In re Sanofi

 
 
 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 84017 / September 4, 2018 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3964 / September 4, 2018 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-18708 
 
In the Matter of 
 
Sanofi, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-DESIST 
PROCEEDINGS, PURSUANT TO SECTION 
21C OF THE SECURITIES EXCHANGE ACT 
OF 1934, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND A 
CEASE-AND-DESIST ORDER 
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Exchange Act”), against Sanofi (“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings  
herein, except as to the Commission’s jurisdiction over it  and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings, Pursuant to 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth 
below. 
 
  

 
 
2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that  
 
Summary 
  
A. These proceedings arise out of Sanofi’s violations of the internal accounting controls 
and recordkeeping provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”) [15 
U.S.C. § 78m]. 
 
B. As described below, from at least 2011 to 2015, employees and agents of Sanofi’s 
subsidiaries in Kazakhstan, Levant (which includes the countries Jordan, Lebanon, Syria, and the 
region of Palestine), and the Gulf (which includes the countries Bahrain, Kuwait, Qatar, Yemen, 
Oman, and the United Arab Emirates) acted to provide things of value to foreign officials, including 
healthcare professionals (“HCPs”), in order to improperly influence them and increase sales of 
Sanofi products. 
 
C. The funds used for the illicit payments were generated through fake expenses for 
purportedly legitimate travel and entertainment expense, clinical trial and consulting fees, product 
samples, round table meeting expenses, distributor discounts, and credit notes to distributors which 
were improperly recorded as legitimate expenses in Sanofi’s books and records.  Throughout this 
period, Sanofi failed to devise and maintain a sufficient system of internal accounting controls and 
lacked an effective anti-corruption compliance program with regard to Kazakhstan, Levant, and the 
Gulf. 
 
D. Deficiencies in the internal accounting controls and compliance program of Sanofi 
also led to similar improper conduct in connection with sales in other countries in which Sanofi 
operates. 
  
Respondent 
 
E. Sanofi is a corporation organized in France.  Its headquarters are located in Paris, 
France.  Sanofi issued and maintains a class of publicly traded securities registered pursuant to 
Section 12(b) of the Securities Exchange Act of 1934, which have traded on the New York Stock 
Exchange since 2002. 
 
F. Sanofi is a global pharmaceutical company and operates in over 100 countries.  
Sanofi employs approximately 107,000 people worldwide, at least 28 percent of whom are 
designated as sales force personnel.  
 
 
                                                 
1
   The findings herein are made pursuant to Respondent's Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  
 

 
 
3 
Other Relevant Entities 
 
G. Sanofi-Aventis Kazakhstan LLP (“Sanofi KZ”) is a company organized in 
Kazakhstan.  Sanofi KZ engages distributors in Kazakhstan to facilitate the sale and distribution of 
pharmaceutical products and maintains its own sales and marketing staff to promote Sanofi 
pharmaceutical products.   
 
H. Sanofi-Aventis Liban S.A.L. (“Sanofi Levant”) is a company organized in 
Lebanon.  Sanofi Levant engages distributors in Levant to facilitate the sale and distribution of 
pharmaceutical products and maintains its own sales and marketing staff to promote Sanofi 
pharmaceutical products.  
 
I. Sanofi Aventis Gulf FZE (“Sanofi Gulf”) is a company organized in the United 
Arab Emirates.  Sanofi Gulf is responsible for pharmaceutical operations in Bahrain, Kuwait, 
Qatar, Yemen, Oman, and the United Arab Emirates.  Sanofi Gulf engages 31 distributors across 
the relevant countries to facilitate the sale of Sanofi pharmaceutical products and maintains its own 
sales and marketing staff to promote Sanofi pharmaceutical products. 
 
Facts 
 
Kazakhstan 
 
J. Between 2007 and 2011, senior managers of Sanofi KZ engaged in a scheme to 
bribe foreign officials to corruptly influence the award of tenders at public institutions.  The funds 
paid to foreign officials were derived from discounts and credit notes
2
 extended to several 
distributors who colluded with senior managers to kick back funds to Sanofi employees in 
Kazakhstan which were then used to pay Kazakh officials.  
 
K. The scheme took several stages to execute.  First, senior managers of Sanofi KZ 
identified to a distributor a public tender for pharmaceuticals that could be filled by Sanofi 
products. Second, the distributor submitted a bid for the public tender and, when awarded, notified 
Sanofi of its need to purchase products to fulfill the tender.  Third, the sale price between Sanofi 
and the distributor included a pre-determined discount or credit note from the sale price between 
the distributor and the public institution.  Fourth, from the amount of the discount or credit note, 
Sanofi and the distributor were able to designate a portion as the funds which were used to bribe 
Kazakh officials.  Fifth, once the funds which were used to bribe Kazakh officials were earmarked, 
the distributor kicked back those funds to Sanofi employees who then delivered the illicit proceeds 
to Kazakh officials.  The scheme typically involved providing a 20-30 percent discount to the 
distributors, a portion of which was then used as the funds from which bribes were paid to Kazakh 
officials.  The funds kicked back to Sanofi employees were tracked in internal spreadsheets and 
referred to as “marzipans.”   
 
                                                 
2
  Credit notes are monies owed to a vendor by Sanofi.  The vendor may apply the credit note(s) 
against monies the vendor owes to Sanofi and, in some cases, the vendor was able to exchange 
the credit note(s) for cash from Sanofi. 

 
 
4 
L. At the time, Sanofi had no standardized commercial policy for distributor discounts 
and did not review the discounts provided by local management. During the relevant period, tender 
sales increased by over 200 percent and included top selling products of Sanofi.  The distributors 
involved in the conduct were some of the largest distributors by sales in Kazakhstan. As a result of 
the improper conduct in Kazakhstan, Sanofi derived profits equivalent to approximately USD 
11,580,099. 
 
Levant 
 
M. From 2011 to 2013, employees and agents of Sanofi Levant participated in a series 
of schemes to pay foreign officials to boost sales of Sanofi products through increased 
prescriptions.  The schemes included sponsorships, gifts, donations, product samples, consulting 
agreements, peer-to-peer meetings, clinical studies, and grants.  The schemes were executed across 
the various business lines in Levant and included the top selling products of Sanofi in the region.  
Some of the schemes involved the participation by senior managers of Sanofi Levant.  The 
instances of improper conduct were not isolated and spanned across government agencies as well 
as private institutions.    
 
N. An example of the corrupt conduct is a 2012 request by an HCP of a large public 
hospital in Jordan for 24 vials of Taxotere as product samples.  At the time, corporate policy for 
product samples required a medical justification.  Taxotere is a product used to treat cancer and is 
one of the most expensive products sold in Levant.  The oncology  manager requested a 
justification from the sales representative and was told 
 
[HCP] is a KOL [key opinion leader] Doctor, our Consumption in [hospital] 
is 124 vials, But we Don’t Give Dr.s in Institution Pt.Support [in public 
hospital product samples for patients].  But He Asked as a Favor. 
 
The oncology manager then approved the request.  Medical Affairs was not involved in reviewing 
or approving the request and no justification was provided regarding the medical use or 
appropriateness.  The quantity provided as samples was nearly 20 percent of the hospital’s 
purchases.  The HCP requesting the samples was a tender committee member at the hospital. 
 
O. The same HCP requesting samples of Taxotere in 2012 was also provided with 
consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation 
of other support to demonstrate the services had been provided.    Sanofi paid to the HCP the 
equivalent in local currency of USD 28,900 in consulting fees and, USD 5500 in speaking fees.  
Sanofi also paid to the HCP USD 125,997 in clinical trial fees.  The consulting fees were 
purportedly related to hosting events and training for HCPs in Iraq.  No supporting documentation 
was found for any of the purported consultancy services.   While the clinical trial fees were 
approved by Medical Affairs, the HCP has never provided reports of findings or observations.  The 
HCP, who provided the ostensible speaking, consulting, and clinical trial services to Sanofi, 
requested that the consulting and clinical trial fees be paid by check to an unrelated individual.  
Sanofi accommodated the request to pay the unrelated individual without explanation or 
justification. 
 

 
 
5 
P. The practice of engaging as consultants influential HCPs who provided vague 
services was also performed with HCPs in the private sector.  As an example, Sanofi Levant 
retained as a consultant the services of a prominent pharmacist in Lebanon for several years 
through 2013.  The pharmacist received annual payments denominated in United States dollars of 
no less than USD 42,000 and in a five-year period received a total of USD 237,300.   The 
consulting services required included preparing training programs and conducting speaking events 
however, evidence of the receipt of those services is sparse or nonexistent.  Sanofi failed to require 
sufficient documentation of the performance of services before making payments to its consultants.  
 
Q. As a result of the improper conduct in Levant, Sanofi derived profits equivalent to 
approximately USD 4,200,000. 
 
The Gulf 
 
R. In the countries comprising Sanofi Gulf, sales managers and medical 
representatives in the Primary Care business unit engaged in a long-standing scheme to submit 
false travel and entertainment reimbursement claims, pool the illicit proceeds of the false schemes, 
and distribute the illicit proceeds to HCPs in the private sector in order to increase prescriptions of 
Sanofi products. 
  
S. The false travel and entertainment claims were made in connection with fake round 
table meetings with HCPs and facilitated by fake receipts issued by collusive vendors known to 
facilitate such activity.  The scheme was quite simple and involved local sales managers.  Medical 
representatives were instructed by their sales managers to submit a doctored receipt for a round 
table meeting that never occurred.  Medical representatives then submitted a doctored receipt for 
reimbursement as a legitimate travel and entertainment expense.  The sales managers approved the 
travel and entertainment expense submission and the medical representatives were reimbursed.  
Medical representatives gave the sales managers the illicit proceeds from the fraudulent 
reimbursement and then pooled the illicit proceeds together into a slush fund to pay HCPs.  
Managers tracked the incoming pool of illicit proceeds from medical representatives and the 
disposition of illicit proceeds to HCPs who were paid to increase prescriptions of Sanofi products. 
 
T. The Primary Care business unit was responsible for several high sales volume 
products in the Gulf.  The scheme employed by sales managers and medical representatives was 
executed from at least 2012 to 2015.  One medical representative estimated that 70 percent of the 
travel and entertainment expense submissions of the Primary Care business unit were related to the 
scheme.  From 2012 to 2015, Sanofi Gulf spent the equivalent of approximately USD 4 million for 
round table meetings with HCPs, although only a portion was used in the scheme. 
 
U. In a 2015 internal audit of commercial operations in the Gulf, one of the findings 
concerned the lack of monitoring of outsourced distributor promotional activities.  An example of a 
specific risk identified in the report included:  “Interactions with HCPs organized by the 
outsourced sales force are not compliant with Sanofi guidelines.  Selection of HCPs, attendance list 
and detailed hospitality costs were neither documented nor reviewed by Sanofi.”  Similar control 
weaknesses and failures in documentation of round table meetings conducted by distributors on 
behalf of Sanofi were found.  Another finding identified the many internal control lapses, including 

 
 
6 
the use of cash to make payment to HCPs, surrounding round table meetings conducted by Sanofi 
itself and lack of documentation and approvals related to attendance of round table meetings.  A 
full audit of the commercial operations in the Gulf had not been conducted since 2007, eight years 
earlier.   
 
V. As a result of the improper conduct in the Gulf, Sanofi derived profits equivalent to 
approximately USD 1,751,567.   
 
W. As a result of the conduct described above, Sanofi violated Sections 13(b)(2)(A) 
and 13(b)(2)(B) of the Exchange Act.  Sanofi violated Section 13(b)(2)(A) of the Exchange Act by 
falsely recording improper payments made by employees and agents as legitimate selling and 
marketing expenses, whose results were then consolidated and reported by Sanofi on its 
consolidated financial statements.  Sanofi also violated Section 13(b)(2)(B) by failing to devise and 
maintain sufficient accounting controls to detect and prevent the making of improper payments to 
foreign officials. 
 
Sanofi’s Remedial Efforts 
X. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Respondent and cooperation afforded the Commission staff. 
 1.  During the course of the investigation, Respondent provided regular briefings 
regarding the facts developed in its internal investigation in Kazakhstan, Levant, and the Gulf, 
and with respect to other countries.  Respondent timely conveyed the facts it learned in the 
course of its investigation, including facts that the Commission would not have been able to 
readily and independently discover, produced and highlighted particularly relevant documents, 
promptly responded to additional requests by the Commission staff, and provided translations of 
documents as needed. 
 2.  Respondent also provided information regarding its remedial efforts, 
enhancements to its compliance program and implementation of initiatives. Prior to the 
Commission’s investigation, Respondent had begun independently enhancing its compliance 
program by, among other things, developing a centralized compliance program, revamping its 
internal controls and procedures over HCP expenditures, increasing the number of its compliance 
officers globally, enhancing the operation of local compliance committees, and placing 
compliance personnel in high-risk local markets.  Additionally, it enhanced its (1) policies 
governing interactions with HCPs and government officials, gifts, travel, meetings, congresses, 
contributions, and ISTs; (2) anti-corruption training, audits, and due diligence procedures for 
third-party agents; and (3) monitoring for certain Sanofi-sponsored events for HCPs. Respondent 
also reports that it has terminated 121 employees, including senior local business managers, 
accepted resignations from another 14 employees, and disciplined 49 employees.   
  

 
 
7 
Undertakings 
Y. Respondent undertakes to cooperate fully with the Commission in any and all 
investigations, litigation, or other proceedings relating to or arising from the matters described in 
this Order.  In connection with such cooperation, Respondent shall: 
  1.  produce, without service of a notice or subpoena, any and all nonprivileged 
documents and other information requested by the Commission staff subject to any restrictions 
under the law of any foreign jurisdiction; 
 
  2.  use its best efforts to cause its current or former officers, 
employees, agents, and directors to be interviewed by Commission staff at such times and 
places as the staff reasonably may direct; and 
 
  3.  use its best efforts to cause its current or former officers, 
employees, agents, and directors to appear and testify without service of a notice or 
subpoena in such investigations, depositions, hearings, or trials as may be 
requested by the Commission staff. 
 
Z. Respondent undertakes to report on the status of its remediation and 
implementation of compliance for a period of at least two years.  During this two-year period, 
Respondent shall conduct and prepare self reviews, as well as related follow-up, and submit written 
reports of the results, as set forth in the Compliance Program Review Plan (“Plan”) submitted with 
its Offer of Settlement and report to the Commission staff as outlined below: 
 
1. Respondent shall submit to the Commission staff a written report within six (6) 
months of the entry of this Order setting forth a complete description of its 
Foreign Corrupt Practices Act (“FCPA”) and anti-corruption related 
remediation efforts to date, its proposals reasonably designed to improve the 
policies and procedures of Respondent for ensuring compliance with the FCPA 
and other applicable anticorruption laws, and the parameters of the subsequent 
reviews (the “Initial Self Report”).  The Initial Self Report shall be transmitted 
to Charles Cain, FCPA Unit Chief, Division of Enforcement, United States 
Securities and Exchange Commission, 100 F St NE, Washington, DC 20549.  
Respondent may extend the time period for issuance of the Initial Self Report 
with prior written approval of the Commission staff.   
 
2. Respondent shall undertake two (2) follow up reviews (the “Follow up Self 
Reports”), incorporating any comments provided by the Commission staff on 
the previous report(s), and following up on matters identified in earlier reports, 
to further monitor and assess whether the policies and procedures of 
Respondent are reasonably designed to detect and prevent violations of the 
FCPA and other applicable anti-corruption laws. 
 
3. The first Follow up Self Report shall be completed by no later than seven 
months after the Initial Self Report.  The second Follow up Self Report shall be 

 
 
8 
completed by no later than seven months after the first Follow up Self Report.  
Respondent may extend the time period for issuance of the Follow up Self 
Reports with prior written approval of the Commission staff. 
 
AA. Should Respondent during the period of the undertakings discover credible 
evidence, not already reported to the Commission staff, that questionable or corrupt payments or 
questionable or corrupt transfers of property or interests may have been offered, promised, paid, or 
authorized by Respondent entity or person, or any entity or person while working directly for 
Respondent, or that related false books and records have been maintained, Respondent shall 
undertake to promptly report such conduct to the Commission staff. 
 
BB. The periodic reviews and reports submitted by Respondent will likely include 
proprietary, financial, confidential, and competitive business information.  Public disclosure of the 
reports could discourage cooperation, impede pending or potential government investigations and 
thus undermine the objectives of the reporting requirement. For these reasons, among others, the 
reports and the contents thereof are intended to remain and shall remain non-public, except (1) 
pursuant to court order, (2) as agreed by the parties in writing, (3) to the extent that the 
Commission staff determines in its sole discretion that disclosure would be in furtherance of the 
Commission’s discharge of its duties and responsibilities, or (4) is otherwise required by law. 
 
CC. During this two-year period of review, Respondent shall provide its external 
auditors with its annual internal audit plan and reports of the results of internal audit procedures 
and its assessment of its FCPA compliance policies and procedures.   
 
DD. During this two-year period of review, Respondent shall provide the Commission 
staff with any written reports or recommendations provided by Respondent’s external auditors 
response to Respondent’s annual internal audit plan, reports of the results of internal audit 
procedures, and its assessment of its FCPA compliance policies and procedures. 
 
EE. Respondent shall certify, in writing, compliance with the undertaking(s) set forth 
above.  The certification shall identify the undertaking(s), provide written evidence of compliance 
in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 
Commission staff may make reasonable requests for further evidence of compliance, and 
Respondent agrees to provide such evidence.  The certification and supporting material shall be 
submitted to Charles Cain, Unit Chief, FCPA Unit, Division of Enforcement, with a copy to the 
Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of 
the completion of the undertakings. 
 
FF. In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
 
  

 
 
9 
IV. 
 
 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 
 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 
[15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)].  
 
B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 
USD 17,531,666 and prejudgment interest of USD 2,674,479 to the Securities and Exchange 
Commission for transfer to the general fund of the United States Treasury, subject to  Exchange 
Act Section 21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 
SEC Rule of Practice 600.  Respondents shall, within 10 days of the entry of this Order, pay a civil 
money penalty in the amount of USD 5,000,000 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§ 3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Sanofi as a 
Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 
letter and check or money order must be sent to Charles Cain, Division of Enforcement, Securities 
and Exchange Commission, 100 F St., NE, Mailstop 5631, Washington, DC 20549.  
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

 
 
10 
penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 D.  Respondent acknowledges that the Commission is not imposing a civil penalty in 
excess of $5,000,000 based upon its cooperation in a Commission investigation or related 
enforcement action.  If at any time following the entry of the Order, the Division of Enforcement 
(“Division”) obtains information indicating that Respondent knowingly provided materially false 
or misleading information or materials to the Commission, or in a related proceeding, the Division 
may, at its sole discretion and with prior notice to the Respondent, petition the Commission to 
reopen this matter and seek an order directing that the Respondent pay an additional civil penalty.  
Respondent may contest by way of defense in any resulting administrative proceeding whether it 
knowingly provided materially false or misleading information, but may not:  (1) contest the 
findings in the Order; or (2) assert any defense to liability or remedy, including, but not limited to, 
any statute of limitations defense. 
 
E. Respondent shall comply with the undertakings enumerated in Section III, 
paragraphs Z through FF above. 
 
 
 By the Commission. 
 
 
       Brent J. Fields 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 84017 / September 4, 2018 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 3964 / September 4, 2018 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-18708 

 

In the Matter of 

 

Sanofi, 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-DESIST 

PROCEEDINGS, PURSUANT TO SECTION 

21C OF THE SECURITIES EXCHANGE ACT 

OF 1934, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND A 

CEASE-AND-DESIST ORDER 

   

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 

cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 

Securities Exchange Act of 1934 (“Exchange Act”), against Sanofi (“Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings  

herein, except as to the Commission’s jurisdiction over it  and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings, Pursuant to 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth 

below. 

 

  



 

 

2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that  

 

Summary 

  

A. These proceedings arise out of Sanofi’s violations of the internal accounting controls 

and recordkeeping provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”) [15 

U.S.C. § 78m]. 

 

B. As described below, from at least 2011 to 2015, employees and agents of Sanofi’s 

subsidiaries in Kazakhstan, Levant (which includes the countries Jordan, Lebanon, Syria, and the 

region of Palestine), and the Gulf (which includes the countries Bahrain, Kuwait, Qatar, Yemen, 

Oman, and the United Arab Emirates) acted to provide things of value to foreign officials, including 

healthcare professionals (“HCPs”), in order to improperly influence them and increase sales of 

Sanofi products. 

 

C. The funds used for the illicit payments were generated through fake expenses for 

purportedly legitimate travel and entertainment expense, clinical trial and consulting fees, product 

samples, round table meeting expenses, distributor discounts, and credit notes to distributors which 

were improperly recorded as legitimate expenses in Sanofi’s books and records.  Throughout this 

period, Sanofi failed to devise and maintain a sufficient system of internal accounting controls and 

lacked an effective anti-corruption compliance program with regard to Kazakhstan, Levant, and the 

Gulf. 

 

D. Deficiencies in the internal accounting controls and compliance program of Sanofi 

also led to similar improper conduct in connection with sales in other countries in which Sanofi 

operates. 

  

Respondent 

 

E. Sanofi is a corporation organized in France.  Its headquarters are located in Paris, 

France.  Sanofi issued and maintains a class of publicly traded securities registered pursuant to 

Section 12(b) of the Securities Exchange Act of 1934, which have traded on the New York Stock 

Exchange since 2002. 

 

F. Sanofi is a global pharmaceutical company and operates in over 100 countries.  

Sanofi employs approximately 107,000 people worldwide, at least 28 percent of whom are 

designated as sales force personnel.  

 

 

                                                 
1   The findings herein are made pursuant to Respondent's Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  

 



 

 

3 

Other Relevant Entities 

 

G. Sanofi-Aventis Kazakhstan LLP (“Sanofi KZ”) is a company organized in 

Kazakhstan.  Sanofi KZ engages distributors in Kazakhstan to facilitate the sale and distribution of 

pharmaceutical products and maintains its own sales and marketing staff to promote Sanofi 

pharmaceutical products.   

 

H. Sanofi-Aventis Liban S.A.L. (“Sanofi Levant”) is a company organized in 

Lebanon.  Sanofi Levant engages distributors in Levant to facilitate the sale and distribution of 

pharmaceutical products and maintains its own sales and marketing staff to promote Sanofi 

pharmaceutical products.  

 

I. Sanofi Aventis Gulf FZE (“Sanofi Gulf”) is a company organized in the United 

Arab Emirates.  Sanofi Gulf is responsible for pharmaceutical operations in Bahrain, Kuwait, 

Qatar, Yemen, Oman, and the United Arab Emirates.  Sanofi Gulf engages 31 distributors across 

the relevant countries to facilitate the sale of Sanofi pharmaceutical products and maintains its own 

sales and marketing staff to promote Sanofi pharmaceutical products. 

 

Facts 

 

Kazakhstan 

 

J. Between 2007 and 2011, senior managers of Sanofi KZ engaged in a scheme to 

bribe foreign officials to corruptly influence the award of tenders at public institutions.  The funds 

paid to foreign officials were derived from discounts and credit notes2 extended to several 

distributors who colluded with senior managers to kick back funds to Sanofi employees in 

Kazakhstan which were then used to pay Kazakh officials.  

 

K. The scheme took several stages to execute.  First, senior managers of Sanofi KZ 

identified to a distributor a public tender for pharmaceuticals that could be filled by Sanofi 

products. Second, the distributor submitted a bid for the public tender and, when awarded, notified 

Sanofi of its need to purchase products to fulfill the tender.  Third, the sale price between Sanofi 

and the distributor included a pre-determined discount or credit note from the sale price between 

the distributor and the public institution.  Fourth, from the amount of the discount or credit note, 

Sanofi and the distributor were able to designate a portion as the funds which were used to bribe 

Kazakh officials.  Fifth, once the funds which were used to bribe Kazakh officials were earmarked, 

the distributor kicked back those funds to Sanofi employees who then delivered the illicit proceeds 

to Kazakh officials.  The scheme typically involved providing a 20-30 percent discount to the 

distributors, a portion of which was then used as the funds from which bribes were paid to Kazakh 

officials.  The funds kicked back to Sanofi employees were tracked in internal spreadsheets and 

referred to as “marzipans.”   

 

                                                 
2  Credit notes are monies owed to a vendor by Sanofi.  The vendor may apply the credit note(s) 

against monies the vendor owes to Sanofi and, in some cases, the vendor was able to exchange 

the credit note(s) for cash from Sanofi. 



 

 

4 

L. At the time, Sanofi had no standardized commercial policy for distributor discounts 

and did not review the discounts provided by local management. During the relevant period, tender 

sales increased by over 200 percent and included top selling products of Sanofi.  The distributors 

involved in the conduct were some of the largest distributors by sales in Kazakhstan. As a result of 

the improper conduct in Kazakhstan, Sanofi derived profits equivalent to approximately USD 

11,580,099. 

 

Levant 

 

M. From 2011 to 2013, employees and agents of Sanofi Levant participated in a series 

of schemes to pay foreign officials to boost sales of Sanofi products through increased 

prescriptions.  The schemes included sponsorships, gifts, donations, product samples, consulting 

agreements, peer-to-peer meetings, clinical studies, and grants.  The schemes were executed across 

the various business lines in Levant and included the top selling products of Sanofi in the region.  

Some of the schemes involved the participation by senior managers of Sanofi Levant.  The 

instances of improper conduct were not isolated and spanned across government agencies as well 

as private institutions.    

 

N. An example of the corrupt conduct is a 2012 request by an HCP of a large public 

hospital in Jordan for 24 vials of Taxotere as product samples.  At the time, corporate policy for 

product samples required a medical justification.  Taxotere is a product used to treat cancer and is 

one of the most expensive products sold in Levant.  The oncology  manager requested a 

justification from the sales representative and was told 

 

[HCP] is a KOL [key opinion leader] Doctor, our Consumption in [hospital] 

is 124 vials, But we Don’t Give Dr.s in Institution Pt.Support [in public 

hospital product samples for patients].  But He Asked as a Favor. 

 

The oncology manager then approved the request.  Medical Affairs was not involved in reviewing 

or approving the request and no justification was provided regarding the medical use or 

appropriateness.  The quantity provided as samples was nearly 20 percent of the hospital’s 

purchases.  The HCP requesting the samples was a tender committee member at the hospital. 

 

O. The same HCP requesting samples of Taxotere in 2012 was also provided with 

consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation 

of other support to demonstrate the services had been provided.    Sanofi paid to the HCP the 

equivalent in local currency of USD 28,900 in consulting fees and, USD 5500 in speaking fees.  

Sanofi also paid to the HCP USD 125,997 in clinical trial fees.  The consulting fees were 

purportedly related to hosting events and training for HCPs in Iraq.  No supporting documentation 

was found for any of the purported consultancy services.   While the clinical trial fees were 

approved by Medical Affairs, the HCP has never provided reports of findings or observations.  The 

HCP, who provided the ostensible speaking, consulting, and clinical trial services to Sanofi, 

requested that the consulting and clinical trial fees be paid by check to an unrelated individual.  

Sanofi accommodated the request to pay the unrelated individual without explanation or 

justification. 

 



 

 

5 

P. The practice of engaging as consultants influential HCPs who provided vague 

services was also performed with HCPs in the private sector.  As an example, Sanofi Levant 

retained as a consultant the services of a prominent pharmacist in Lebanon for several years 

through 2013.  The pharmacist received annual payments denominated in United States dollars of 

no less than USD 42,000 and in a five-year period received a total of USD 237,300.   The 

consulting services required included preparing training programs and conducting speaking events 

however, evidence of the receipt of those services is sparse or nonexistent.  Sanofi failed to require 

sufficient documentation of the performance of services before making payments to its consultants.  

 

Q. As a result of the improper conduct in Levant, Sanofi derived profits equivalent to 

approximately USD 4,200,000. 

 

The Gulf 

 

R. In the countries comprising Sanofi Gulf, sales managers and medical 

representatives in the Primary Care business unit engaged in a long-standing scheme to submit 

false travel and entertainment reimbursement claims, pool the illicit proceeds of the false schemes, 

and distribute the illicit proceeds to HCPs in the private sector in order to increase prescriptions of 

Sanofi products. 

  

S. The false travel and entertainment claims were made in connection with fake round 

table meetings with HCPs and facilitated by fake receipts issued by collusive vendors known to 

facilitate such activity.  The scheme was quite simple and involved local sales managers.  Medical 

representatives were instructed by their sales managers to submit a doctored receipt for a round 

table meeting that never occurred.  Medical representatives then submitted a doctored receipt for 

reimbursement as a legitimate travel and entertainment expense.  The sales managers approved the 

travel and entertainment expense submission and the medical representatives were reimbursed.  

Medical representatives gave the sales managers the illicit proceeds from the fraudulent 

reimbursement and then pooled the illicit proceeds together into a slush fund to pay HCPs.  

Managers tracked the incoming pool of illicit proceeds from medical representatives and the 

disposition of illicit proceeds to HCPs who were paid to increase prescriptions of Sanofi products. 

 

T. The Primary Care business unit was responsible for several high sales volume 

products in the Gulf.  The scheme employed by sales managers and medical representatives was 

executed from at least 2012 to 2015.  One medical representative estimated that 70 percent of the 

travel and entertainment expense submissions of the Primary Care business unit were related to the 

scheme.  From 2012 to 2015, Sanofi Gulf spent the equivalent of approximately USD 4 million for 

round table meetings with HCPs, although only a portion was used in the scheme. 

 

U. In a 2015 internal audit of commercial operations in the Gulf, one of the findings 

concerned the lack of monitoring of outsourced distributor promotional activities.  An example of a 

specific risk identified in the report included:  “Interactions with HCPs organized by the 

outsourced sales force are not compliant with Sanofi guidelines.  Selection of HCPs, attendance list 

and detailed hospitality costs were neither documented nor reviewed by Sanofi.”  Similar control 

weaknesses and failures in documentation of round table meetings conducted by distributors on 

behalf of Sanofi were found.  Another finding identified the many internal control lapses, including 



 

 

6 

the use of cash to make payment to HCPs, surrounding round table meetings conducted by Sanofi 

itself and lack of documentation and approvals related to attendance of round table meetings.  A 

full audit of the commercial operations in the Gulf had not been conducted since 2007, eight years 

earlier.   

 

V. As a result of the improper conduct in the Gulf, Sanofi derived profits equivalent to 

approximately USD 1,751,567.   

 

W. As a result of the conduct described above, Sanofi violated Sections 13(b)(2)(A) 

and 13(b)(2)(B) of the Exchange Act.  Sanofi violated Section 13(b)(2)(A) of the Exchange Act by 

falsely recording improper payments made by employees and agents as legitimate selling and 

marketing expenses, whose results were then consolidated and reported by Sanofi on its 

consolidated financial statements.  Sanofi also violated Section 13(b)(2)(B) by failing to devise and 

maintain sufficient accounting controls to detect and prevent the making of improper payments to 

foreign officials. 

 

Sanofi’s Remedial Efforts 

X. In determining to accept the Offer, the Commission considered remedial acts 

promptly undertaken by Respondent and cooperation afforded the Commission staff. 

 1.  During the course of the investigation, Respondent provided regular briefings 

regarding the facts developed in its internal investigation in Kazakhstan, Levant, and the Gulf, 

and with respect to other countries.  Respondent timely conveyed the facts it learned in the 

course of its investigation, including facts that the Commission would not have been able to 

readily and independently discover, produced and highlighted particularly relevant documents, 

promptly responded to additional requests by the Commission staff, and provided translations of 

documents as needed. 

 2.  Respondent also provided information regarding its remedial efforts, 

enhancements to its compliance program and implementation of initiatives. Prior to the 

Commission’s investigation, Respondent had begun independently enhancing its compliance 

program by, among other things, developing a centralized compliance program, revamping its 

internal controls and procedures over HCP expenditures, increasing the number of its compliance 

officers globally, enhancing the operation of local compliance committees, and placing 

compliance personnel in high-risk local markets.  Additionally, it enhanced its (1) policies 

governing interactions with HCPs and government officials, gifts, travel, meetings, congresses, 

contributions, and ISTs; (2) anti-corruption training, audits, and due diligence procedures for 

third-party agents; and (3) monitoring for certain Sanofi-sponsored events for HCPs. Respondent 

also reports that it has terminated 121 employees, including senior local business managers, 

accepted resignations from another 14 employees, and disciplined 49 employees.   

  



 

 

7 

Undertakings 

Y. Respondent undertakes to cooperate fully with the Commission in any and all 

investigations, litigation, or other proceedings relating to or arising from the matters described in 

this Order.  In connection with such cooperation, Respondent shall: 

  1.  produce, without service of a notice or subpoena, any and all nonprivileged 

documents and other information requested by the Commission staff subject to any restrictions 

under the law of any foreign jurisdiction; 

 

  2.  use its best efforts to cause its current or former officers, 

employees, agents, and directors to be interviewed by Commission staff at such times and 

places as the staff reasonably may direct; and 

 

  3.  use its best efforts to cause its current or former officers, 

employees, agents, and directors to appear and testify without service of a notice or 

subpoena in such investigations, depositions, hearings, or trials as may be 

requested by the Commission staff. 

 

Z. Respondent undertakes to report on the status of its remediation and 

implementation of compliance for a period of at least two years.  During this two-year period, 

Respondent shall conduct and prepare self reviews, as well as related follow-up, and submit written 

reports of the results, as set forth in the Compliance Program Review Plan (“Plan”) submitted with 

its Offer of Settlement and report to the Commission staff as outlined below: 

 

1. Respondent shall submit to the Commission staff a written report within six (6) 

months of the entry of this Order setting forth a complete description of its 

Foreign Corrupt Practices Act (“FCPA”) and anti-corruption related 

remediation efforts to date, its proposals reasonably designed to improve the 

policies and procedures of Respondent for ensuring compliance with the FCPA 

and other applicable anticorruption laws, and the parameters of the subsequent 

reviews (the “Initial Self Report”).  The Initial Self Report shall be transmitted 

to Charles Cain, FCPA Unit Chief, Division of Enforcement, United States 

Securities and Exchange Commission, 100 F St NE, Washington, DC 20549.  

Respondent may extend the time period for issuance of the Initial Self Report 

with prior written approval of the Commission staff.   

 

2. Respondent shall undertake two (2) follow up reviews (the “Follow up Self 

Reports”), incorporating any comments provided by the Commission staff on 

the previous report(s), and following up on matters identified in earlier reports, 

to further monitor and assess whether the policies and procedures of 

Respondent are reasonably designed to detect and prevent violations of the 

FCPA and other applicable anti-corruption laws. 

 

3. The first Follow up Self Report shall be completed by no later than seven 

months after the Initial Self Report.  The second Follow up Self Report shall be 



 

 

8 

completed by no later than seven months after the first Follow up Self Report.  

Respondent may extend the time period for issuance of the Follow up Self 

Reports with prior written approval of the Commission staff. 

 

AA. Should Respondent during the period of the undertakings discover credible 

evidence, not already reported to the Commission staff, that questionable or corrupt payments or 

questionable or corrupt transfers of property or interests may have been offered, promised, paid, or 

authorized by Respondent entity or person, or any entity or person while working directly for 

Respondent, or that related false books and records have been maintained, Respondent shall 

undertake to promptly report such conduct to the Commission staff. 

 

BB. The periodic reviews and reports submitted by Respondent will likely include 

proprietary, financial, confidential, and competitive business information.  Public disclosure of the 

reports could discourage cooperation, impede pending or potential government investigations and 

thus undermine the objectives of the reporting requirement. For these reasons, among others, the 

reports and the contents thereof are intended to remain and shall remain non-public, except (1) 

pursuant to court order, (2) as agreed by the parties in writing, (3) to the extent that the 

Commission staff determines in its sole discretion that disclosure would be in furtherance of the 

Commission’s discharge of its duties and responsibilities, or (4) is otherwise required by law. 

 

CC. During this two-year period of review, Respondent shall provide its external 

auditors with its annual internal audit plan and reports of the results of internal audit procedures 

and its assessment of its FCPA compliance policies and procedures.   

 

DD. During this two-year period of review, Respondent shall provide the Commission 

staff with any written reports or recommendations provided by Respondent’s external auditors 

response to Respondent’s annual internal audit plan, reports of the results of internal audit 

procedures, and its assessment of its FCPA compliance policies and procedures. 

 

EE. Respondent shall certify, in writing, compliance with the undertaking(s) set forth 

above.  The certification shall identify the undertaking(s), provide written evidence of compliance 

in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 

Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence.  The certification and supporting material shall be 

submitted to Charles Cain, Unit Chief, FCPA Unit, Division of Enforcement, with a copy to the 

Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of 

the completion of the undertakings. 

 

FF. In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

 

  



 

 

9 

IV. 

 

 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 

 

 A. Respondent cease and desist from committing or causing any violations and any 

future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 

[15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)].  

 

B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 

USD 17,531,666 and prejudgment interest of USD 2,674,479 to the Securities and Exchange 

Commission for transfer to the general fund of the United States Treasury, subject to  Exchange 

Act Section 21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 

SEC Rule of Practice 600.  Respondents shall, within 10 days of the entry of this Order, pay a civil 

money penalty in the amount of USD 5,000,000 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§ 3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying Sanofi as a 

Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 

letter and check or money order must be sent to Charles Cain, Division of Enforcement, Securities 

and Exchange Commission, 100 F St., NE, Mailstop 5631, Washington, DC 20549.  

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 



 

 

10 

penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 D.  Respondent acknowledges that the Commission is not imposing a civil penalty in 

excess of $5,000,000 based upon its cooperation in a Commission investigation or related 

enforcement action.  If at any time following the entry of the Order, the Division of Enforcement 

(“Division”) obtains information indicating that Respondent knowingly provided materially false 

or misleading information or materials to the Commission, or in a related proceeding, the Division 

may, at its sole discretion and with prior notice to the Respondent, petition the Commission to 

reopen this matter and seek an order directing that the Respondent pay an additional civil penalty.  

Respondent may contest by way of defense in any resulting administrative proceeding whether it 

knowingly provided materially false or misleading information, but may not:  (1) contest the 

findings in the Order; or (2) assert any defense to liability or remedy, including, but not limited to, 

any statute of limitations defense. 

 

E. Respondent shall comply with the undertakings enumerated in Section III, 

paragraphs Z through FF above. 

 

 

 By the Commission. 

 

 

       Brent J. Fields 

       Secretary