The toolmaker Stanley Black & Decker reported last week that the company has identified international transactions that may have violated US anti-bribery laws. The information was displayed in the company’s annual report, which referenced ‘questionable transactions’ among its international operations.
Stanley Black & Decker found “certain transactions relating to its international operations that may raise compliance questions under the US Foreign Corrupt Practices Act”. Which, in short, mean that these transactions could have been set out as bribes to get business advantage. However, the company did not reveal where the possible violations may have taken place.
In the filings, the company said that it was cooperating with the Justice Department and the SEC in their investigations, and shared information with them voluntarily.
Stanley Black & Decker thinks that these matters will not have any material effect on its financial status. Yet, a “loss related to these matters may be incurred”.
Financial reporting
The company’s latest filing also brought to light comments to it from the SEC regarding accounting for equity units that were issued in May 2017 and November 2019.
It was later found that these errors were “made in its original accounting conclusions resulting from material weaknesses in its internal control over financial reporting for such instruments”. However, these material weaknesses were ‘fixed’ during the first quarter of fiscal 2022.
The company also says that, with the assistance of professional advisors, it is reviewing and further enhancing relevant policies, procedures, and controls within its operations.
The Foreign Corrupt Practices Act (FCPA)
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. (“FCPA”), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.
The anti-bribery provisions of the FCPA prohibit the wilful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
All companies whose securities are listed in the United States are required to meet its accounting provisions.
Source: justice.gov