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U.S.DepartmentofJustice
CriminalDivision
DecemberWilliamJ.Bachman, Esq.Jon R. Esq.Williams&ConnollyLLP725Twelfth N.W.Washington,D.C.20005
Re: ArcherDanielsMidlandCompany
DearMessrs.Bachman andFetterolf:
Onthe understandings specifiedbelow,theUnitedStatesDepartmentofJustice,CriminalDivision, Fraud Section and the United StatesAttorney'sOffice for the CentralDistrictofIllinois (collectively,the "Department")will notcriminallyprosecute Archer DanielsMidlandCompany (the "Company"), a corporation organized under the laws of Delaware andheadquartered inIllinois,or anyofitspresentor former parents, subsidiaries, or affiliates exceptas setforth inthe Plea AgreementwithrespecttoAlfredC.ToepferInternational(Ukraine)Ltd.
Ukraine")for any crimes (except forcriminaltaxviolations,astowhichthe Departmentdoesnot make any agreement) related to violations of the internal controls provisions of theForeignCorrupt Practices Act Title 15,UnitedStatesCode, Sections 78m(b) and
arisingfromor related toimproperpayments by the Company's subsidiaries, affiliates,orjointventures inUkraineand Venezuela, as describedinAttachmentAattached hereto,whichisincorporated hereinbyreference,and any other conductrelatingtointernalcontrols,books andrecords, orimproper payments disclosed by the Company to the Departmentpriortothedateonwhichthis Agreement was signed. TheDepartmententersintothisNon-Prosecution Agreementbased, in on the following factors: (a) the Company's timely,voluntary, and thoroughdisclosure of the conduct; (b) the Company's extensive cooperation with the Department,including conducting a world-wide risk assessment and corresponding global internalinvestigation,expanding thescopeoftheinvestigationwherenecessarytoensurethereviewwaseffective and thorough, making numerous presentations to the Department on the statusfindings oftheinternal investigation,voluntarilymakingcurrent and former employees available
for interviews,voluntarily producing documents to the Department, and compiling relevantdocuments by category for the Department; (c) the Company's early and extensive remedialefforts already undertaken at its own volition, and the agreement to undertake furtherenhancementsto its compliance program as described in Attachment B (Corporate ComplianceProgram); and(d)the Company's agreementtoprovideannual,writtenreportstothe Departmenton its progress and experience in monitoring and enhancing its compliance policies andprocedures, as described inAttachmentC(Corporate ComplianceReporting).
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Itis understood that the Company admits,accepts,and acknowledges responsibilityforthe conduct setforth inAttachment A andagreesnottomake anypublicstatementcontradictingAttachmentA.
ThisAgreement doesnot provide any protection against prosecution for any crimesexcept as set forthabove, and appliesonlyto the Company and itspresentor formerparents,subsidiaries, and affiliates, anddoesnot apply to any other entities or to anyindividuals. TheCompany expresslyunderstandsthat the protections provided under this Agreement shall notapplyto any acquirer orsuccessorentityunlessanduntilsuch acquirer orsuccessorformallyadoptsandexecutesthisAgreement.
The Company's obligations under this Agreement shallhavea term ofthree(3)yearsfromthedatethat this Agreement is executed, except as specifically provided in thefollowingparagraph. It is understood that for thethree-yearterm ofthisAgreement, the Company shall:(a) commit no felony underU.S.federal law; (b)truthfully and completely disclose, consistentwithapplicable law and regulationsincludingdataprotectionandprivacylaws, allinformationnotprotected by avalidclaimofprivilegeorworkproductwithrespectto theactivitiesoftheCompany, its officers, directors, employees, and others concerning all matters related toimproperpayments, internal controls, or false books and records aboutwhichthe Departmentinquiresofit,which informationcan beusedfor any purpose, except as otherwiselimitedinthisAgreement; and (c)bringto the Department's attention asquicklyas is practicable all conductby,orcriminalinvestigations of, the Company, any ofitsemployees, or its subsidiaries relatingto any felony under U.S. federal law that come to the attention of the Company's seniormanagement, as well as any administrative proceeding or civil action brought by anygovernmentalauthoritythatallegesfraudorcorruption byor against the Company.
Until the dateuponwhich all investigations and any prosecution arising out of the
conduct describedinthis Agreement are concluded, whetheror notthey are concludedwithintheterm of this Agreement, the Company shall, subject to applicable laws or regulations: (a)cooperate fully with the Department, the Federal Bureau ofInvestigation,and any other lawenforcementagencydesignated by the Department regarding matters arising outofthe conductcovered by this Agreement; (b)assistthe Departmentinanyinvestigationor prosecution arisingoutoftheconduct covered by this Agreement byproviding logisticaland technical support forany meeting,interview,grandjuryproceeding, or anytrialor other court proceeding;(c)use itsbesteffortspromptlytosecuretheattendanceandtruthfulstatementsortestimonyofanyofficer,director,agent,or employeeofthe Company at any meeting orinterviewor before the grandjuryorat anytrialor othercourtproceeding regarding mattersarisingoutofthe conduct covered bythisAgreement; and (d) provide the Department, uponrequest,consistent withapplicable law
and regulationsincludingdataprotectionandprivacylaws, allinformation,documents, records,orother tangible evidence not protected by avalidclaimofprivilegeorworkproduct regardingmattersarisingoutofthe conduct covered bythisAgreement aboutwhichthe Department or anydesignatedlawenforcementagencyinquires.
Itis understood that the Company has agreedto pay a monetary penalty of $9,450,000provided,however, that anycriminalpenalties that might be imposed by the Court onACTIUkraine in connection with its guilty plea and plea agreement entered into simultaneously
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herewithwillbe deducted fromthe $9,450,000 penaltyagreedto under this Agreement. TheCompanyagreesto pay this sum,if any, to theUnitedStatesTreasurywithinten (10)businessdaysof the ofACTIUkraine in connectionwith itsguiltyplea and pleaagreement.The Company acknowledges that no tax deduction may be sought in connectionwith such
payment.
Itis understood that the Companywillmaintain,or asnecessary,continue to strengthenits compliance, bookkeeping, and internal controlstandards and procedures, as set forth inAttachment B. It is understood that the Company will report to the Departmentperiodicallyregarding remediation andimplementationof the compliance program and internalcontrols,policies,and procedures, as describedinAttachmentC.
Itis understood that,if the Department in its sole discretion determines that,duringthethree-yearperiodfollowingthedateofthisAgreement, the Company hascommittedany felonyunderU.S. federal law aftersigningthis Agreement, the Company has deliberately given false,incomplete, or misleading testimony or information at any time in connection with thisAgreement, or the Company otherwise has violated any provision of this Agreement, theCompany shall thereafter be subject to prosecution for anyviolationof federal law aboutwhichthe Department has knowledge, including perjury and obstruction of justice. Any suchprosecution that is not time-barred by the applicablestatuteoflimitationson thedatethat thisAgreement is executed may be commenced against the Company,notwithstandingtheexpirationofthestatuteoflimitationsduringthe term ofthisAgreement plus oneyear. Thus, by signingthisagreement,the Companyagreesthatthe statuteoflimitationswithrespecttoany prosecutionthat is not time-barred as of thedatethis Agreement is executed shall betolledfor the term ofthisAgreement plus oneyear.
Itis understood that, i fthe Department in its sole discretion determines that, during the
three-yearperiodfollowingthedateofthisAgreement, the Company hascommittedany felonyunderU.S. federal law aftersigningthis Agreement, the Company has deliberately given false,incomplete,or misleading testimony orinformationin connectionwiththis Agreement, or theCompany otherwise hasviolatedanyprovisionofthisAgreement:(a)allstatements madeby theCompany to the Department or other designated law enforcementagents,includingAttachmentAhereto, and anytestimonygivenby the Company before a grandjuryor othertribunal,whetherbefore or after the execution of this Agreement, and any leads from such statements ortestimony, shall be admissible in evidence in any criminal proceeding brought against theCompany; and (b) the Company shallassertnoclaimunder theUnitedStatesConstitution,anystatute, Rule ofthe Federal RulesofEvidence, or any other federalrulethat suchstatementsor anyleadstherefrom are inadmissible orshouldbesuppressed. By signingthisAgreement, theCompany waivesallrightsintheforegoingrespects.
In the event that the Department determines that the Company has breached thisAgreement, the Departmentagreesto provide the Companywithwrittennotice of such breachpriorto institutingany prosecutionresultingfromsuch breach. The Companyshall,withinthirty(30) daysofreceiptofsuchnotice,havetheopportunityto respond to the Department inwritingto explainthe nature and circumstances of such breach, aswellas the actions the Company has
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taken toaddressand remediate thesituation,whichexplanation the Department shall consider indeterminingwhethertoinstitutea prosecution.
It is further understood that this Agreementdoesnotbindany federal,state,local,or
foreignprosecuting authority other than the Department. The Departmentwill,however,bringthe cooperationofthe Company to the attentionofother prosecuting and investigative offices,i frequestedby the Company.
It is further understood that the Company and the Department may disclose thisAgreementtothepublic.
Withrespectto this matter,fromthedateofexecutionofthisAgreementforward,thisAgreementsupersedes all prior,if any, understandings, promises and/or conditions between theDepartment and the Company. No additional promises,agreements,or conditionshave beenentered into other thanthosesetforthin this Agreement andnonewillbe entered intounlessinwritingand signed byallparties.
Sincerely,
JAMESA.LEWIS KNOXChief,Fraud SectionCriminalDivision
UnitedStatesAttorneyfor theCentralDistrictofIllinois
DepartmentofJustice
EugeneMiller
AssistantUnitedStatesAttorney
By:
TrialAttorney,Fraud Section
AGREEDAND CONSENTED TO:
ArcherDanielsMidlandCompany
By:D.CameronFindlaySeniorVicePresident,General Counsel& Secretary
ArcherDanielsMidland Com
By:
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ATTACHMENTA
STATEMENTOFFACTS
This Statement ofFacts is incorporated by reference as part of the non-prosecution
agreement,dated December between theUnitedStatesDepartmentofJustice,CriminalDivision, Fraud Section and theUnited StatesAttorney'sOffice for the CentralDistrictof
Illinois(collectively,the "Department") and Archer DanielsMidlandCompany("ADM"or"Company"). The Department and the Companyagreethat the following facts are true and
correct:
1. ADM was headquartered in Decatur, Illinois,and incorporated in Delaware.
ADMissued and maintained aclassofpubliclytraded securities registered pursuant to Section
12(b)ofthe Securities ExchangeActof1934(15 781),whichtraded on theNewYorkStock Exchange and, therefore, was an "issuer"within the meaning of the Foreign Corrupt
Practices Act 15 U.S.C. 78dd-l. ADM manufactured and sold protein meal,vegetable oil, cornsweeteners,flour, and other value-added foodand feedingredients, andprocessedoilseeds, wheat, cocoa, and otheragriculturalcommodities.
Relevant Entities and Individuals
2. AlfredC.ToepferInternational(Ukraine)Ltd.("ACTIUkraine")was an indirect
80%-owned subsidiary ofADM headquartered in Ukraine. ACTI Ukraine traded and sold
commoditiesinand outsideofUkraine.
3. Alfred C. Toepfer International G.m.b.H.("ACTIHamburg") was an indirect
subsidiary ofADM headquartered in Germany. ACTIHamburg traded and sold
commoditiesinand outsideofGermany.
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4. ADM LatinAmerica("ADMLatin")was a owned subsidiary ofADMand a Delaware corporation and, therefore, was a "domestic concern"withinthe meaningofthe
Foreign CorruptPracticesAct 15 U.S.C. 78dd-2. ADM Latin acted as ajointventure partner on behalf ofADMin certainLatinAmerican countries, including Venezuela.
ADMLatinwas responsible for the accounting,invoicing,and paymentsrelatingtocustomersof
itsjointventures,includingitsjointventureinVenezuela.
5. ADM de Venezuela Compania Anomina ("ADM Venezuela") was a joint
venture between ADM Latinand several individuals in Venezuela ("jointventure partners").
Oneofthejointventurepartnerswasahigh-levelexecutive atADMVenezuela ("ExecutiveA").
ADMLatinowned 50%of ADMVenezuela and thejointventurepartnersowned the other 50%.
AD M Venezuela negotiated the sale of ADM's agricultural commodities to customersin
Venezuela, andADMLatinhandled the accounting,invoicing,and payments inconnectionwith
thosesales.
6. Vendor 1was aU.K.export company thatusedboth truck andrailservicesfor
the export ofgoods fromUkraine. From 2002 to 2008,ACTIUkraine and ACTIHamburg
retained Vendor1to provide export-related services.
7. Vendor 2 was aUkrainian insurance company that provided insurance policies
for,interalia,commodities. From 2007 to 2008,ACTIUkrainemadepayments to Vendor 2,
whichi tclaimed were for insurance policiesforACTIUkraine's commodities.
8. Industrias DianaC.A.
Diana") was anoilcompanyheadquarteredin
Venezuela that waswhollyownedbyPetroleosde Venezuela S.A., Venezuela's state-owned and
-controllednationaloilcompany. Industrias Dianawasa customerof ADMLatin.
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9. Broker 1 was a third-partyagentthat purportedly performed brokerage services
for customersofADM Latin,including Industrias Diana, in connection with thepurchaseof
commodities.
ConductRelatingtoUkraine
10. At certain times between in or around 2002 and in or around 2008, theUkrainian
government did nothavethe money to pay value-added tax ("VAT") refunds that it owed to
companiesfor thesaleofUkrainiangoodsoutsideofUkraine. Duringthattime,ACTIUkraine
andACTIHamburgengagedinmultiplefraudulentschemesinvolvingthe use ofVendor1and
Vendor 2 to cover up bribes paid to Ukrainian government officials inexchange forthose
officials' assistanceinhelpingACTIUkraine obtainVATrefunds. Intotal,ACTIHamburg and
ACTIUkraine paid roughly $22millionto Vendor 1and Vendor 2 topasson nearly allofthat
money as bribestoUkrainiangovernmentofficialstoobtain over million in VATrefunds.One suchschemeinvolved overpaying Vendor 1for commodities by an amount
that Vendor 1could use to bribe government officials in order to obtainVATrefunds on behalf
of ACTIUkraine. To cover Vendor 1for thecostofthe bribe and to pay Vendor 1a handling
fee for the bribe,ACTIUkraine sold commodities to Vendor1for a certain price. Vendor1then
soldthosecommodities toACTIHamburg for a higherprice,whichincludedthe amount Vendor
1paid for the commodities, shippingcosts,the amount of the bribe, and a handling fee. The
amount paid to Vendor1 inconnectionwiththe bribe generally equaled eighteen (18)percentof
theVATrefund obtained.
12. A second scheme involved purchasing unnecessary insurance policies from
Vendor 2 so that Vendor 2 could use nearly all of that money to pay bribes to government
officialsin order to obtainVATrefunds on behalfofACTIUkraine. From 2007 to 2008,ACTI
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Ukrainepurchased unnecessary insurance policies for its fromVendor 2 withpremiums equal to eighteen (18) percent of the VAT refunds they received. ACTIUkraine
providedVendor2 withalistingoftheassetstobe coveredby thepolicythesamedayor theday
after itwas learned thatACTIUkrainewasgoingtoreceive aVATrefund.
13. In or around July 2002, executives from ACTIHamburg traveled to ADM's
headquartersin Decatur, Illinoisforbusinessmeetings. In one ofthosemeetings,theseACTI
executives metwith executives from ADM's tax department and discussed ACTIUkraine's
abilityto recover VATrefunds and the way inwhich ACTIUkraine was accounting for the
write-downofthoserefunds. Duringthis discussion, theACTIHamburgexecutives stated that
the way inwhichACTIUkraine was recovering itsVATrefunds was by making charitable
donations.
14. Onor about October anADMexecutiveinthe tax departmentsentan e-to the headofaninternationaltaxorganizationandstated, "Oneofouraffiliatesoperatesin
theUkraine. Inorder to recover 100%oftheirinputVATtheyhaveto pay30% ofthe amount
to local charities. The charitable amount is not deductible. Is this common practice in the
Ukraine? Is this legal? Is there any way toavoidhaving to pay the 30% in order to get the
100%?"
15. On October 8, 2002, the AD M executive referenced in Paragraph 14 above
forwardedthe e-mail referenced in Paragraph 14 above to two other executives inADM'stax
and stated that he had spokenwiththe headoftheinternationaltaxorganizationand
that "thebottomlineis thatACTIisgettingscrewed by someone...[T]heconsensusis that there
is no waylegislation couldrequirethissituation. Itcouldverywellbe alocaltaxauthorityissue.
If ACTIwould likewecouldhavethe [taxorganization]addressthisissuewiththelocaltax
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authorities as apolicymatter and not a company specificissue. Theycouldraise theissuewith
someofthe Tax Serviceheadquarterspeoplewhothe[taxorganization]has had overtothe US
andwiththeDeputyMinisterofFinance. The[taxorganization]couldgiveACTIaveilto hide
behindas thisissueisaddressedwiththe authorities and,hopefully, results in a fix forACTI.
LetmeknowwhatACTIthinksaboutthis."
16. On or about October 24, 2002, one oftheADMexecutives who received the e-
referenced inParagraph 15 abovesentan e-maii to the othertwoexecutives on the e-mail
referenced in Paragraph above,summarizingthefollow-upmeeting he hadwithexecutivesfrom ACTIHamburg. Inthee-mail,theADMexecutiveoutlinedsixtaxissuesrelatingtoACTI
entities that he discussedwithACTIHamburgexecutives,includingtheVATrefunds forACTI
Ukraine,and stated,"[ACTI's]current procedure is to book the inputVATas a balancesheet
receivable andwriteitdownonaverageof30%a year (depending on interestrates,devaluation,
to [an executive at ACTIHamburg] it is a fight every year [to get VAT
refunds] butoverallhethinksthat Toepfer has good contactswithpoliticiansand the authorities
intheUkraine. I mentioned that [theADMexecutive referenced in Paragraph 15 above] had
somegood contacts aswellwithinbusinessorganizations operatingintheUkrainelikethe [the
taxorganizationreferenced inParagraph above]whichalsomightbehelpful. Theissue hereis that [the Hamburg executive]to[id]me that the Toepfer's contacts usually ask for'donations'. I askedhimhow much werethese'donations' and he answered that theycouldbe
up to 20% of the VAT receivable. My concern is thatthese 'donations' are not legal, not
deductible,are SubpartFincome and againstADMcorporate compliancepolicy. Additionally,I
am notsurethat the way they are booking thisVATreceivable is USGAAP. I am open to
suggestionsonhow toproceedon this."
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17. In or around 2004,ADM established ajointventure in Ukraine between ADM
and a Swiss company. In connectionwiththe creation ofthejointventure,ADMretained an
accountingfirmtoperforman analysisoftaxissuesthatmightarise.
18. On or aboutApril30, 2004,ADM'saccountingfirm senta letter to twoADM
executives, stating: "There are a number of structures aimed atfacilitationofVATrefund that
are widespreadin ofthesestructuresbearlegalrisks and may be challenged bythe taxauthorities. Moreover,structuresnormallyenvisage thattheexporter obtainsVATrefund
witha discount.Fromthe discussionsduringour meetinginOdessawe learned that [theSwissjointventure company] currently implements variousVAToptimizationstructures at its
subsidiary and plans tohavethem implemented at thejointventure. Sincethesestructures often
lacktransparency and sometimeshavetax and legal risks attached, we believe there is a need to
performa more detailed analysisoftheirapplicabilityat thejointventure."
19. In or around November 2006,ADM's accounting firmconducted an audit of
ACTIUkraineand discovered a "reserve" kept onACTIUkraine's books equal to apercentage
oftheVATrefunds Ukrainewasowed. As a resultofthisdiscovery, executives atADMquestioned executives atACTIHamburgandACTIUkraineabout the reserve.
20. On or about January 12, 2007, an executive atADMsentane-mailto executives
atACTIHamburg andACTIUkraine about thereservereferenced in Paragraph above, andasked, "Regarding the provision for the VAT receivable, I was wondering if there was any
formula you used to come up withthe 20% provision,perhaps basedon the ageing of the
amountsdue?"
21. On or about January 2007,inresponseto the e-mail referenced in Paragraph20 above, an executivefromACTIHamburgsentane-mailstating,"Onthe one hand, wehave-
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most probably - to pay a price for recovering theVATfromthe authorities. The price range,
whichwe heard about is between 10%up to 35% insome depreciationof20% isan estimation - tothebestofour actualknowledge- about thecosts,whichwehavetospendfor
recovering about 5% interest and about realcostsforrecovering."22. On or aboutJanuary23, 2007, upon learning thatACTIUkraine had recovered a
VATrefund of approximately million, anADMexecutive notified several otherADMexecutives about the refund.
23. On or about January 23, 2007, one of the notified executives referred to in
Paragraph22abovesentane-mailto otherADMexecutives, stating, "Canyou findout what the
basisofpayment was. Doesit catch-upACTI'sclaims through a certain point in time or was it
basedonsome%ofthe amount owed?"
24. On or about January 23, 2007, an ADM executive responded to the e-mail
referenced inParagraph23aboveandstated, " Ispokewith [anexecutive atACTIHamburg]and
he said this isfrom thecollectioncamewithaprice,the price being the governmentrequired a 'depreciation' (as [theACTIHamburg executive] called it) of 18% basically, the
companies owed the moneyfromthe government had towriteoff 18% to collect this amount.
He is hopefulthereis no more 'depreciation' but hedoesnothavea clear picture as to when the
paymentmightbe receivedor howthegovtwillsettle the balance."
25. On or aboutJanuary30, 2007, an executivefromACTIHamburgsentan e-mail
to twoADM executives, stating,"Just to give you a further up-date: Meanwhile, wehave
received further VAT-amounts ofUAH 152.2million EUR 22.8million). Costsfor thistransaction amount to We are covered by our depreciation,whichwehavebooked as perendofNovember 2006."
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26. Duringthistime period,in fact, there were not charitable donations orlegitimate
depreciation as referenced intheparagraphsabove. Rather,ACTIUkraineand HamburgwerepayingtheseamountstoVendor1andVendor2forthe piuposeofpassingonnearlyallof
the moneytopay bribestogovernmentofficialsto obtainVATrefunds.
27. Between 2002 and 2008, despite ADM executives knowing the concerns
described above, ADM failed to implement sufficient anti-bribery compliance policies and
procedures, includingoversightofthird-partyvendor transactions, to prevent corrupt payments
Hamburg.
ConductRelatingtoVenezuela
28. From at least in or around 2004 to in or around 2009, when customers in
Venezuela purchased commodities through ADM Venezuela, the customers paid for the
commoditiesvia payment toADM Latin. During this time period, a number of customers
overpaidADMLatinforthecommoditiesbyincludinga brokeragecommissioninthe costofthe
commodities. Attheinstructionof ADMVenezuela,includingExecutiveA,andADMLatin's
customers, rather thanrepayingthese excessamounts to the customerdirectly,ADMLatinmade
payments to third-party bank accounts outside of Venezuela,which,in many instances, were
used to funnel payments to accounts owned by employees orprincipalsof the customer. In
addition,ADMVenezuela personnel prepared invoices toADMLatin's customers thatviolated
Venezuelan laws and regulations regardingforeigncurrencyexchanges.
29. In or around 1998, as part ofADM's evaluation of a prospectivejointventure
with Joint Venture Partner, ADM employees reported to ADM's management that "some
businesspractices [ofthejointventure partners],primarilyattributable to the obtainingimport
licenses in Venezuela and invoicing practices used to allow payment to principles for
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'commissions' off shorecouldbe construed asviolationsof the ForeignCorruptionPractices
Act. Theseare practices thatseemto be common for operations ofthisnature but areviewis
needed to insure we arecomfortablethat wewouldnot beviolatinganylaws." The report also
stated that Venezuelan customers of the joint venture partners at times requested that
"commissions" be addedtothepriceatwhichthejointventure partnerssoldthemgrainand then
subsequentlyinstructedthatthese"commissions"bewiredtoaccountsintheUnitedStatesunder
the customer'scontrol.
30. Inresponsetothisreport,ADMidentifiedthe customer"commission"practice as
abusinessriskand recognized that customers may attempt toengagein such transactionswith
ADM Latinthrough the prospectivejoint venture, and instituted apolicythatprohibitedthe
repayment ofexcessfunds to any account other than thatoriginallyused by the customer to
make thepayment.
31. However, althoughthispolicywas madeknowntoExecutiveA andsomeADM
Venezuela employees, it wasinitiallynotformalized and from in or around 1999until in or
around 2004 thesamepracticescontinued. The customers submittedexcesspayments toADM
Latin,claimingthattheoverpaymentwasattributable todeferredcreditexpenses("DCE").DCE
referstoacostingbuiltintocontracts to coveruncertainfuturecostssuch as vessel delay. When
the customer, through Executive A and others atADM Venezuela, instructedADM Latinto
returntheexcessDCEpayments, rather thaninstructingADMLatintoreturnthe money to the
samebank accountfromwhich
it came, the customer instructedADMLatinto pay the money
into different bank accounts outside of Venezuela in the name ofthirdparties. These DCE
refundpayments were handledbyADMLatin's creditdepartment.
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32. In or around 2003, Venezuela enacted currency exchange controls that were
administered through the de Administracion de Divisas ("CADIVI"). Laws andregulations enacted thereafter established an official rate for obtaining foreign currency for
imports,whichrequired that in order to obtainU.S.dollars at theofficial rateforpurchasesfor
ADMLatin,customersneededto submit detailed documentation,includinginvoices, toCADIVI
forapproval. Atallrelevant times, Venezuelan laws and regulationsdidnot authorizereleaseof
U.S.dollars to an importer for thepurposeofpaying a customers' brokerage commission, and
furtherrequired that any commission amount be specifically itemized on the invoicespresented
to CADIVI for Despite theserequirements, ADM Venezuela personnel preparedinvoices tocustomersof ADMLatinfor thepurposeoftheir submission toCADIVIthatdidnot
specificallyreference the commission amounts thatwereincludedinthecommodityprice.
33. In or around 2004,ADMconducted an auditof ADMVenezuela due to anissue
pertaining to Executive A and uncovered the payments to third-party bankaccountsbeingmade
through DCE. Although ADM took some remedial measures, including terminating the
employment of the credit employee who had signed off on the refunds, conducting limited
trainingon compliance foritsjointventure partners, institutingawritten prohibitingrefundpayments ofDCEto bankaccountsdifferent than theaccountsfromwhichthe money
came,thepolicywas narrowly drawn only to cover DCE payments. ADMdid not trainADM
Latinemployees anddidnot takeadequatestepstomonitorADMLatinandADMVenezuela to
prevent such paymentsinforms other thanDCE..
34. Frominor around 2004 toinor around 2009, various customers,withthe help of
ADM Venezuela, including Executive A, began classifying these additional expenses as
"commissions" or "commissions K,"rather thanDCE, whichwereprocessedby the accounting
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department atADM Latin,rather than the credit department. Therefore, when thecustomers
instructed that the excess"commissions" be paid to third-party entities at third-party bank
accounts,ADMLatinauthorized andmadethe payments.
35. Inor around 2008, ExecutiveAandothersatADMVenezuela negotiated thesale
ofsoybeanoilfromADMLatinto Industrias Diana for a price of $1,210 per metricton,which
was projected to equalroughly$9.68million.
36. On or about December $9.68millionwas transferred intoADMbank account under aguaranteeagreement.
37. On or about January 7, 2009, ADM Venezuela transmitted to ADM Latin a
breakdown of the actualcostsof the transaction. The breakdown of thecostsincluded, inter
alia,a commission of $1,735,157.49 to be paid to Broker1despitethe fact thatBroker1did not
haveany involvementinthe negotiation orsaleofthesoybeanoil.
38. Subsequently, ADMVenezuelasentan invoice to Industrias Dianawhichbroke
outallofthe variouscostsithad transmittedtoADMLatinexcept the commission amount. The
commission amount was hiddenwithinthetotalinvoiceamount.
39. In or around February 2009, Broker1submitted aninvoicetoADMLatinfor the
$1,735,157.49 commission amount,whichADMLatinpaid to Broker bank account. Broker1 then transferred this amount, in large to an account in thenameof an employee ofIndustrias Diana.
40. On a numberofother occasions, ADMLatinmadepayments to Broker l's bank
account in connection with thepurchaseof commodities by other customers. Broker 1 then
transferred thoseamounts, in large part, to bankaccountsoutside of Venezuela in thenameof
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theprincipalsofthosecustomers. Intotal,ADMLatintransferredroughly$5millionto Broker
1.
41. Roughly ninety-eight (98) percent of the money transferred byADM Latinto
Brokerl's bank account at the instruction ofcustomerswas then transferred fromBroker l's
accounttoaccountsoutsideofVenezuelaownedbyoneoftheprincipalsofthe customers.
42. For example, on or aboutNovember Broker1transferredapproximatelyto an accountownedandcontrolled bytheprincipalofa customerof ADMLatin.On
or about November 19, 2007, Broker 1 transferred approximately $58,798.87 to thesame
account.
43. Similarly,on or about November 20, 2007, Broker 1 transferred approximately
$107,281.42 to an account owned andcontrolledby theprincipalof another customerof ADM
Latin.
44. In addition, Broker 1madetwo transfers, totaling approximately $38,551, to
accountsowned andcontrolledby ExecutiveA,aswellas numerous transfers to a company in
whichExecutiveAhad ownership interest.
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B
CORPORATECOMPLIANCEPROGRAM
Inordertoaddressany deficiencies in its internal controls, compliancecode,policies,
andproceduresregarding compliancewiththe Foreign CorruptPracticesAct ("FCPA"),U.S.C. 78dd-l, andotherapplicable laws, Archer DanielsMidlandCompany (the "Company")agreesto continue to conduct, inamannerconsistentwithall ofits
obligationsunderthis Agreement,appropriatereviewsofits existing internal controls, policies,
andprocedures.
Wherenecessaryand appropriate, the Companyagreestoadoptnew ortomodify
existing internal controls, compliancecode,policies, andproceduresinordertoensurethat it
maintains: (a) asystemofinternal accounting controlsdesignedtoensurethat the Company
makesandkeepsfair andaccuratebooks,records,andaccounts;and(b) a rigorous anti-
corruption compliancecode,policies, andproceduresdesignedtodetectanddeterviolationsof
the FCPA andotherapplicable anti-corruption laws. Ataminimum,this should include, but not
belimitedto, thefollowingelementsto theextentthey are notalreadypartoftheCompany's
existing internal controls, compliancecode,policies, andprocedures:
High-levelCommitment
The Companywillensurethat its directors andseniormanagementprovide
strong,explicit,and visiblesupportand commitmentto itscorporatepolicyagainstviolationsof
the anti-corruption laws and its compliancecode.
PoliciesandProcedures
2. The Companywilldevelopand promulgate a clearly articulated andvisible
corporatepolicyagainstviolationsofthe FCPA andotherapplicable foreign lawcounterparts
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(collectively,the "anti-corruptionlaws,"),which policyshall be memorializedinawritten
compliancecode.
3. The Companywilldevelopand promulgate compliance policies andprocedures
designedto reducetheprospectofviolationsofthe anti-corruption laws and theCompany's
compliancecode,and the Companywilltakeappropriatemeasurestoencourageandsupportthe
observanceofethicsand compliance policies andproceduresagainstviolationofthe anti-
corruptionlawsbypersonnelatall levelsofthe Company. Theseanti-corruption policies and
proceduresshall apply toalldirectors, officers, andemployeesand,wherenecessaryand
appropriate,outside partiesacting on behalfofthe Company inaforeignjurisdiction,including
but notlimitedto,agentsand intermediaries,consultants, representatives,distributors, teaming
partners, contractorsand suppliers, andjointventurepartners(collectively,"agentsandbusinesspartners"). The Company shallnotifyallemployeesthat compliancewiththe
policies andproceduresis the dutyofindividualsatall levelsofthe company. Suchpolicies and
proceduresshalladdress:
a. gifts;
b. hospitality,entertainment,andexpenses;
c. customertravel;
d. politicalcontributions;
e. charitabledonationsandsponsorships;
f. facilitationpayments;and
solicitationand extortion.
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6. The Company shall review its anti-corruption compliance policies and
proceduresnolessthan annually andupdatethem asappropriatetoensuretheir continued
effectiveness,taking intoaccountrelevantdevelopmentsinthefieldandevolvinginternational
and industrystandards.
ProperOversightand Independence
7. The Company willassignresponsibilitytoone ormoresenior corporate
executivesofthe Company for the implementation and oversight oftheCompany'santi-
corruption compliancecode,policies, andprocedures.Suchcorporate shallhavetheauthorityto reportdirectlytoindependentmonitoringbodies,including internal audit, the
Company'sBoardofDirectors, or anyappropriatecommittee ofthe BoardofDirectors, and
shallhaveanadequatelevelofautonomyfrommanagementaswellas sufficientresourcesand
authoritytomaintainsuchautonomy.
TrainingandGuidance
8. The Companywillimplementmechanismsdesignedtoensurethat its anti-
corruption compliancecode,policies, andproceduresare effectively communicated to all
directors, officers,employees,and,wherenecessaryand appropriate,agentsandbusiness
partners.Thesemechanismsshall include: (a) periodic training foralldirectors and officers, all
employees inpositionsofleadershipor trust, positions that requiresuchtraining (e.g., internal
audit,sales,legal, compliance,finance),or positions that otiierwiseposea corruptionriskto the
Company, and,wherenecessaryand appropriate,agentsandbusinesspartners;and (b)
corresponding certifications byallsuchdirectors, officers,employees,agents,andbusiness
partners,certifying compliancewiththetrainingrequirements.
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9. The Companywillmaintain, orwherenecessaryestablish,an effectivesystem
forprovidingguidanceand advice to directors, officers,employees,and,wherenecessaryand
appropriate,agentsandbusinesspartners,on complyingwiththeCompany'santi-corruption
compliancecode,policies, andprocedures,includingwhen theyneedadvice on anurgentbasis
orinanyforeign jurisdictioninwhichthe Companyoperates.
Internal Reportingand Investigation
The Companywillmaintain, orwherenecessaryestablish,an effectivesystem
forinternal and,where possible,confidential reportingby,and protection of, directors, officers,
employees,and,whereappropriate,agentsandbusinesspartnersconcerning violationsofthe
anti-corruption laws or theCompany'santi-corruption compliancecode,policies, and
procedures.
The Companywillmaintain, orwherenecessaryestablish,an effective and
reliableprocesswithsufficientresourcesfor responding to,investigating, and documenting
allegations ofviolationsofthe anti-corruption laws or theCompany'santi-corruption
compliancecode,policies, andprocedures.
EnforcementandDiscipline
12. The Companywillimplementmechanismsdesignedtoeffectivelyenforceits
compliancecode,policies, andprocedures,includingappropriately incentivizingcompliance and
discipliningviolations.
The Companywillinstituteappropriatedisciplinaryprocedurestoaddress,
among otherthings, violationsofthe anti-corruption laws and theCompany'santi-corruption
compliancecode,policies, andproceduresby theCompany'sdirectors, officers, andemployees.
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Suchproceduresshould be applied consistently andfairly,regardlessofthe position heldby,or
perceived importance of, the director, officer, or employee. The Company shall implement
procedurestoensurethatwheremisconduct is discovered,reasonablestepsare taken toremedy
the harm resultingfromsuchmisconduct, andtoensurethatappropriatestepsare taken to
preventfurther similar misconduct,includingassessingthe internal controls, compliancecode,
policies, andproceduresand making modificationsnecessarytoensurethe overall anti-
corruption compliance program is effective.
Third-PartyRelationships
14. The Companywillinstituteappropriaterisk-baseddue diligence and compliance
requirementspertaining to the retention and oversightof allagentsandbusinesspartners,
including:
a. properlydocumenteddue diligence pertaining to thehiringand
appropriateand regular oversightofagentsandbusinesspartners;
b. informingagentsandbusinesspartnersofthe commitment toabiding by anti-corruption laws, andoftheCompany'santi-corruption compliancecode,
policies, andprocedures;and
c. seekinga reciprocal commitmentfromagentsandbusinesspartners.
Wherenecessaryand appropriate, the Companywillincludestandardprovisions
inagreements,contracts,andrenewalsthereofwith allagentsandbusinesspartnersthatare
reasonablycalculated topreventviolationsofthe anti-corruption laws,whichmay,depending
upon thecircumstances,include: (a) anti-corruptionrepresentationsandundertakingsrelating to
compliancewiththe anti-corruption laws;(b)rights to conductauditsofthebooksandrecordsof
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theagentorbusinesspartnertoensurecompliancewiththe foregoing; and(c)rights to terminate
anagentorbusinesspartneras a resulto fanybreachofthe anti-corruption theCompany'scompliancecode,policies, orprocedures,or therepresentationsand undertakings related tosuch
matters.
MergersandAcquisitions
The Companywilldevelop and implementpoliciesandproceduresformergers
and acquisitions requiring the Company conduct appropriate risk-based due diligence onpotential newbusinessentities,includingappropriate FCPA and anti-corruption due diligence by
legal, accounting, and compliance personnel.
The Companywillensurethat the compliancecode,policies, andproceduresregarding tbe anti-corruption laws apply asquicklyas is practicabletonewly
acquiredbusinessesor entities mergedwiththe Company andwillpromptly:
a. trainthe directors, officers,employees,agents,andbusinesspartners
consistentwithParagraph8aboveon the anti-corruption laws and theCompany'scompliance
code,policies, andproceduresregarding anti-corruption laws; and
b. where warranted, conduct an auditof allnewlyacquiredor mergedbusinessesasquicklyas practicable.
MonitoringandTesting
The Companywillconduct periodic reviews and testingofits anti-corruption
compliancecode,policies, andproceduresdesignedtoevaluateand improve theireffectiveness
inpreventing and detecting violationsofanti-corruption laws and theCompany'santi-corruption
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code,policies, andprocedures,taking intoaccountrelevantdevelopmentsinthefieldand
evolving international and industrystandards.
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ATTACHMENTC
REPORTING REQUIREMENTS
ArcherDanielsMidlandCompany (the "Company")agreesthatitwillreport to the
Departmentperiodically,at nolessthantwelve-monthintervalsduringathree-yearterm,
regarding remediation and implementationofthe compliance program andinternalcontrols,
policies,andproceduresdescribed inAttachmentB. Should the Company discover credible
evidence,not already reported to the Department, thatquestionableor corruptpaymentsor
questionableor corrupttransfersofproperty orinterestsmayhave beenoffered, promised, paid,
or authorized by any Company entity orperson,or any entity orpersonworkingdirectlyfor the
Company(includingits affiliates and any agent), or that relatedfalse booksandrecordshave
beenmaintained, the Company shallpromptlyreportsuchconduct to the Department. During
thisthree-yearperiod,the Companyshall:(1)conduct aninitialreviewand submit aninitial
and(2)conduct andprepareatleasttwo (2)follow-upreviews and reports, as described
below:
a. Byno later than one(1)yearfromthedatethis Agreement isexecuted,the
Company shall submit to the Department awrittenreport settingfortha complete descriptionof
itsremediation efforts todate,itsproposals reasonably designedtoimprovetheCompany's
internalcontrols,policies,andproceduresfor ensuring compliancewiththe FCPA and other
applicable anti-corruption laws, and theproposedscopeofthesubsequentreviews. Thereport
shall be transmitted to DeputyChief-
FCPAUnit,Fraud Section,CriminalDivision,U.S.
Department ofJustice,1400NewYorkAvenue,NW,BondBuilding,Eleventh Floor,
Washington,DC20530. The Company may extend thetime periodforissuanceofthe report
withprior writtenapprovalofthe Department.
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b. The Companyshallundertakeatleasttwo(2) follow-upreviews
incorporatingthe Department'sviewsonthe Company'spriorreviews and reports, to further
monitorandassesswhether the Company'spoliciesandproceduresarereasonablydesigned to
detectandpreventviolationsofthe FCPA and other applicableanti-corruptionlaws.
c. Thefirstfollow-upreviewand report shall be completedbyno later than
one(1)yearafter theinitialreview. Thesecondfollow-upreview and report shall be completed
byno laterthanone(1)yearafterthecompletionofthe precedingfollow-upreview.
d. The reportswill likelyinclude proprietary,financial,confidential,and
competitivebusinessinformation. Moreover,publicdisclosureofthe reportscoulddiscourage
cooperation, impede pending orpotentialgovernment investigations andthusundermine the
objectivesofthereportingrequirement. Forthesereasons,among others, the reports and the
contentsthereofare intendedtoremain and shall remainnon-public,except as otherwiseagreed
to by thepartiesinwriting,or except to the extent that the Departmentdeterminesinitssole
discretion that disclosurewouldbeinfurtherance ofthe Department'sdischargeofitsduties and
responsibilities or is otherwise requiredbylaw.
e. The Companymayextend thetime periodfor submissionofanyofthe
follow-upreportswithpriorwrittenapprovalofthe Department.