MTS Deferred Prosecution Agreement – A Comprehensive Overview
The MTS Deferred Prosecution Agreement is an agreement between the U.S. Department of Justice and MTS Systems Corporation that was entered into on June 10, 2021. The agreement was made to resolve criminal charges against MTS for violating the Foreign Corrupt Practices Act (FCPA).
What is the Foreign Corrupt Practices Act (FCPA)?
The FCPA is a federal law that prohibits U.S. companies and individuals from bribing foreign officials for business advantages. The law also requires companies to keep accurate and detailed records of their business transactions and financial reports. The FCPA is enforced by the U.S. Department of Justice and the Securities and Exchange Commission.
What was MTS charged with?
MTS was charged with violating the FCPA by having inadequate internal controls to prevent illegal payments to Chinese government officials. MTS was accused of making illegal payments to Chinese officials in order to win contracts for their products and services. The illegal payments were made through third-party agents and disguised as legitimate business expenses.
What is a Deferred Prosecution Agreement (DPA)?
A Deferred Prosecution Agreement is a legal agreement between a company and the government that allows a company to avoid criminal charges in exchange for certain requirements. A DPA is used when the government believes that a company has violated the law but does not want to pursue criminal charges if the company takes corrective action.
What are the terms of the MTS Deferred Prosecution Agreement?
Under the terms of the agreement, MTS will pay a penalty of $7.75 million to the U.S. government. The company will also implement new policies and procedures to prevent future violations of the FCPA. MTS will also retain an independent compliance monitor for three years to ensure that the company complies with the terms of the DPA.
What are the implications of the MTS Deferred Prosecution Agreement?
The MTS Deferred Prosecution Agreement is a reminder to companies that they must have adequate internal controls to prevent illegal payments to foreign officials. Companies that violate the FCPA can face severe penalties, including criminal charges and fines. The agreement also shows that the government is committed to enforcing the FCPA and holding companies accountable for their actions.
In conclusion, the MTS Deferred Prosecution Agreement is a significant development in the ongoing fight against corruption and bribery. Companies must ensure that they have robust internal controls to prevent illegal payments to foreign officials. The agreement also highlights the importance of cooperation between companies and government agencies to combat corruption and promote fair competition.