In this file:
· JBS : J&F's Bribery Settlements Highlight Compliance Breakdowns, Remediation Efforts
· J&F pays for making those ‘Manhattan-style’ bribes to Brazilian officials
· Brazil producing more meat using less land, JBS CEO says
· City gets $1 million donation from JBS USA
· Brazilian meatpacker’s FCPA settlement details widespread corruption
JBS : J&F's Bribery Settlements Highlight Compliance Breakdowns, Remediation Efforts
By Mengqi Sun, Dow Jones Newswires
via MarketScreener - 10/16/2020
Settlements between Brazil's J&F Investimentos SA and U.S. authorities to resolve charges arising from an alleged bribery scheme illustrate the importance of maintaining anticorruption programs and making sure top executives undergo compliance training.
J&F, which controls the world's largest meatpacker, JBS SA, pleaded guilty to a criminal charge of conspiring to violate the U.S. Foreign Corrupt Practices Act in a federal court in New York on Wednesday. J&F agreed to pay $128 million to settle the case.
The company admitted to paying millions of dollars in bribes to Brazilian government officials to obtain financing and other benefits for the company and J&F-owned entities, according to the agreement.
Separately, JBS and controlling shareholders reached an agreement with the Securities and Exchange Commission for alleged violations of the FCPA involving chicken producer Pilgrim's Pride Corp., which was acquired by JBS in 2009. JBS agreed to pay roughly $27 million in disgorgement to settle with the SEC.
The Justice Department said J&F didn't have anticorruption controls or a compliance program at the time of the misconduct but credited the company with taking remedial measures since then. J&F agreed to provide the Justice Department with reports on compliance improvements periodically for three years.
The SEC said Colorado-based Pilgrim's, the second-largest U.S. poultry producer, didn't enact its own code of conduct until 2015, more than five years after it was acquired by JBS, and was still in the process of implementing a formal antibribery compliance program that covered its employees and consultants in 2018. Pilgrim's also lacked compliance personnel during that period, the SEC said.
"The natural implications of this is that, without a sufficient anticorruption program, Pilgrim's was not in a position to catch the improper conduct that occurred," said Matteson Ellis, a lawyer at law firm Miller & Chevalier Chartered who specializes in international anticorruption compliance.
"Pilgrim's management was unaware of, and did not benefit from, the cited misconduct," a spokesman for Pilgrim's said. "Pilgrim's is not a party to the Order, nor does the Order impact or require any changes to Pilgrim's prior financial statements or internal control certifications."
Joesley and Wesley Batista, the billionaire brothers that controlled J&F and JBS and later served as directors at Pilgrim's, were also charged in the SEC case. They agreed to pay $550,000 each to resolve the allegations.
The Batistas signed a corporate code of conduct prohibiting bribery but neither received anticorruption or ethics training, according to the SEC. Efforts to reach the Batistas for comment weren't successful.
The SEC settlement underscored...
J&F pays for making those ‘Manhattan-style’ bribes to Brazilian officials
By Dan Flynn, Food Safety News by Marler Clark
October 16, 2020
As it turned out, Manhattan bank accounts and real estate were critical assets in bribing high government officials in a meat scandal in Brazil. And for that, J&F Investments S.A. has to pay millions to the U.S. government to escape criminal charges in North American for bribing Brazilian politicians and other officials. It was all part of an expensive settlement for the financial entity associated with the Batista family that’s behind JBS S.A.
J&F is the controlling shareholder of JBS S.A., the world’s largest meat company. It has pleaded to one count of conspiracy in violation of the U.S. Foreign Corruption Practices Act (FCPA), which is associated with the bribery of Brazilian officials and companies. Under a plea agreement, the U.S. Department of Justice is giving J&F a 50 percent credit for amounts paid to Brazilian authorities, cutting a $256.5 million fine down to $128.3 million.
The publicly-traded JBS S.A. is not a party to the agreement and does not have any liabilities arising from it.
To carry out the bribery scheme, J&F executives admitted using New York-based bank accounts to facilitate the bribery scheme and to make corrupt payments, including the purchase and transfer of a Manhattan apartment as a bribe, and holding U.S. meetings to discuss and further aspects of the illegal scheme.
James Dawson, special agent in charge of the Federal Bureau of Investigation’s Washington Field Office Criminal Division, said, “No matter where it occurs, the FBI and our global partners are committed to diligently rooting out corruption that betrays the public trust and threatens a fair economy.”
“With today’s guilty plea, J&F has admitted to engaging in a long-running scheme to bribe corrupt officials in Brazil to obtain financing and other benefits for the company,” said DOJ’s Brian Rabbitt, acting assistant attorney general for the criminal division.
“As part of this scheme, executives at the very highest levels of the company used U.S. banks and real estate to pay tens of millions of dollars in bribes to corrupt government officials in Brazil in order to obtain hundreds of millions of dollars in financing for the company and its affiliates. Today’s resolution demonstrates the department’s continuing commitment to combating international corruption and holding companies accountable for violations of the FCPA.”
J&F admitted to conspiring with others between 2005 and 2017 to violate the FCPA by paying bribes to government officials in Brazil in order to ensure that Brazilian state-owned and state-controlled banks would enter into debt and equity financing transactions with J&F and J&F-owned entities as well as to obtain approval for a merger from a Brazilian state-owned and state-controlled pension fund.
Specifically, DOJ said between 2005 and 2014, J&F engaged in a bribery scheme involving more than $148 million in corrupt payments that were promised and made to and for the benefit of high-level Brazilian government officials, including a then-high-ranking executive at the state-owned Banco Nacional (BNDES)
J&F was able to obtain hundreds of millions of dollars in financing from BNDES for the bribes. J&F also paid bribes worth more than $4.6 million to and for the benefit of a high-ranking executive of Fundação Petrobras de Seguridade Social, a state-controlled pension fund, in exchange for obtaining Petros’s approval of a merger benefiting J&F.
Also, J&F paid about $25 million in bribes to a high-ranking legislative official to secure hundreds of millions of dollars of financing from Caixa Econômica Federal, another Brazilian state-owned and state-controlled bank.
In addition to the DOJ-J&F agreement, it was also announced that JBS and the U.S. Securities & Exchange Commission (SEC) have settled with Pilgrim’s Pride Corp. for failure to maintain accurate books and records and internal accounting controls. JBS will pay $27 million to the SEC for a term of three years, during which extra government reporting will be required.
Pilgrim’s is not a party to the resolution and will not bear any liabilities arising from it, according to JBS.
“JBS and its controlling shareholder are committed to best corporate practices and close cooperation with authorities in all jurisdictions in which they operate. The agreements announced today represent an important step in their continuous efforts to improve their compliance and corporate governance programs,” said Guilherme Perboyre Cavalcanti with JBS investor relations.
Brazil producing more meat using less land, JBS CEO says
Reporting by Ana Mano; editing by Stephen Eisenhammer and Nick Zieminski, Reuters
October 16, 2020
SAO PAULO (Reuters) - Livestock suppliers in Brazil are producing more while using less land, as concerns mount about straining natural resources to produce food to feed a growing world population, Gilberto Tomazoni, global chief executive of the world's largest meatpacker JBS SA JBSS3.SA, said on Friday.
In remarks made during a panel discussion to mark World Food day, Tomazoni said meat production in Brazil tripled on a per hectare basis between 1990 and 2019.
Last month, JBS launched a 1-billion real fund to foster social and economic development in the Amazon, an initiative that the company says will help support local communities while also ensuring livestock production does not destroy the rainforest.
“We can guarantee 100% of our direct suppliers do not deforest the Amazon,” he told the panel. He added the company plans to use block-chain technology and will invest in other projects that would allow it to monitor the remainder of the supply chain.
The JBS fund is...
City gets $1 million donation from JBS USA
Brandon Summers, The Grand Island Independent (NE)
Oct 16, 2020
A recent donation from JBS USA to the city of Grand Island will provide “a destination playground for a destination park” for all.
The funds will go toward the creation of a new playground at Veterans Sports Complex and a 1-mile addition to the John Brownell Beltline trail to the eastern edge of the city.
During a special GITV broadcast Thursday, Mayor Roger Steele expressed gratitude on behalf of the city for the gift.
Steele spoke about a meeting he had Aug. 4 with Zack Ireland, JBS general manager in Grand Island.
“Mr. Ireland gave me a check for $1 million,” he said. “I’m very thankful for JBS’ donation to our city. JBS’ Hometown Strong initiative is proving to be a great benefit to our community.”
Parks and Recreation Director Todd McCoy called the donation “very generous.”
About $600,000 of the funds will go toward extending the trail east to the JBS Swift facility and $400,000 will go toward the new playground.
McCoy said Veterans Athletic Complex is “already an exciting facility.”
“It has 10 softball/baseball fields, 12 acres of soccer space, numerous picnic areas, walking trails that connect to Eagle Scout Park, and soon eight new pickleball courts will be constructed,” he said. “It has a splash pad and, because of this donation from JBS, will soon have an exciting new playground.”
McCoy showed illustrations of what the completed playground will look like...
Brazilian meatpacker’s FCPA settlement details widespread corruption
By Jaclyn Jaeger, Compliance Week
Oct 15, 2020
J&F Investimentos, a Brazilian holding company, has agreed to pay a criminal penalty of $256.5 million for its role in a widespread corruption scheme that took place over several years. JBS, a J&F majority-owned subsidiary and the largest meat producer in the world, reached a related settlement with the Securities and Exchange Commission, providing lessons in how not to operate an anti-corruption compliance program.
Under the Department of Justice plea agreement, filed Wednesday in the Eastern District of New York, J&F agreed to enter a guilty plea and pay the fine to resolve an investigation by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York concerning violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). The penalty reflects a 10 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range for partial credit received for J&F’s remediation and cooperation with the investigation.
J&F will pay half of its penalty (about $128 million) to U.S. authorities. The DOJ’s Fraud Section and the Eastern District of New York said it will credit the other 50 percent of the criminal penalty owed to payments J&F makes to its previously reached resolution with Brazilian authorities.
According to J&F’s admissions, between 2005 and 2017, through certain of its employees and agents, the company paid millions in corrupt payments to high-level government officials in Brazil in exchange for obtaining financing and other benefits for J&F and J&F-owned entities. In furtherance of the scheme, J&F used New York-based bank accounts through shell companies to make the corrupt payments.
Specific examples include:
· More than $148 million in bribes made to a then-high-ranking executive at Brazilian state-owned and state-controlled bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES) in exchange for hundreds of millions in financing from BNDES;
· $4.6 million in bribes made to a high-ranking executive of Brazilian state-controlled pension fund, Fundação Petrobras de Seguridade Social (Petros), in exchange for obtaining Petros’s approval for a significant merger that benefited J&F; and
· $25 million in bribes made to a high-ranking official in the legislative branch of the Brazilian government to secure hundreds of millions of dollars of financing from Brazilian state-owned and state-controlled bank Caixa Econômica Federal.
As part of the plea deal, J&F agreed for a three-year period to continue cooperating with the U.S. government in any ongoing or future criminal investigations; enhance its compliance program; and report to the government on its progress.
Among the considerations the DOJ said it weighed include J&F’s failure to voluntarily disclose the conduct, as well as the nature, seriousness, and pervasiveness of the offense, which included executives at the highest levels of the company and the payment of tens of millions of dollars in bribes to high-level government officials in Brazil.
In June 2017, J&F reached a leniency deal with the Brazilian Federal Prosecutor’s Office, agreeing to pay a fine of 8 billion reais (U.S. $1.4 billion) and to contribute 2.3 billion reais (U.S. $414 million) to social projects in Brazil. The Department said it determined partial crediting was appropriate “based on the specific facts and circumstances of this case in light of, among other things, the company’s prior efforts to coordinate with the Department and Brazilian authorities.”
SEC action ...
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