Since at least 2006, the U.S. Department of Justice (DOJ) has been conducting a wide-ranging investigation of the U.S. subsidiary of Panalpina Welttransport Holding AG under the Foreign Corrupt Practices Act (FCPA). Panalpina, a leading provider of forwarding and logistics services, including intercontinental air freight and ocean freight, announced in September 2007 that U.S. authorities instructed its subsidiary to produce documents and other information related to its business, its services to certain customers and its services in Nigeria, Kazakhstan and Saudi Arabia. Additionally, the company stated that it had begun investigating whether it made “improper payments” in those countries. These disclosures appear to have resulted in spin-off investigations of several U.S. companies who have utilized Panalpina. Further, many U.S. companies have received letters from DOJ requesting information about their relationship and dealings with Panalpina.
All current indications are that the Panalpina investigation will be ongoing for some time and could widen in scope to include any number of U.S. corporations with international operations that have used Panalpina’s services. While the investigation at this time appears to involve only the oil and oil-services industries, any company with operations that has engaged Panalpina (particularly for shipments to or from Nigeria, Kazakhstan or Saudi Arabia) in the last several years would be well advised to initiate a review to determine whether and in what circumstances any improper payments may have occurred. Any company that has or anticipates receiving a Panalpina letter should also proceed with care and deliberation in responding to such a request.
McGuireWoods has extensive experience in handling matters involving the FCPA and in dealing with the DOJ in situations such as that presented by the Panalpina investigation. If you wish to discuss the Panalpina matter in greater detail, to receive assistance in a Panalpina-related review, or to respond to a Panalpina letter, please contact the authors.