French building materials manufacturer Lafarge has agreed to pay almost $780mn in fines and forfeitures to the US government, after pleading guilty to conspiring to provide material support to Isis and the Al-Nusrah Front in war-torn Syria.
The company was charged by federal prosecutors with making payments to both terrorist organisations at its cement plant in Jalabiyeh, Syria in 2013-2014. The US Department of Justice said the payments helped Lafarge’s local subsidiary make roughly $70mn in additional revenue.
Nearly $6mn in payments, some disguised as “donations”, were sent to Isis and Al-Nusrah for the purchase of raw materials and to ensure protection of staff, ensuring operations would continue, the DoJ added.
The case follows years of parallel legal challenges and investigations in France. A French court in May upheld charges of complicity in crimes against humanity against Lafarge, after the group’s bid to have them dismissed.
The company has in the past carried out its own internal investigation, and concluded that its Syrian unit paid armed groups to help protect employees at a factory there, but has long rejected that it was complicit in crimes against humanity.
US prosecutors displayed an Isis vehicle pass from April 2014, which asked fighters operating checkpoints near the plant to “kindly allow the employees of Lafarge Cement Company to pass through after completing the necessary work and after paying their dues to us”.
“In the midst of a civil war, Lafarge made the unthinkable choice to put money into the hands of Isis, one of the world’s most barbaric terrorist organisations, so that it could continue selling cement,” said Breon Peace, the US attorney for the eastern district of New York.
“Lafarge did this not merely in exchange for permission to operate its cement plant — which would have been bad enough — but also to leverage its relationship with Isis for economic advantage, seeking Isis’s assistance to hurt Lafarge’s competition in exchange for a cut.”
Lafarge, since 2015 a division of Swiss-based Holcim, said in a statement that it accepted responsibility for the wrongdoing and had worked with the DoJ to “resolve the matter”, adding it “deeply regret[s] that this conduct occurred”.
US authorities said the company crafted schemes with Isis as a “revenue-sharing agreement” based on the quantity of cement it could sell.
A senior Lafarge executive in 2014 told colleagues: “We have to maintain the principle that we are ready to share the ‘cake’, if there is a ‘cake.’ To me the ‘cake’ is anything that is a ‘profit’, after the amortisation and before financial expenses.”
Under the scheme, Lafarge also expected Isis to hamper competitors by blocking the sale of imported Turkish cement in areas controlled by the terrorist organisation or by levying taxes on competing cement supplies, allowing the company to increase its own prices, according to the DoJ.
The move against Lafarge comes as the DoJ takes a tougher enforcement stance against corporate malfeasance, implementing new policies to crack down on wrongdoing.
Lisa Monaco, deputy US attorney-general, said: “This case sends the clear message to all companies, but especially those operating in high-risk environments, to invest in robust compliance programmes, pay vigilant attention to national security compliance risks, and conduct careful due diligence in mergers and acquisitions”.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.