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Walmart Gets a Break, Mulls $300M Settlement

The investigation into Walmart’s alleged bribes in Mexico to obtain permits to build stores has led US authorities to ask the company to pay $300 million in fines. This is significantly less than the $1 billion settlement the Justice Department and the Securities and Exchange Commission were reportedly attempting to reach during the Obama administration, according to Reuters.

Walmart instigated a wide-spread investigation to look into employee behavior across the globe. The company currently has about 2,300 employees working on compliance and ethics, the company says.

The retail giant has not yet agreed to the settlement but is in the final stages of negotiation, according to reports. The company has already spent nearly $840 million on investigation and upgraded compliance operations.

Last month, Walmart said it has spent more than $141 million on ethics and compliance systems since 2013 to ensure compliance is up-to-date and accurate. The company also created a board-level Global Ethics, Compliance & Risk Committee. Walmart didn’t say this was in response to the Mexico bribery scandal, instead saying its ethics and compliance focus is part of its efforts to grow in this “new era of retail” and to position the business for sustainable growth and shareholder returns.

One challenge for companies that plead guilty to these types of crimes is that they can be blocked from winning government contracts, including access to the food stamps program which accounted for about $13 billion in sales last year, reports Retail Dive. But the article says that bribes or “gifts” are a common practice in parts of the world, necessary to obtain building permits and close other business deals. The Department of Justice has a guide on complying with the Foreign Corrupt Practices Act of 1977 to help companies adhere to business gift customs in other parts of the world while still remaining in compliance with laws and regulations.

The settlement would require a plea of guilty by at least one Walmart subsidiary, but the parent company would not be charged, Fortune reports.

 

 

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