Schnitzer Steel Industries has agreed to pay two fines for a total of $15.2 million while not admitting or denying the findings of a Security and Exchange charge that it paid kickbacks to various managers of government-controlled steel mills in China from 1999 through 2004. The fines included a $7.5 million criminal fine, and will disgorge a $7.7 million civil penalty.
According to an SEC filing, Schnitzer made payments on its own behalf and as a broker for Japanese steel companies. During this period the company also paid bribes to managers of privately owned steel mills in China and South Korea; and improperly concealed payments in its records.
The filings noted that the company paid more than $205,000 in improper payments to managers of Chinese government-owned steel mills in 30 sales transactions.
In addition to this activity, Schnitzer also reportedly paid bribes to managers of privately owned steel companies in China and South Korea. Between 1999-2004 the company made more than $420,000 in improper payments to privately owned Chinese steel mills; while the company also paid managers of privately owned South Korean mills around $1,273,000 between 1999-2004.
In May 2004, Schnitzer’s compliance department uncovered the improper payments and began investigating the potential violations to the Foreign Corrupt Practices Act of 1977. The SEC report noted that while a senior executive at Schnitzer prohibited any further payments, the executive did authorize the company employees to pay at least two additional bribes that the company previously had promised private customers.