Ralph Lauren Corp. has agreed to pay 1.6 million dollars to the US Securities and Exchange Commission, SEC, after finding that its subsidiary in Argentina repeatedly bribed customs officials, federal authorities announced Monday.
The clothing label will pay an 882,000 dollars penalty as part of a non-prosecution agreement with the Justice Department, and will give up roughly 735,000 in illicit profits and interest as part of a non-prosecution agreement with the Securities and Exchange Commission.
Between 2004 and 2009, Ralph Lauren's Argentina subsidiary bribed customs officials to improperly obtain paperwork necessary for goods to clear customs; permit clearance of items without the necessary paperwork and/or the clearance of prohibited items; and on occasion, to avoid inspection entirely, the Justice Department said. Fake invoices were created to mask the payoffs, which totalled roughly 580,000 dollars, according to case documents.
The period coincides with the beginning of the implementation in Argentina of measures and other barriers to cool or delay imports.
Ralph Lauren Corp said in a statement that the bribes were wholly inconsistent with the culture of compliance and integrity that we have worked diligently to establish. The company said it had conducted a full investigation of the matter, reported its findings promptly to federal authorities and bolstered its compliance efforts.
There was no evidence that the improper activity in Argentina was known or authorized by anyone outside of Argentina or that similar practices were occurring at other foreign operations, the statement said.
The SEC and Justice Department both praised the company's response to the misconduct.
The [non-prosecution agreement] in this matter makes clear that we will confer substantial and tangible benefits on companies that respond appropriately to violations and cooperate fully with the SEC, the agency's acting enforcement director, George Canellos, said in a statement.
A solicitor from Ralph Lauren, Thomas Hanusik said that the company investigated the accusations, declared them to the authorities and collaborated all along with the US government. The company notified all the violations to the Foreign Corrup Practices bill once it had discovered them following an internal review in 2010.