com pany'santi-corruption com pliance code,policies,and
procedures.
1l.
The Company w illm aintain,orwhere necessary establish,an effective and
reliable processw ith sufficientresources forresponding to,investigating.and docum enting
allegationsofviolationsofthe anti-corruption law sorthe Com pany'santi-çorruption
compliance code,policies,and procedures.
EnforcementandDisclpline
12.
The Company willim plem entm echanism sdesigned to effectively enforce its
compliance code,policies,and procedures,including appropriately incentivizing com pliance and
disciplining violations.
C-5
13.
The Com pany willinstitute appropriate disciplinary proceduresto address,
am ong otherthings,violationsofthe anti-conuption law sand the Com pany'santi-corruption
compliance code,policies,and proceduresby the Company's directors, officers,and em ployees.
Such proceduresshould beapplied consistently and fairly,regardlessofthe position held by, or
perceived im portance of,the director,officer,oremployee. The Com pany shallimplem ent
proceduresto ensure thatwhere m isconductisdiscovered,reasonable stepsaretaken to rem edy
the harm resulting from such m isconduct,and to ensure thatappropriate stcps are taken to
preventfurthersim ilarm iscènduct,including assessing the internalcontrols,com pliance code,
policies,and proceduresand m aking m odificationsnecessary to ensure the overallanticorruption com pliance program iseffective.
Third-party Relationships
l4.
The Com pany w illinstitute appropriate risk-based due diligencç and com pliance
requirem entspertaining to the retention and oversightofa1lagentsand businesspartners,
including'
.
a.
properly docum ented due diligencepertaining to the hiring and
appropriate and regularoversightofagentsand businesspartners;
b.
inform ing agents and businesspartners ofthe Com pany'scom m itm entto
abiding by anti-corruption laws,and ofthe Com pany'santi-corruption com pliance code,
policies,and procedures;and
seeking a reciprocalcom m itm entfrom agentsand businesspartners.
W here necessary and appropriate,the Com pany w illinclude su ndard provisions
in agreem ents,contracts,and renew alsthereofw ith allagents and businesspartnersthatare
C-6
reasonably calculated to preventviolationsofthe anti-corruption law s,w hich m ay, depending
uponthecircumstances,include:(a)anti-corruptionrepresentationsandundertakingsrelatingto
compliancewiththeanti-corruptionlaws;(b)rightstoconductauditsofthebooksandrecordsof
theagentorbusinesspartnerto ensurecompliancewiththeforegoing;and (c)rightsto terminate
an agentorbusinesspartnerasa resultofany breach ofthe anti-corruption law s,the Com pany's
com pliance code,policies,orprocedures,orthe representations and undertakingsrelated to such
m atters.
M ergers and Acquisitions
l6.
The Com pany w illdevelop and im plem entpoliciesand proceduresform ergers
and acquisitionsrequiring thatthe Company conductappropriate risk-based due diligence on
potentialnew businessentities,including appropriate FCPA and anti-corruption due diligence by
legal,accounting,and com pliance personnel.
17.
The Company w illensure thatthe Company's compliance code,policies,and
proceduresregarding the anti-corruption Iawsapply as quickly asispracticable to new ly
acquired businessesorentitiesm erged w ith the Com pany and w illprom ptly:
a.
train the directors,officers,em ployees,agents,and businesspartners
consistentw ith Paragraph 8 above on the anti-corruption laws and the Com pany'scom pliance
code,policies,and proceduresregarding anti-corruption law s;and
b.
where w arranted,conductan FcpA -specific auditofa1lnew ly acquired
orm erged businessesasquickly aspracticable.
C-7
M onitoring and Testing
18.
The Com pany w illconductperiodic reviews and testing ofitsanti-corruption
com pliance code,policies,and proceduresdesigned to evaluate and improve theireffectiveness
in preventing and detecting violationsofanti-corruption law sand the Com pany'santi-corruption
code,policies,and piocedures,lking into accountrelevantdevelopm ents in the field and
evolving internationaland industry standards.
C-8
A TTA CH M EN T D
IN DEPEN DENT CO M PLIA NC E M O N ITO R
ThedutiesandauthorityoftheIndependentComplianceM onitor(theEtM onitor''),and
theobligàlionjA LATAM AirliizesGroup S.A.tthettcompan/),onbehalfofitselfandits
subsidiariesandaffiliates,withrespecttotheMonitorandtheDepartmentofJustice(the
tr epartment'')5areasdescribedbelow:
TheCom pany w illretain theM onitorfora period ofnotlessthan tw enty-seven
'
(27)months(thetû-rerm oftheMonitorship''),unlesstheearlyterminationprovisionsof
Paragraph3oftheDeferredProsecutionAgreement(thettAgreemenf')aretriggered.Subjectto
certain conditions specified below thatw ould,in the sole discretion ofthe D epartm ent,allow for
an extension ofthe Term oftheM onitorship,the M onitorshallbe retained untilthe criteria in
Paragraphs 19-20 below are satisfied orthe Agreem entexpires,whicheveroccursfirst.
M onitor'
s M andate
TheM onitor'sprim ary responsibility isto assessand monitorthe Com pany's
compliance w ith theterm s ofthe Agreem ent,including the Corporate Com pliance Program in
AttachmentC,so asto specifically address and reduce the risk ofany recurrence ofthe
Com pany'sm isconduct. D uring the Term ofthe M onitorship,theM onitorw illevaluatesin the
m annersetforth below ,the effectivenessofthe internalaccounting controls,record-keeping,and
snancialreporting policiesand proceduresofthe Company asthey relate to the Com pany's
currentand ongoing compliancew ith the FCPA and otherapplicable anti-corruption law s
(collectively,thettanti-corruption laws'')and take suchreasonablestepsas,in hisorherview,
-
may be necessary to fulfilltheforegoing mandate(thettM andate''). ThisM andate shallinclude
an assessm entofthe Board ofD irectors'and seniorm anagem ent'scom m itm entto,and effective
D -1
im plem entation bf,the corporate com plianceprogram described in A ttachmentC ofthe
A greem ent.
Company '.
çObligations
The Com pany shallcôoperate fully w ith the M onitor, and the M onitorshallhave
the authority to take such reasonable stepsas, in hisorherview ,m ay be necessary to be fully
inform ed aboutthe Com pany's com pliance program in accordance w ith theprinciples setforth
herein and applicable law ,including applicable data protection and laborlaw s and regulations.
To thatend,the Com pany shall:facilitate the M onitor'saccessto the Com pany'sdocum entsand
resources;notIim itsuch access,exceptasprovided in Paragraphs 5-6)and provide guidance on
applicablelocallaw (suchasrelevantdataprotectionandlaborlaws).TheCompanyshall
provide theM onitorw ith accessto allinform ation,documents, records,facilities,and
employees,as reasonably requested by the M onitor,thatfallw ithin the scope ofthe M andate of
the M onitorunderthe A greem ent.The Com pany shalluse its besteffortsto provide the M onitor
w ith accessto the Com pany'sform erem ployees and itsthird-party vendors, agents,and
consultants.
4.
Any disclosure by the Com pany to the M onitorconcerning corruptpaym ents,
false booksand records,and internalaccounting controlfailures shallnotrelieve the Company of
any otherwise applicable obligation to truthfully disclose such m attersto the Departm ent,
pursuantto the Agreem ent.
W ithholding Access
5.
The partiesagree thatno attorney-clientrelationship shallbe form ed betw een the
Company and the M onitor. ln the eventthatthe Com pany seeksto w ithhold from the M onitor
accessto infonmation,documents,records,facilities,orcurrentorform erem ployees ofthe
D-2
Companythatmaybesubjecttoaclaim ofattorney-clientprivilegeortotheattorneyworkproductdoctrine,orw herethe Com pany reasonably believesproduction would otherw ise be
inconsistentwith applicable law,the Company shallwork cooperatively w ith theM onitorto
resolvethe m atter'to the satisfaction ofthe M oflitor.
6.
lfthe m attercannotbe resolved, atthe requestofthe M onitor,th< Com pany shall
prom ptly provide written notice to the M onitorand the Departm ent. Such notice shallinclude a
generaldescription ofthe nature ofthe inform ation, documents,records,facilitiesorcurrentor
form eremployeesthatare being w ithheld,asw ellasthe legalbasis forw ithholding access. The
D epartm entmay then considerw hetherto make a furtherrequestforaccess to such inform ation,
docum ents,records,facilities,orem ployees.
M onitor'
s Coordination with the
Company and Review M ethodology
ln carrying outthe M andate,to the extentappropriateunderthe circum stances,
the M onitorshould coordinate w ith Com pany personnel,including in-house counsel, compliance
personnel,and internalauditors,on an ongoing basis. The M onitorm ay rely on the productof
the Com pany'sprocesses,such as the results ofstudies,review s,sampling and testing
m ethodologies,audits,and analyses conducted by oron behalfofthe Company,aswellasthe
Company'sinternalresources(e.g.,legal,compliance,andinternalaudit),whichcanassistthe
M onitor in carrying outthe M andate through increased efficiency and Com pany-specific
expertise,provided thatthe M onitorhasconfidence in the quality ofthose resources.
8.
The M onitor's reviews should use a risk-based approach,and thus,the M onitoris
notexpected to conducta com pTehensive review ofallbusinesslines,allbusinessactivities,or
allm arkets. In carrying outthe M andate,the M onitorshould consider,forinstance,risks
presentedby:(a)thecountriesand industriesinwhichtheCompanyoperates;(b)currentand
D-3
futurebusinessopportunitiesandtransactions'
,(c)currentandpotentialbusinesspartners,
includingthirdpartiesandjointventures,andthebusinessrationaleforsuchrelationships;(d)
theCompany'sgifts,travel,and entertainmentinteractionswith foreignofficials;and (e)the
Com pany'sinkolvem entwith foreign officials,including the am ountofforeign governm ent
regulation and oversightofthe Com pany,such as licensing and perm itting,and the Com pany's
exposure to custom sand im m igration issues in conducting itsbusinessaffairs.
9.
ln undertaking the review sto carry outthe M andate,the M onitorshallform ulate
conclusionsbasedon,amongotherthings:(a)inspectionofrelevantdocuments,includingthe
Company'scurrentanti-conuptionpoliciesandprocedures;(b)on-siteobservationofselected
system sand proceduresofthe Com pany atsam ple sites,including internalaccounting controls,
record-keeping,andinternalauditprocedures'
,(c)meetingswith,andinterviewsof,relevant
currentand,where appropriate,fonnerdirectors,officers,em ployees,businesspartners,agents,
andotherpersonsatmutually convenienttimesandplaces;and (d)analyses,studies,and testing
ofthe Com pany'scom pliance program .
M onitor's W ritten W ork Plans
To can'y outthe M andate,during the Term ofthe M onitorship,the M onitorshall
conductan initialreview and prepare an initialreport,followed by atleasttwo follow -up reviews
and reportsasdescribed in Paragraphs 16-18 below . W ith respectto the initialreport,after
consultation w ith the Com pany and the D epartm ent,the M onitorshallprepare the firstwritten
workplanwithinforty-five(45)calendardaysofbeingretained,andtheCompanyandthe
Departmentshallprovidecommentswithin twentpfive(25)calendardaysafterreceiptofthe
written w ork plan. W ith respectto each follow-up report,afterconsultation w ith the Company
andtheDepartment,theMonitorshallprepareawrittenworkplanatleastthirty(30)calendar
D-4
dàyspriorto com m encing a review , and the Com pany and the Departm entshall'provide
commentswithinfifteen(15)calendardaysafterreceiptofthewrittenworkplan A ny disputes
.
between the Com pany and theM onitorw ith respectto any w ritlen work plan shallbe decided by
theD epartm entin its sole discretion.
1l.
A llwritten work plansshallidentify w ith reasonable specificity the activitiesthe
M onitorplansto undertake in execution ofthe M andate, including a written requestfor
docum ents. The M onitor'sw ork plan forthe initialreview shallinclude such stepsasare
reasonably necessary to conductan effective initialreview in accordance w ith the M andate,
including by developing an understanding, to the extenttheM onitordeem s appropriate, ofthe
factsand circum stances surrounding any violationsthatm ay have occurred before the date ofthe
Agreement. ln developing such understanding the M onitoristo rely to the extentpossible on
available infonnation and docum entsprovided by the Com pany. ltisnotintended thatthe
M onitorwillconducthis orherown inquiry into the historicaleventsthatgave rise to the
A greem ent.
InitialReview
12.
Theinitialreview shallcom mence no laterthanninety (90)calendardaysfrom
thedateoftheengagementoftheMonitor(unlessotherwiseagreedbytheCompany,the
M onitor,andtheDepartment). TheM onitorshallissueawritten reportwithinonehundred fifty
(150)calendardaysofcommencingtheinitialreview,setting forththeMonitor'sassessment
and,ifnecessary,m aking recom m endationsreasonably designed to im prove the effectivenessof
the Com pany'sprogram forensuring com pliance w ith the anti-corruption law s. The M onitor
should consultw ith the Company concerning his orhertindingsand recom m endationson an
ongoingbasisand should considertheCompany'scommentsand inputtotheextenttheM onitor
D -5
deems appropriate. The M onitorm ay also chooke to shàre a draftofhisorherreportsw itlzthe
Com pany and the D epartm entpriorto finalizing them . The M onitor's reportsneed notrecite or
describe com prehensively the Company'shistory orcompliancepolicies, procedures and
practices,butratherm ay focuson thoseareaswith respectto w hich the M onitorw isbes to m ake
recom m endations,ifany,forim provem entorwhich the M onitorotherwise concludesm erit
particularattention. The M onitorshallprovide the reportto the Board ofD irectorsofthe
Com pany and contem poraneously transm itcopiesto the Chief- FCPA U nit, Fraud Section,
Crim inalD ivision,U .S.Departm entofJustice,at 1400 N ew Y ork Avenue N .W .,Bond Building,
Eleventh Floor,W ashington,D .C.20005. A fterconsultation w ith the Com pany, the M onitor
may extend the tim e period forissuance ofthe initialreportfora briefperiod oftim e w ith prior
written approvalofthe Departm ent.
13.
Withinninety(90)calendardaysafterreceivingtheMonitor'sinitialreport,the
Com pany shalladoptand im plem entallrecom m endations in thereport,unless,w ithin Gt-teen
(15)calendardaysofreceivingthereport,theCompany notifiesinwriting theM onitorand the
Departm entofany recom m endationsthattheCom pany considersunduly burdensom e,
inconsistentw ith applicable law orregulation,im practical,excessively expensive,orotherw ise
inadvisable. W ith respectto any such recom m endation,the Com pany need notadoptthat
recommendationwithin theninety (90)calendardaysofreceiving thereportbutshallpropose in
writing to theM onitorand the Departm entan alternative policy,procedure,orsystem designed
toachievethesameobjectiveorpumose.AstoanyrecommendationonwhichtheCompany
and the M onitordo notagree,such partiesshallattemptin good faith to reach an agreem ent
withinGfteen (15)calendardaysaftertheCompany servesthewrittennotice.
D-6
In the evèntthe Company and the M onitorare unable to agree on an acceptabld
alternativeproposal, the Company shallprom ptly consultw ith the Departm ent. The D epartm ent
m ay considertheM onitor's recomm endation and the Com pany'sreasons fornotadopting the
recom m endation in determ ining whetherthe Com pany hasfully com plied w ith itsobligations
underthe Agreem ent. Pending such determ ination, the Com pany shallnotbe required to
implementanycontested recommendationts).
W ith respectto any recom m endation thatthe M onitordeterm ines cannot
reasonably beimplemented withinninety (90)calendardaysafterreceiving thereport, the
M onitorm ay extend the tim e period forim plem entation w ith priorw ritten approvalofthe
D epartm ent.
FirstFollow-up Review
Thefsrstfollow-up review shallcommenceno laterthan ninety (90)calendardays
afterthe issuanceoftheinitialreport(unlessotherwiseagreed by theCompany, the M onitorand
theDepartment).TheMonitorshallissueawrittenfollow-upreportwithinonehundredtwenty
(120)calendardaysofcommencingthefirstfollow-upreview,settingforththeMonitor's
assessm entand,ifnecessary,m aking recom m endationsin the sam e fashion assetforth in
Paragraph 12 w ith respectto the initialreview . The M onitorshallalso certify whetherthe
Com pany'scompliance program ,including itspoliciesand procedures, isreasonably designed
and im plem ented to preventand detectviolationsofthe anti-corruption law s. A fterconsultation
w ith the Com pany,the M onitorm ay extend thetim e period forissuance ofthe firstfollow-up
reportfora briefperiod oftim e with priorw ritten approvalofthe D epartm ent.
W ithin ninety (90)calendardaysafterreceiving theM onitor'sfirstfollow-up
report,the Com pany shalladoptand im plem entallrecom m endations in the report, unless,w ithin
D -7
fifteen(15)calendardaysafterreceivingthereport,theCompanynotifiesinwritingtheM onitor
and the D epartm entconcerning any recom m endationsthatthe Com pany considersunduly
burdensom e,inconsistentw ith applicable law orregulations im practical,excessively expensive
,
orotherwise inadvisable. W ith respectto any such recom mendation, the Com pany need not
adoptthatrecommendationwithintheninety(90)calendardaysofreceivingthereportbutshall
propose in writing to the M onitorand the Departmentan alternative policy, procedure,orsystem
designedtoachievethesameobjectiveorpurpose.Astoanyrecommendationonwhichthe
Com pany and theM onitordo notagree, such partiesshallattemptin good faith to reach an
agreementwithinfifteen(15)calendardaysaftertheCompanyservesthewrittennotice
.
l8.
In the eventthe Com pany and the M onitorare unable to agree on an acceptable
alternativeproposal,the Company shallprom ptly consultw ith the Departm ent. The Department
m ay considèrthe M onitor's recom m endation and the Com pany'sreasonsfornotadopting the
recom m endation in determ ining whetherthe Com pany hasfully complied w ith itsobligations
underthe A greem ent. Pending such determ ination, the Company shallnotberequired to
implementanycontestedrecommendationts).
Second Follow -up Review
Thesecondfollow-upreview shallcommencenolaterthanninety(90)calendar
daysaftertheissuanceofthefirstfollow-up report(unlessotherwiseagreed by theCom pany, the
M onitorandtheDepartment).TheM onitorshallissueawrittensecondfollow-upreportwithin
onehundredtwenty(120)calendardaysofcommencingthesecondfollow-upreview, setting
forth the M onitor'sassessm entand, ifnecessary,m aking recom m endations in the sam e fashion
assetforth in Paragraph 12 with respectto the initialreview . The M onitorshallalso certify
whetherthe Company'scom pliance program , including itspoliciesand procedures, isreasonably
D-8
designed and im plem ented to preventand detectviolationsoftlze anti- corruption Iaw s. After
consultation w ith the Com pany,the M onitorm ay extend the tim eperiod forissuance ofthe
follow -up reportfora briefperiod oftim e w ith priorw ritten approvalofthe D epartm ent.
W ithinninety(90)calendardaysafterreceivingtheMonitor'ssecondfollow-up
report,theCompany shalladoptand implementallrecommendationsin thereporq unless, w ithin
Gfteen(15)calendardaysafterreceivingthereport,theCompanynotifiesinwritingtheMonitor
and the Departm entconcerning any recom mendationsthatthe Company considersunduly
burdensom e,inconsistentw ith applicable Iaw orregulation, im practical,excessively expensive,
orotherwise inadvisable. W ith respectto any such recom m çndation, the Company need not
adoptthatrecom mendationwithin theninety (90)calendardaysofreceiving thereportbutshall
propose in writing to the M onitorand the D epartm entan alternative policy, procedure,orsystem
designedtoachievethesameobjectiveorpurpose.Astoanyrecommendationonwhichthe
Com pany and the M onitordo notagree, such parties shallattem ptin good faith to reach an
agreementwithinfifteen(15)calendardaysaftertheCompany servesthewrittennotice
.
18.
ln the eventthe Com pany and the M onitorare unable to agree on an acceptable
alternative proposal,the Com pany shallpromptly consultw ith the Departm ent. The D epartm ent
m ay considerthe M onitor'srecom m endation and the Com pany'sreasonsfornotadopting the
recom m endation in determ ining whetherthe Com pany hasfully com plied w ith itsobligations
underthe Agreem ent. Pending such determ ination, the Com pany shallnotbe required to
implementany contested recommendationts).
Certscationofcompliance
and TerminationoftheMonitorshi
p
l9. Attheconclusion oftheninety (90)calendarday periodfollowing the issuanceof
the second follow -up reporq ifthe M onitorbelievesthatthe Com pany'scom pliance program is
D-9
reasonablfdesignedandimplementedtodetectandpreventviolationsoftheanticorrup-tioh law s
-
and isfunctioning effectively, the M onitorshallcertify the Com pany'scom pliance w ith its
com pliance obligationsunderthe Agreem ent. The M onitorshallthen subm itto the D epal-tm ent
awrittenreportCùcertificationRepolf')withinsixty(60)calendardays The Certification
.
Reportshallsetforth an overview ofthe Company'srem ediation effortsto date including the
,
im plem entation status ofthe M onitor'srecom m endations, and an assessm entofthe sustainability
ofthe Com pany'srem ediation efforts. The Certification Reportshould also recom mend the
scope ofthe Com pany'sfuture self-reporting. Also attheconclusion ofthe ninety (90)calendar
day period follow ing the issuanceofthe second follow - up report,the Com pany shallcertify in
writing to the D epartm ent, w ith a copy to the M onitor, thatthe Company has adopted and
implem ented al1ofthe M onitor'srecom m endationsin the initialand follow -
upreportts),orthe
agreed-upon alternatives. The M onitororthe Company m ay extend the tim e period for issuance
ofthe Certification Reportorthe Company'scertification, respectively,with priorw ritten
approvalofthe Departm ent.
20.
Atsuch tim e astheD epartm entapprovesthe Certification Reportand the
Company'scertification, the m onitorship shallbe term inated, and the Com pany w illbeperm itted
to self-reportto the Departm enton its enhanced com pliance obligations forthe rem ainderofthe
term ofthe Agreem ent. The Departm ent, however,reserves the rightto term inate the
m onitorship absentcertification by theM onitor, upon a show ing by the Com pany that
term ination is,nevertheless, intheinterestsofjustice.
21.
Ifperm itted to self-reportto the D epartment, the Com pany shallthereaftersubm it
totheDepartmentawrittenreporteveryfour(4)monthssettingforthacompletedescriptionof
itsrem ediation effortsto date, itsproposalsto im prove the Com pany's.
internalaccounting
D -l0
controls,policies,and proceduresforensuring coinpliance-W ith the anti-corruption law s, and the
proposed scope ofthe subsequentreviews. The reportshallbetransm itted to the Chief- FCPA
Unit,Fraud Section,Crim inalD ivision,U .S.Departm entofJustice,1400 N ew Y ork Avenue,
N .W .,Bbnd Building,Eleventh Floor,W ashington, D .C.20005. The Com pany nïay éxtend the
tim e period forissuance ofthe self-reportw ith priorw ritten approvalofthe D epartm ent.
ExtensionoftheTerm oftheMonitorshlp
If,however,attheconclusionoftheninety(90)calendar-dayperiodfollowingthe
issuance ofthe second follow -up reporq the D epartm entconcludesthatthe Com pany hasnotby
thattim e successfully satistsed itscom pliance obligationsundertheA greem ent, the Term ofthe
M onitorship shallbe extended forone year.
23.
Undersuch circum stances,the M onitorshallcom m ence the third follow-up
review no laterthan sixty (60)calendardaysaftertheDepartmentconcludesthattheCompany
hasnotsuccessfully satisfieditscomplianceobligationsundertheAgreement(unlessotherwise
agreedbytheCompany,theM onitor,andtheDepartment).TheMonitorshallissueawritten
follow-upreportwithinonehundredtwenty(120)calendardaysofcommencingthethird
follow -up review in the sam e fashion assetforth in Paragraph 12 w ith respectto the initial
review and in accordance w ith theproceduresforfollow -up reportssetforth in Paragraphs l6--
18. A determ ination to term inate the m onitorship shallthen be m ade in accordance w ith
Paragraphs 19-20.
1f,aftercompleting thethird follow -up review ,the D epartm entagain concludes
thatthe Com pany hasnotsuccessfully satisfied its obligations underthe A greem entw ith respect
to the M onitor'sM andate,the Term ofthe M onitorship shallbe extended untilexpiration ofthe
Agreement,and theM onitorshallcommenceafourth follow-up review withinsixty (60)
D -l1
calendardaysafter'thè'Depàrtinentconcludesthatthe Com pany hasnotsuccessfully satisfied its
complianceobligationsundertheAgreement(unlessotherwiseagreedbytheCompany, the
M onitor,andtheDepartment).TheMonitorshallissueawrittenfollow-upreportwithinone
htmdtedtwenty(l20)calendardaysofcommencingthèthird follow-upreview inthesame
fashion assetforth in Paragraph 12 w ith respectto the initialreview and in accordance with the
procedures forfollow -up reports setforth in Paragraphs 16-18.
.
Monitor'
sDiscoveryofMisconduct
25.
Should the M onitor, during the course ofhisor herengagem ent, discoverthat:
corruptorotherwisesuspiciouspayments(ortransfersofpropertyor
interests)mayhavebeenoffered,promised,made,orauthorizedbyany
entity orperson w ithin the Com pany orany entity orperson w orking,
directly orindirectly, fororon behalfofthe Com pany;or
*
false booksand recordsm ay have been m aintained by the Com pany
either(a)afterthedateonwhichthisAgreementwassignedor(b)thathavenotbeenadequately
dealtwithbytheCompany(collectively:limproperactivities''), the M onitorshallprom ptly
reportsuch im properactivitiesto the Com pany'sGeneralCounsel, ChiefCom pliance O fficer,
and/orA uditCom m ittee forfurtheraction. lfthe M onitorbelievesthatany im properactivities
m ay qonstitute a violation ofIaw , the M onitoralso shallreportsuch im properactivitiesto the
D epartm ent. The M onitorshould disclose improperactivitiesin hisorherdiscretion directly to
the Departm ent,and notto the Com pany, only ifthe M onitorbelievesthatdisclosure to the
Company w ould be inappropriateunderthe circum stances, and in such case should disclose the
im properactivities to the GeneralCounsel, ChiefCom pliance O fficer, and/orthe Audit
Com m ittee ofthe Company asprom ptly and com pletely asthe M onitordeem sappropriate under
D-12
the circum stances. The M onitorshalladdressin his orherreportsthe appropriatenessofthe
Com pany's response to allimproperactivities, w hetherpreviously disclosed to the Department
ornot. Further,in the eventthatthe Company, orany entity orperson working directly or
indirectly fororon behalfofthe Com pany, w ithholdsinformation necessary forthe perform ance
ofthe M onitor'sresponsibilities, iftheMonitorbelievesthatsuchwi
thholdingiswithoutjust
cause,the M onitorshalldisclose thatfactto the D epartm ent. The Com pany shallnotG ke any
action to retaliate againstthe M onitorforany such disclosures orforany otherreason. The
M onitorshallreportm aterialcriminalorregulatory violationsby the Com pany orany other
entity discovered in the course ofperfonning his orherduties, in the sam e mannerasdescribed
above.
MeetingsDuringPendencyofMonitorshlp
26. TheMonitorshallmeetwiththeDepartmentwithinthirty(30)calendardaysafter
providing each reportto the Departm entto discuss the report, to be followed by a m eeting
between theD epartm ent,the M onitor, and the Company.
27.
Atleastannually,and m ore frequently ifappropriate, representativesfrom the
Company and theD epartm entw illm eettogetherto discussthe m onitorship and any suggestions,
com m ents,orimprovem entsthe Com pany m ay w ish to discussw ith orproposeto the
Departm ent,including w ith respectto the scope orcostsofthe m onitorship.
ContemplatedConfdentialityt?fMonitor'
sReports
28.
The reportsw illlikely include proprietary, snancial,confidential,and com petitive
businessinform ation. M oreover, public disclosure ofthe reportscould discourage cooperation,
orimpedependingorpotentialgovernmentinvestigationsandthusunderminetheobjectivesof
the m onitorship. Forthese reasons, among others,the reportsand the contentsthereofare
D-13
intended to rem ain and shallrem ain non-public, exceptasotherwise agreed to by the partiesin
w riting,orexceptto the extentthatthe Departm entdeterm inesin its sole discretion that
disclosure would be in furtherance ofthe D epartm ent'sdischarge ofitsdutiesand
responsibilities oris otherwiserequired by law .
D-14

Deferred Prosecution Agreement

Transcription

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