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Samsung Bribery Case May Trigger U.S. Legal Authorities Too

Samsung Bribery Case May Trigger U.S. Legal Authorities Too

Enterprise & IT Jan 18,2017 0

The scandal swirling around Samsung Electronics Vice Chairman Lee Jae-yong may reach beyond South Korea's judiciary and could be subject to a U.S. anti-corruption law.

The allegations leveled against the 48-year-old heir are likely to fall under America's Foreign Corrupt Practices Act, according to legal experts. The law bans making payments to foreign government officials in an effort to obtain or retain business.

The Seoul Central District Court on Wednesday held a hearing on whether to issue an arrest warrant for Lee. The special prosecutors' office has accused him of paying 43 billion won ($36.8 million) worth of bribes to Choi Soon-sil, the longtime friend of President Park Geun-hye at the center of the scandal that upended her administration.

The prosecution suspects the payments were made to secure support from the National Pension Service for the merger of the group's two key affiliates in 2015.

According to legal sources, the FCPA prohibits companies from bribing government officials in foreign countries. Corporations' foreign affiliates are also subject to the law, so the authorities can bring Samsung to court because it has operations in the U.S.

"If the company is convicted of violating the law, the U.S. government can impose sanctions against it, such as excluding it from the bidding process for the government's procurements," the expert added.

The U.S. Department of Justice says the anti-bribery provisions of the FCPA now apply to foreign companies and individuals "who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place" within US territory.

Choi Sung-jai, an attorney at law firm Darae, told South Korean daily newspaper Chosun Ilbo that Samsung could be subject to the law because its headquarters in South Korea exports products to its U.S. affiliate. This raises suspicion that profits tied to the bribery had an impact on its U.S. operations.

In Samsung's case, analysts say a conviction could lead to huge fines that may undermine both its financial standing and its brand. To an extent, the conglomerate is already paying a price. The World Economic Forum excluded Samsung from its list of the Global 100 Most Sustainable Corporations in the World this year, for the first time in four years.

The Seoul Central District Court on Thursday rejected a request for a warrant to arrest the head of the Samsung Group, Jay Y. Lee. The head of the Samsung Group and vice chairman of Samsung Electronics will stay in place atop the country's most powerful company while the investigation will be continued.

Tags: SAMSUNG
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