Regulators from the Security and Exchanges Commission (SEC) are investigating the U.S.-based company for breaking the Foreign Corrupt Practices Act (FCPA), a law prohibiting companies registered in the United States from paying bribes to officials in foreign governments.
Russia, with nine percent of the world’s arable land, is an attractive market to the world’s largest farming equipment manufacturer, one reason why chief executive Samuel Allen Deere announced plans to double sales to $50 billion by 2018.
A spokesperson from John Deere confirmed to the WSJ that the SEC requested information about the company’s activities in Russia and neighboring countries, as well as relationships with third parties, on July 25.
“The SEC has informed Deere that this is a non-public fact-finding inquiry to determine whether there have been any violations of the federal securities laws, and that the inquiry and document request do not mean that the SEC has concluded that Deere has broken the law,” said the representative in a statement.
According to Forbes magazine, which ranks America’s largest corporations, the company is in the top 100 and boasts over 50,000 employees across the globe.
Deere started selling its wares to Russia 100 years ago.
Russia’s current business climate is not considered transparent. Transparency International rated the country 154 out of 178 countries rated in its 2010 International Corruption Perceptions Index. Maplecroft, a British political risk consulting firm ranked Russia 186 out of 196 countries for political risk to business.
In April 2010, the U.S. Justice Department found that Mercedez-Benz Russia colluded with officials from Moscow’s government, municipalities, and members of the Interior Ministry and fined them $27.26 million.
Siemens AG recently paid $1.6 billion for violating the FCPA and Hewlett-Packard is currently under investigation.
