United States: Analogic And BK Settlement In Line With US Law Enforcement Strategy

Criminal and supervisory authorities regularly settle enforcement actions. In light of these developments, we advise companies to take appropriate measures. This month we highlight the settlements of Analogic Corp. and subsidiary BK Medical ApS with the DOJ and SEC for alleged violations of the Foreign Corrupt Practices Act's books-and-records-provisions. The settlement with the SEC requires the companies to pay USD 7.67 million in disgorgement and USD 3.8 million in prejudgment interest. Furthermore, the former Chief Financial Officer of BK settled with the SEC for USD 20,000 for his role in the alleged conduct. He neither confirmed nor denied the allegations. The non-prosecution agreement with the DOJ includes a fine of USD 3.4 million. This settlement seems to indicate that the DOJ is bringing the "new enhanced strategy" into practice, as previously announced in 2015 (Yates Memo) and April 2016 (Foreign Corrupt Practices Act Enforcement Plan and Guidance/ FCPA Pilot), in motivating companies to voluntarily self-disclose, fully cooperate and remediate. It stresses the importance of self-reporting and full cooperation when irregularities are found in the company. But more importantly, it emphasises the importance of having the right compliance framework in place, giving the company the guidance and ability to respond appropriately to incidents.

Analogic Corp. (Analogic), a technology company specialised in medical equipment, and its subsidiary BK Medical ApS (BK) based in Denmark, settled with both the DOJ and SEC on 21 June for alleged violations of the books-and-records-provisions of the Foreign Corrupt Practices Act (FCPA). According to the DOJ and SEC, BK had a role in a number of transactions from 2001 until 2011 which were at a high risk for corruption, tax evasion or other criminal conduct. The DOJ's press releases state that after BK entered into a sales agreement with a distributor (often from Russia), the distributor would then allegedly instruct BK to send an invoice for an amount higher than the agreed sales price. The difference between the actual price and the amount in the invoice was sent to third parties by BK. BK is said to have followed these instructions, even though it did not have any business relationships with the third parties. Moreover, no due diligence was allegedly conducted on the payments, leaving the existence of a legitimate business purpose for the payments unknown. As a result, at least a portion of these payments was allegedly received by doctors working for Russian state-owned enterprises (that is, foreign public officials). According to the DOJ, BK caused Analogic to falsify its own books, records and accounts by stating that its conduct complied with both internal policy and official legislation. The Chief Financial Officer of BK allegedly played a large role in this matter.

In certain ways, the settlements reflect the 2015 Yates Memorandum and the recently published DOJ "Foreign Corrupt Practices Act Enforcement Plan and Guidance" (FCPA Guidance), including a one-year FCPA pilot. Under the pilot, companies can receive mitigation credit (in addition to the credit available under the U.S. Sentencing Guidelines) if they voluntarily self-disclose FCPA-related misconduct, fully cooperate with the DOJ and timely and appropriately remediate. In line with these guidelines, the DOJ's press release states that Analogic and BK will cooperate with investigations into individuals by foreign authorities. The DOJ's FCPA Guidance notes that intensifying its international approach is necessary to combat international corruption. The Analogic and BK settlements thus fit within the FCPA Guidance's international ambitions.

According to the FCPA Guidance, a company may receive up to a 50% reduction on the bottom end of the U.S. Sentencing Guidelines fine range if it:

  • voluntarily and fully discloses the misconduct
  • meets the additional requirements under the FCPA pilot
  • fully cooperates with the authorities and takes timely and appropriate remediation measures.

While BK received 30% mitigation credit, it might have received more credit if it had disclosed the results of its internal investigation on certain individuals, according to the DOJ.

The non-prosecution agreement sets out the factors that the 30% credit was based on:

  • BK received full credit for voluntarily and timely reporting the alleged incidents to the authorities.
  • BK did not receive full cooperation credit, since the DOJ felt that BK had not shared all relevant results from its internal investigation with the authorities. The DOJ specifically mentions that BK did not share the identity of several "state-owned entity end-users" and several statements by employees. Full cooperation is a requirement under the pilot to receive full credit (in addition to the credit available). It means active cooperation resulting in the disclosure of all relevant facts (See also In context 11 May 2016).

The non-prosecution agreement with the DOJ contains several other arrangements besides paying the USD 3.4 million fine. BK, for example, agreed to improve its internal compliance programme and to periodically report to the DOJ about this. BK has also taken extensive remedial measures (including implementing enhanced financial controls, FCPA training and a new distributor due diligence programme). Because of this, the DOJ did not appoint a compliance monitor.

These settlements also focus on the possible prosecution of the individuals involved. BK agreed to cooperate not only with further investigations by the DOJ, but also with possible investigations into individuals by foreign authorities, as advocated by the Yates Memorandum (see the In context of 14 October 2015).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.