Colombian Conglomerate and Subsidiary Settles FCPA Offenses for $80.8 Million

Grupo Aval Acciones y Valores S.A., a prominent Colombian conglomerate, along with its banking subsidiary, has agreed to pay a total of $80.8 million to settle Foreign Corrupt Practices Act (FCPA) offenses. The resolution stems from activities related to a toll road project in Colombia and underscores the company's commitment to address legal concerns.

The conglomerate's subsidiary, Corporación Financiera Colombiana S.A. (Corficolombiana), has entered into a three-year deferred prosecution agreement with the U.S. Department of Justice (DOJ), obligating it to pay a criminal penalty of $40.6 million. Importantly, the DOJ has agreed to potentially credit up to half of this penalty against amounts paid by Corficolombiana and its affiliate, Estudios y Proyectos del Sol S.A.S. (Episol), to Colombia's Superintendencia de Industria y Comercio (SIC). This credit would be applicable if Corficolombiana and Episol withdraw their appeals of the SIC resolution.

The U.S. Securities and Exchange Commission (SEC) has also played a role in this settlement. It has charged both Grupo Aval and Corficolombiana with violating the accounting provisions of the FCPA. Additionally, Corficolombiana faces charges for violating the anti-bribery provisions of the FCPA. As part of this resolution, Grupo Aval and Corficolombiana will disgorge approximately $40.3 million in funds, including prejudgment interest.

The offenses in question revolve around activities that transpired between 2012 and 2015. During this period, Corficolombiana is alleged to have conspired with an executive of Brazil-based construction conglomerate Odebrecht. The conspiracy involved offering and paying over $23 million in bribes to high-ranking Colombian government officials, with the aim of securing a contract for a toll road project. Subsequently, Corficolombiana earned profits of $28.6 million from these illicit activities.

Part of the resolution requires Corficolombiana to cooperate with the DOJ, enhance its compliance program, and provide regular reports regarding remediation efforts and compliance implementation for the duration of the deferred prosecution agreement.

Highlighting the significance of this settlement, a DOJ official emphasized that Corficolombiana is being held accountable for its role in a substantial foreign bribery scheme. The settlement also reflects a 30 percent reduction off the U.S. Sentencing Guidelines, acknowledging the company's prompt engagement in comprehensive remedial actions.

It is worth noting that the investigation into these offenses was first disclosed by Grupo Aval in an SEC filing back in April 2017. The resolution sends a clear message about the commitment to combat corruption and ensure ethical business practices, reinforcing the importance of transparent and compliant conduct in the corporate world.