GOL Linhas Aéreas Inteligentes/Gol Airline, Brazilian second-largest airline, has been alleged by the United States SEC(Security Exchange Commission) for violating the FCPA(Foreign Corrupt Practices Act). Based in Sao Paulo, Brazil, the GOL airline has agreed to settle the case with SEC for $70 million.
Per orders from the Security Exchange Commission, United States, it has found that GOL Airlines was involved in bribing a Brazilian official for the reduction in payroll and aviation fuel taxes. Such things escalated against the improper inner accounting controls while bribing was included in a regular affair.
FCPA Unit Head Charles Cains stated that the misappropriation of funds at GOL Airlines exposed in-effectiveness of its accounting controls.
He further explained that it is essential at all transactions in the organization that internal accounting control works effectively. In contradiction, here at GOL Airlines, the transactions held at the higher levels were immune to inside accounting controls.
GOL Airlines has agreed to discontinue illegal activities after finding that it has involved in the misappropriation of funds violating FCPA norms. Along with this, GOL Airlines has to enter into an extended prosecution agreement with the Justice Department, United States, and agree on a payment of $87 million for settling criminal charges.
Due to GOL Airlines’ inability payment of the fine in one go, the Securities and Exchange Commission and Department of Justice, United States, have relinquished quite a fine.
But the Securities and Exchange Commission and the Justice Department sought $24.5 million and $17 million, respectively. In addition, GOL Airlines will be paying $3.4 million to Brazilian officials.
For accepting the offer, the Securities and Exchange Commission, United States, has examined GOL Airline’s cooperative and curative methods. It includes indoctrinating GOL Airline’s director, who actively outlined the scheme while focussing on enhancing accounting controls and procedures. Along with laying necessary efforts on building anticorruption policies.
The Security and Exchange Commission’s investigation carried out by its FCPA unit consists of a team of Thierry Olivier Desmet, Ernesto Palacios, and Shahriar Masud.
Also, the Securities and Exchange Commission acknowledges the cooperation by:
- The Fraud Section of the Criminal division of the Department of Justice,
- The Ministério Publico Federal
- Brazil Controladoria-General da Uniᾶo
- The FBI
- Advocacia-Geral da Uniᾶo.
The above departments have together worked to bring to the forefront the misappropriations at the GOL airlines. And Securities and Exchange Commission, the United States, acknowledges it.