Date
16 December 2017
Avon failed to stop its subsidiary in China from paying bribes worth US$8 million to government officials. Photo: Reuters
Avon failed to stop its subsidiary in China from paying bribes worth US$8 million to government officials. Photo: Reuters

US watchdog fines Avon US$135 mln for China bribes

The Securities and Exchange Commission of the United States slapped a fine of US$135 million on cosmetics direct-selling giant Avon Products to settle a corruption probe in China.

The global beauty supplier, known for its door-to-door and catalogue sales, bribed local officials with foreign travel and expensive gifts such as Gucci bags and Louis Vuitton merchandise, Agence France-Presse reported, citing a statement from the US regulator.

Its subsidiary in China made US$8 million worth of payments in cash, gifts, travel, and entertainment to gain access to Chinese officials implementing and overseeing direct selling regulations” in the country, the statement said. 

The company violated the Foreign Corrupt Practices Act (FCPA) by failing to stop bribes to Chinese officials.

“Avon missed an opportunity to correct potential FCPA problems at its subsidiary, resulting in years of additional misconduct that could have been avoided,” Scott Friestad, an associate director in the SEC’s enforcement division, was quoted as saying.

But a settlement was struck after the regulator considered the company’s “cooperation and significant remedial measures”, the report said.

As part of the settlement, Avon will also hire an independent monitor to review its compliance with the FCPA for 18 months, it added.

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CG

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