SAP foreign bribery resolutions with DOJ and the SEC (2024)

The DOJ deferred prosecution agreement

DOJ said SAP entered a three-year deferred prosecution agreement in connection with a criminal information filed in the Eastern District of Virginia ¹. The information charged two conspiracies: one to violate the FCPA's anti-bribery and books-and-records provisions over South Africa, and one to violate the anti-bribery provisions over Indonesia ¹.

The DPA bears the case number 1:23-CR-202 and is stamped filed on 10 January 2024 ². It says the term runs from the filing of the information, "ending three years from that date" ². SAP agreed that "it will not dispute the Statement of Facts" ². The DPA says an independent compliance monitor was unnecessary, given SAP's remediation and compliance program ². SAP must instead submit a first report and at least two follow-up reports on its compliance program ².

Conduct described by DOJ

DOJ said that from about 2013 to 2017 SAP paid bribes to officials at South African state-owned entities and municipalities, including the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation and Eskom Holdings Limited ¹. From about 2015 to 2018, DOJ said, SAP paid bribes to officials at Indonesia's Ministry of Maritime Affairs and Fisheries and the Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika, a telecommunications and informatics financing agency ¹. DOJ said payments included cash, political contributions, wire and electronic transfers and luxury goods bought on shopping trips ¹.

Penalty, credits and cooperation

DOJ said the criminal penalty reflects a 40% reduction off the tenth percentile above the low end of the otherwise applicable guidelines fine range ¹. DOJ will credit up to US$55.1 million of the penalty against amounts SAP pays to South African law enforcement for related conduct ¹. It will credit up to the full forfeiture against disgorgement paid to the SEC or South African authorities ¹. DOJ said the penalty was reduced by US$109,141 under its Compensation Incentives and Clawbacks Pilot Program ¹.

DOJ said SAP began cooperating after South African reports made public allegations in 2017 ¹. The release does not say SAP voluntarily self-disclosed ¹. Remediation listed by DOJ includes ending its third-party sales commission model worldwide and banning sales commissions on public-sector deals in high-risk markets ¹. DOJ listed SAP's prior history, including a 2021 non-prosecution agreement with the DOJ National Security Division and a 2016 SEC resolution over Panama ¹.

The SEC order

The SEC said its order found SAP violated the anti-bribery, books and records and internal accounting controls provisions of the Securities Exchange Act of 1934 ³. The SEC said the conduct ran from December 2014 through January 2022 and involved third-party intermediaries in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia and Azerbaijan ³.

The order, Administrative Proceeding File No. 3-21824, directs SAP to cease and desist from violating sections 30A, 13(b)(2)(A) and 13(b)(2)(B) ⁴. It orders disgorgement of US$85,046,035 and prejudgment interest of US$13,405,149 ⁴. SAP receives an offset of up to US$59,455,779 for payments to the Government of South Africa or a South African state-owned entity made within 365 days ⁴. The order states that SAP admits the Commission's jurisdiction and consents to the entry of the order ⁴. The settlement paragraph of the order contains no statement that SAP admits or denies the findings ⁴.

Related South African proceedings

DOJ said South African prosecutorial and law enforcement authorities coordinated on the resolution ¹. The DOJ release and SEC order provide credits and offsets for South African payments ^1,4. This page has not confirmed the form, date or amount of any South African resolution with SAP from an official South African source.