On February 22, 2019, Mobile TeleSystems PJSC (“MTS”), the largest mobile telecommunications company in Russia and an issuer of publicly traded securities in the United States, and its wholly owned Uzbek subsidiary, Kolorit Dizayn Ink LLC (“Kolorit”), entered a deferred prosecution agreement and guilty plea, respectively, to resolve charges based on their roles in a scheme to pay bribes in Uzbekistan.  In total, the entities agreed to pay a penalty of $850 million.

The entities acknowledged that, between 2004 and 2012, they paid approximately $420 million in bribes to a former Uzbek official, Gulnara Karimova, who is the daughter of the country’s former president and who had influence over the governmental body that regulated the industry. Kolorit pleaded guilty to one count of conspiring to violate the FCPA’s anti-bribery and books and records provisions, while MTS’s DPA charged it with the same conspiracy, as well as a substantive count.  In its press release, DOJ explained that it considered the following factors in reaching the resolutions: (1) the companies did not voluntarily disclose; (2) the companies’ cooperation and remediation was lacking and not proactive; (3) the nature and seriousness of the offense; and (4) mitigating factors, including the Uzbek government’s ultimate expropriation of the entities’ assets, which limited the companies’ pecuniary gain.  Pursuant to DOJ’s “anti-piling on” policy, it credited the $100 million civil penalty MTS paid as part of its resolution with the SEC.

United States v. Kolorit Dizayn Ink LLC and Mobile TeleSystems PJSC, 19-cr-167 (S.D.N.Y.)
DOJ Press Release