Ads
By
AFP
Published
Dec 18, 2014
Reading time
2 minutes
Download
Download the article
Print
Text size

Avon beauty firm pays $138 mn to settle China bribe probe

By
AFP
Published
Dec 18, 2014

NEW YORK, USA - US authorities on Wednesday fined the international cosmetics seller Avon Products $135 million to settle a corruption probe in China.

The global beauty supplier, known for its door-to-door and catalogue sales, bribed local officials with foreign travel and expensive trinkets such as Gucci bags and Louis Vuitton merchandise, the Securities and Exchange Commission said in a statement.

Foto: Avon


The SEC said Avon had violated the Foreign Corrupt Practices Act (FCPA) by failing to stop bribes to Chinese officials.

"The SEC alleges that Avon's subsidiary in China made $8 million worth of payments in cash, gifts, travel, and entertainment to gain access to Chinese officials implementing and overseeing direct selling regulations in China," the SEC said.

Avon was trying to be among the first to test the regulations, and eventually received the first direct selling business license in China in March 2006, the SEC said.

"Avon missed an opportunity to correct potential FCPA problems at its subsidiary, resulting in years of additional misconduct that could have been avoided," said Scott Friestad, an associate director in the SEC's enforcement division.

US media reported that Avon, founded in 1886, pleaded guilty at a federal court in New York on Wednesday to conspiring to violate the FCPA.

In reaching the proposed settlement, the SEC considered Avon's "cooperation and significant remedial measures," the SEC said.

In addition to the financial penalty, Avon is required to retain an independent monitor to review its compliance program with the FCPA for 18 months.

Avon is struggling in the wake of the economic slowdown in Brazil and Russia, its two main markets.

Copyright © 2024 AFP. All rights reserved. All information displayed in this section (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the contents of this section without the prior written consent of Agence France-Presses.