A Millicom subsidiary has agreed to pay $118 million as part of a deferred prosecution agreement with the US Department of Justice to resolve an FCPA charge over payments to Guatemalan officials.
Comunicaciones Celulares, or Comcel, will return more than $58 million in benefits from the payments and pay a $60 million fine, according to a 10 November announcement by the company. In a 6 November securities filing, the company said it has provided for an expense of $118 million in its third quarter and does not expect to incur any additional expenses.
The fine amount represents a 50% discount off the minimum penalty, or “the highest penalty discount available under applicable DOJ policy and more than has ever been granted to a company in an FCPA-related agreement of this kind”, according to Millicom.
The agreement does not require a corporate monitor; instead, the company must report directly to the DOJ throughout the two-year DPA, according to the announcement. The company added that this is a shorter period than the standard three-year term.
“Millicom welcomes today’s agreement, which resolves all issues associated with DOJ’s investigation,” the company said in the announcement. “Millicom and its operations are committed to operating with the highest ethical standards.”
The DOJ’s investigation into Comcel began in 2022, and the investigation continued throughout the department’s months-long pause on FCPA enforcement.
According to the company, Millicom first voluntarily self-reported alleged improper payments to the DOJ, as well as Swedish authorities, in 2015. Both authorities subsequently closed their investigations without any enforcement action.
Millicom said that it did not have operational control over Comcel until a 2021 acquisition. The DOJ subpoenaed Millicom in April 2022 for information on the company’s acquisition of Comcel, which had previously been a joint venture.
The company said it has been cooperating “fully and extensively” with the DOJ since then, including by providing information in a way that was “not possible” until after the acquisition.
Remediation steps included removing the general manager and other Comcel personnel who Millicom said were involved in the misconduct.
“Although this misconduct occurred when we lacked operational control of Comcel, Millicom has consistently taken all possible actions to remediate and correct it,” said Salvador Escalon, chief legal and compliance officer at Millicom, in the release. “As soon as we gained control of Comcel, we were finally able to build a stronger, more transparent operation.”
Counsel to Comcel
Covington & Burling
Daniel Suleiman, Veronica Yepez and Lanny Breuer in Washington, DC
Rivero Mestre
Jorge Alejandro Mestre in Miami
For the DOJ
Eli Rubin in Miami and Lorinda Laryea, Natalie Kanerva and Katherine Raut in Washington, DC