Avon fined $135 million for China bribes

The maker of a popular women’s beauty product line will pay $135 million in fines for bribing Chinese government officials. 

Avon Products (China) Co., a wholly owned subsidiary of the New York-based cosmetic company, Avon Products Inc., pleaded guilty Thursday to concealing the more than $8 million in gifts, cash and non-business meals, travel and entertainment it gave Chinese government officials to obtain a direct selling license.    

The Securities and Exchange Commission (SEC), the Department of Justice and the U.S. Attorney’s Office for the Southern District of New York charged the company for violating the Foreign Corrupt Practices Act.

{mosads}FBI Assistant Director in Charge Andrew McCabe, of the Washington Field Office, said other companies attempting to advance their business illegally should be on notice.  

“When corporations knowingly engage in bribery in order to obtain and retain contracts, it disrupts the level playing field to which all businesses are entitled,” he said in a statement. 

“The FBI, with our law enforcement partners, is continuing to push this unacceptable practice out of the business playbook by investigating companies who ignore the law,” he added. 

From 2004 to 2008, Avon China wooed government officials with paid trips to the U.S. and Europe, and expensive gifts like Luis Vuitton and Gucci bags, Tiffany pens and corporate box tickets to the China Open tennis tournament. The SEC said Avon falsely recorded gifts as employee expenses or reimbursements of third-party vendors. 

“Companies that cook their books to hide improper payments will face criminal penalties, as Avon China’s guilty plea demonstrates,” Assistant Attorney General Leslie Caldwell said in a statement Thursday. 

“Public companies that discover bribes paid to foreign officials, fail to stop them, and cover them up do so at their own peril.”