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VimpelCom Agrees To Pay $795 Million To Settle Uzbek Bribery Claims

February 18, 2016
by RFE/RL

WASHINGTON -- VimpelCom, the Dutch-headquartered telecom that operates one of Russia's largest mobile communications providers, says it has agreed to pay $795 million to resolved U.S. and Dutch investigations into a bribery scheme in Uzbekistan.

The Amsterdam-based company confirmed the settlement deals in a February 18 statement.

The U.S. Justice Department said in an announcement the same day that VimpelCom had admitted bribing officials in Uzbekistan to gain licenses.

It was the most significant development to date in the spiraling multinational investigation into alleged bribery and other illegal payments by several major telecoms looking to invest in the Central Asian nation.

VimpelCom CEO Jean-Yves Charlier said in a statement that the "wrongdoing…which we deeply regret, is unacceptable."

The Justice Department said VimpelCom had admitted to a conspiracy to pay more than $114 million between 2006-2012 to an Uzbek official in order to enter the Uzbek market, one of the largest in the region.

That official is not named in the announcement, but court records, legal documents, and other media accounts have identified her as Gulnara Karimova, the daughter of authoritarian Uzbek President Islam Karimov.

VimpelCom "built their business in Uzbekistan on over $114 million in bribes funneled to a government official," Preet Bharara, the U.S. District Attorney for the District of New York, said in a statement. "Those payments, falsely recorded in the company's books and records, were then laundered through bank accounts and assets around the world, including through accounts in New York."

As part of the settlements, the Justice Department said, VimpelCom agreed to pay a $230 million criminal penalty to both U.S. and Dutch authorities, as well as a $375 million penalty to the U.S. Securities and Exchange Commission (SEC).

The deal was announced as the Justice Department filed a civil complaint seeking the forfeiture of $550 million in Swiss bank accounts tied to corrupt payments that VimpelCom and two other companies made to the Uzbek official.

VimpelCom is controlled, through a series of intermediary companies, by Russian billionaire Mikhail Fridman.

Source: http://www.rferl.org/content/vimpelcom-fine/27560774.html

Copyright (c) 2016. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.