LATAM Airlines Fined $22 Million Over Decade-Old Bribery Case
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On Monday, LATAM Airlines agreed to pay more than $22 million in civil and criminal fines in relation to an Argentinean bribery case that has spanned over a decade.
According to Reuters.com, officials from the United States Securities and Exchange Commission announced that LATAM was fined due to “improper payments it authorized during a dispute between the airline and its union employees in Argentina.”
The bribery case dates back to 2006-07 — before the Chile-based LAN merged with Brazil's TAM in 2012 — when LAN used an Argentine consultant to channel funds to corrupt union officials during negotiations with unions.
LAN’s contract with the Argentinean consultant violated the accounting provisions of the Foreign Corrupt Practices Act, and the airline has agreed to pay a $12.75 million criminal penalty for the scheme.
In addition, LATAM will pay another $9.4 million, including interest, to settle the Securities and Exchange Commission's charges of “inadequate accounting controls.” LAN's chief executive Ignacio Cueto was also fined $75,000 for the same case.
In a statement to Reuters.com, LATAM officials said the airline “has cooperated fully with relevant authorities throughout this process." The airline also added that significant improvements had been made to compliance and internal accounting since the scheme was uncovered.
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