In re ASTRAZENECA PLC

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 78730 / August 30, 2016 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3798 / August 30, 2016 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-17517 
 
In the Matter of 
 
ASTRAZENECA PLC 
 
Respondent. 
 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
  
 
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist  proceedings  be,  and  hereby  are,  instituted  pursuant  to  Section  21C  of  the  Securities 
Exchange Act of 1934 (“Exchange Act”), against AstraZeneca PLC (“AZN” or “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 Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing 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 
  
These  proceedings  arise  out  of  violations  of  the  internal  controls  and  recordkeeping 
provisions  of  the  Foreign  Corrupt  Practices  Act  (the “FCPA”) by AZN and its wholly-owned 
subsidiaries in  China and  Russia.   Through at least 2010, AZN failed  to devise and  maintain a 
sufficient system of internal accounting controls relating to the interactions of its China and Russia 
subsidiaries with government  officials,  the  vast  majority  of  whom  were health  care  providers 
(“HCPs”), at  state-owned  and  state-controlled entities in  China and  Russia.   Sales  and  marketing 
staff,  along  with  multiple  levels  of  management  at  the  two  AZN  subsidiaries, designed and 
authorized  several  schemes  to  make  improper  payments  of gifts,  conference  support,  travel,  cash 
and  other  benefits  to  HCPs  to  reward  or  influence  their  purchases  of  AZN  pharmaceuticals.   In 
addition,  employees  in  the  China  subsidiary made  cash  payments to local officials  to  reduce  or 
avoid fines that were levied against the China subsidiary.  AZN falsely recorded all of the improper 
payments  by its China  and  Russia  subsidiaries  as  bona  fide  business  expenses in  its consolidated 
financial statements. 
  
 
RESPONDENT 
 
1. AZN is   a   global   biopharmaceutical   company   incorporated   in   the   U.K.   and 
headquartered  in  London.   Throughout  the  relevant  period, AZN’s American  Depositary  Shares 
have been registered  with  the  Commission  pursuant  to  Section  12(b)  of  the  Exchange  Act  and 
publicly  traded  on  the  New  York  Stock  Exchange  (NYSE:    AZN),  as  well  as  the  London  and 
Stockholm Exchanges.  AZN files annual and quarterly reports as required under Section 13 of the 
Exchange Act and Rules thereunder.     
   
 
OTHER RELEVANT ENTITIES 
 
 2. AstraZeneca (Wuxi) Trading Co. Limited (“AZ China”) is a wholly-owned 
subsidiary of AZN and was responsible for AZN’s sales and marketing functions in China during 
the relevant period.  
 
  3. AstraZeneca  UK Limited is  a  wholly-owned  subsidiary  of  AZN  and  had  a 
representative office in Russia through which AZN operated in Russia prior to 2007. 
  
                                                 
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 
 4. OOO AstraZeneca Pharmaceuticals is a wholly-owned subsidiary of AZN through 
which it has operated in Russia since 2007.  (AstraZeneca UK Limited’s representative office in 
Russia and OOO AstraZeneca Pharmaceuticals are referred to individually or collectively herein as 
“AZ Russia.”)   
FACTS 
 
 Improper Conduct at AZ China  
 
 5. From 2007 until 2010, AZ China sales staff made numerous improper payments in 
cash,  gifts  and  other  items  to  HCPs  as  incentives  to  purchase or  prescribe  AZN  pharmaceuticals.  
Sales  and  marketing  team  members, including  managers within  various  business  units  at AZ 
China, designed  and  implemented  the  improper  payment  schemes.    The  HCPs  who  received  the 
improper incentives worked for various government entities in several regions throughout China. 
 
 6. Between at  least  2006 and 2009, certain AZ  China sales  staff  and  their  managers 
maintained written charts and schedules that recorded the amount of forecasted or actual payments 
of maintenance fees, gifts, entertainment and other expenses that AZ China would make per month 
or  year  in  numerous  regions  throughout  China. In  some  cases,  the  payments referenced gifts, 
entertainment and other expenses to individual physicians, and in other cases, maintenance fees to 
a  particular  hospital  or  medical  department,  as  designated  by  an  individual  physician. AZ  China 
sales  staff management approved these  payments with  the  expectation  that  the  HCPs  would 
increase  purchases  of  AZN  products  during  the  corresponding period,  or  favorably  influence  the 
inclusion of AZN products on formulary or reimbursement drug listings.   
 
 7. In numerous instances, AZ China sales staff submitted, and managerial employees 
knowingly approved, fake fa  piao (tax  receipts) for  fraudulent reimbursements  to  generate cash 
that was used to make improper payments to HCPs.  
 
8. Other methods were also used, such as establishing bank accounts in doctors’ 
names as part of an improper payment scheme, or engaging a collusive travel vendor who 
submitted fake or inflated invoices to generate cash that could be used to funnel money to HCPs.   
 
9. As a result of the deficient controls, AZ China employees were regularly 
reimbursed for submitted expenses despite inadequate supporting documentation.  
  
10. Similarly, AZ China paid speaker fees to HCPs despite AZ China service contracts 
that were incomplete, containing no meeting date, venue, subject or fees associated with the 
particular speaker event.  In some instances, the related speaker engagement was totally fabricated 
and never occurred.  Additionally, sales and marketing team members were able to bypass formal 
approval procedures that required validation by a designated signatory in the company’s electronic 
approval system.   
 
11. In addition, in connection with inquiries by local Chinese government officials in 
2008, AZ China employees made payments in cash to the local officials to get reductions or 
dismissals of proposed financial sanctions against the subsidiary.  

 4 
 
 Improper Conduct at AZ Russia 
 
12. From at least 2005 until 2010, AZ Russia employees provided improper incentives 
to government-employed HCPs in connection with sales of AZN pharmaceutical products.   
 
13. As was done by AZ China employees, AZ Russia employees created and 
maintained charts tracking the names of HCPs, the regions in which they practiced, their level of 
influence in making purchasing decisions for the respective entities where they worked and the 
manner in which they could be motivated to purchase AZN products through gifts, conference 
support and other means. 
 
 14. Employees at several levels of AZ Russia management directed or condoned their 
subordinates’ practices of providing improper benefits to government-employed HCPs, which 
occurred in multiple regions where AZ Russia operates. 
 
COOPERATION AND REMEDIAL EFFORTS  
 
 15. AZN   did   not   self-report   its   violations;   nevertheless,   the   company   provided 
significant  cooperation  to  the  Commission  during  the  entire  course  of  its  investigation.    AZN 
immediately  took  a  cooperative  posture  and  ensured  that  it  consistently  provided  complete 
information  in  a  timely  manner.    AZN  voluntarily and  timely disclosed  information  obtained 
during its own internal investigation, provided translations of  key  documents, and disclosed facts 
that the Commission would not have been able to readily and independently discover.  AZN also 
kept  the  staff  regularly  informed  of  its  ongoing  remedial  efforts  throughout  the  course  of  the 
investigation.   
 
16. AZN had begun independently remediating deficiencies in its compliance program 
prior to the Commission’s investigation.  The company incorporated information developed in the 
course of the Commission’s investigation to further enhance its controls and compliance program.  
AZN made significant increases to both capital and human resources available to compliance at the 
corporate  level  and  in  the  local  markets.    It  has  developed  a  centralized  compliance  program, 
revamped  its  internal  controls  and  procedures,  and  placed  key  compliance  personnel  in  high-risk 
local markets.    Among  the other improvements  made  are  enhancements  to  AZN’s  policies 
governing interactions with HCPs and government officials, gifts, travel and entertainment, third-
party  engagements,  meetings,  congresses, and  contributions.    AZN  also  enhanced its  anti-
corruption training and audits.  Additionally, AZN has taken various steps with regard to involved 
employees,   including   targeted   training,   reassignment   to   lower-risk   areas   of   responsibility, 
voluntary separations, and dismissals.  
 
LEGAL STANDARDS 
 
17.  Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated or is about to violate any provision 
of the Exchange Act or any rule or regulation thereunder or any other person that is, was or would 

 5 
be a cause of the violation due to an act or omission the person knew or should have known would 
contribute to such violation. 
 
 Violations of the Books and Records and Internal Controls Provisions of the FCPA 
 
18. Section  13(b)(2)(A)  of  the  Exchange  Act,  the  books  and  records  provision  of  the 
FCPA,  requires  every  issuer  with  a  class  of  securities  registered  pursuant  to  Section  12  of  the 
Exchange  Act  “to  make  and  keep  books,  records,  and  accounts,  which,  in  reasonable  detail, 
accurately and fairly reflect the transactions and dispositions of the assets of the issuer.”  15 U.S.C. 
§ 78m(b)(2)(A).   As  described  above, AZN  violated  Section  13(b)(2)(A)  when  its  subsidiaries 
mischaracterized improper payments as legitimate expenses in AZN’s books and records. 
 
19. Section  13(b)(2)(B)  of  the  Exchange  Act,  the  internal  controls  provision  of  the 
FCPA, requires every  issuer  with  a  class  of  securities  registered  pursuant  to  Section  12  of  the 
Exchange  Act to “devise  and  maintain  a  system  of  internal  accounting  controls  sufficient  to 
provide reasonable assurances that (i) transactions are executed in accordance with management’s 
general  or  specific  authorization;  (ii)  transactions  are  recorded  as  necessary   (I)  to  permit 
preparation of financial statements in conformity with generally accepted accounting principles or 
any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) 
access  to  assets  is  permitted  only  in  accordance  with  management’s  general  or specific 
authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 
reasonable  intervals  and  appropriate  action  is  taken  with  respect  to  any  differences.”  15  U.S.C. 
§ 78m(b)(2)(B).   
 
20. As  described  above, AZN violated  Section  13(b)(2)(B)  of  the  Exchange  Act  by 
failing  to  devise  and  maintain  a sufficient system  of  internal  accounting  controls relating  to 
employee   reimbursements,   third-party   vendors,   speaker   fees,   conferences,   gifts,   travel   and 
entertainment.  AZN  did  not  adequately  enforce  its  corporate  policy  against  making  improper 
payments  to  government  officials  with  respect  to  its  subsidiaries  in  Russia  and  China.   Although 
the  company  had  a  written  policy  that  prohibited  these  unauthorized  transactions, AZN  did  not 
employ reasonable controls to detect and prevent such improper payments.  AZN failed to ensure 
that  its  Russia  and  China  subsidiaries maintained  accurate  and  complete  recording  of  financial 
transactions  referencing  payments  to  government  officials.    These  records never  appropriately 
described  the transactions,  and were  always inaccurate  or  incomplete, when  the  purpose  of  the 
payment  involved  an  improper  incentive  to  the  government  official.   The  company also did  not 
employ reasonable measures to ensure that sponsorship activities involving government officials in 
China were appropriately approved through the company’s established electronic system by a pre-
designated official in the country.  Additionally, AZN did not provide adequate FCPA training to 
its  sales  and  marketing  employees  in  China  and  Russia  who  had  routine  interactions  with 
government  officials  in  the  healthcare  industry  that  posed  a  high  risk  for  bribery  and  corruption.  
Furthermore,  AZN  did  not  employ  reasonable  due  diligence  and  monitoring  of  third-party 
contractors  engaged  by  its  China  and  Russia  subsidiaries,  such  as  travel  vendors  who  provided 
false invoices to the subsidiaries’ employees that facilitated the unauthorized use of corporate 
funds to improperly incentivize HCPs.   
 

 6 
IV. 
 
 In  view  of  the  foregoing,  the  Commission  deems  it  appropriate  to  impose  the  sanctions 
agreed to in Respondent AZN’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent AstraZeneca PLC 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 Exchange Act [15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)]. 
 
 B. Respondent  shall, within fourteen  (14) days  of  the  entry  of  this  Order,  pay 
disgorgement of $4,325,000,  which  represents  profits  gained  as  a  result  of  the  conduct  described 
herein, prejudgment interest of $822,000, and a civil money penalty of $375,000 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 of disgorgement and prejudgment interest is 
not  made,  additional  interest  shall  accrue  pursuant  to  SEC  Rule  of  Practice  600,  and  if  timely 
payment  of  a  civil  money  penalty  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 
AstraZeneca PLC 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 E. Cain, Deputy Chief, 
Foreign   Corrupt   Practices   Act   Unit, Division   of   Enforcement,   Securities   and   Exchange 
Commission, 100 F Street, N.E., Washington, DC 20549-5648.     
 

 7 
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 
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 $375,000 based upon its cooperation in a Commission investigation and 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 money 
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. 
 
 
 By the Commission. 
 
 
 
 
       Brent J. Fields 
       Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 78730 / August 30, 2016 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 3798 / August 30, 2016 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-17517 

 

In the Matter of 

 

ASTRAZENECA PLC 

 

Respondent. 

 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

  

 

 

I. 
 

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

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

Exchange Act of 1934 (“Exchange Act”), against AstraZeneca PLC (“AZN” or “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 Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing 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 

  

These proceedings arise out of violations of the internal controls and recordkeeping 

provisions of the Foreign Corrupt Practices Act (the “FCPA”) by AZN and its wholly-owned 

subsidiaries in China and Russia.  Through at least 2010, AZN failed to devise and maintain a 

sufficient system of internal accounting controls relating to the interactions of its China and Russia 

subsidiaries with government officials, the vast majority of whom were health care providers 

(“HCPs”), at state-owned and state-controlled entities in China and Russia.  Sales and marketing 

staff, along with multiple levels of management at the two AZN subsidiaries, designed and 

authorized several schemes to make improper payments of gifts, conference support, travel, cash 

and other benefits to HCPs to reward or influence their purchases of AZN pharmaceuticals.  In 

addition, employees in the China subsidiary made cash payments to local officials to reduce or 

avoid fines that were levied against the China subsidiary.  AZN falsely recorded all of the improper 

payments by its China and Russia subsidiaries as bona fide business expenses in its consolidated 

financial statements. 

  

 

RESPONDENT 

 

1. AZN is a global biopharmaceutical company incorporated in the U.K. and 

headquartered in London.  Throughout the relevant period, AZN’s American Depositary Shares 

have been registered with the Commission pursuant to Section 12(b) of the Exchange Act and 

publicly traded on the New York Stock Exchange (NYSE:  AZN), as well as the London and 

Stockholm Exchanges.  AZN files annual and quarterly reports as required under Section 13 of the 

Exchange Act and Rules thereunder.     

   

 

OTHER RELEVANT ENTITIES 

 

 2. AstraZeneca (Wuxi) Trading Co. Limited (“AZ China”) is a wholly-owned 

subsidiary of AZN and was responsible for AZN’s sales and marketing functions in China during 

the relevant period.  

 

  3. AstraZeneca UK Limited is a wholly-owned subsidiary of AZN and had a 

representative office in Russia through which AZN operated in Russia prior to 2007. 

  

                                                 
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 

 4. OOO AstraZeneca Pharmaceuticals is a wholly-owned subsidiary of AZN through 

which it has operated in Russia since 2007.  (AstraZeneca UK Limited’s representative office in 

Russia and OOO AstraZeneca Pharmaceuticals are referred to individually or collectively herein as 

“AZ Russia.”)   

FACTS 

 

 Improper Conduct at AZ China  

 

 5. From 2007 until 2010, AZ China sales staff made numerous improper payments in 

cash, gifts and other items to HCPs as incentives to purchase or prescribe AZN pharmaceuticals.  

Sales and marketing team members, including managers within various business units at AZ 

China, designed and implemented the improper payment schemes.  The HCPs who received the 

improper incentives worked for various government entities in several regions throughout China. 

 

 6. Between at least 2006 and 2009, certain AZ China sales staff and their managers 

maintained written charts and schedules that recorded the amount of forecasted or actual payments 

of maintenance fees, gifts, entertainment and other expenses that AZ China would make per month 

or year in numerous regions throughout China. In some cases, the payments referenced gifts, 

entertainment and other expenses to individual physicians, and in other cases, maintenance fees to 

a particular hospital or medical department, as designated by an individual physician. AZ China 

sales staff management approved these payments with the expectation that the HCPs would 

increase purchases of AZN products during the corresponding period, or favorably influence the 

inclusion of AZN products on formulary or reimbursement drug listings.   

 

 7. In numerous instances, AZ China sales staff submitted, and managerial employees 

knowingly approved, fake fa piao (tax receipts) for fraudulent reimbursements to generate cash 

that was used to make improper payments to HCPs.  

 

8. Other methods were also used, such as establishing bank accounts in doctors’ 

names as part of an improper payment scheme, or engaging a collusive travel vendor who 

submitted fake or inflated invoices to generate cash that could be used to funnel money to HCPs.   

 

9. As a result of the deficient controls, AZ China employees were regularly 

reimbursed for submitted expenses despite inadequate supporting documentation.  

  

10. Similarly, AZ China paid speaker fees to HCPs despite AZ China service contracts 

that were incomplete, containing no meeting date, venue, subject or fees associated with the 

particular speaker event.  In some instances, the related speaker engagement was totally fabricated 

and never occurred.  Additionally, sales and marketing team members were able to bypass formal 

approval procedures that required validation by a designated signatory in the company’s electronic 

approval system.   

 

11. In addition, in connection with inquiries by local Chinese government officials in 

2008, AZ China employees made payments in cash to the local officials to get reductions or 

dismissals of proposed financial sanctions against the subsidiary.  



 4 

 

 Improper Conduct at AZ Russia 

 

12. From at least 2005 until 2010, AZ Russia employees provided improper incentives 

to government-employed HCPs in connection with sales of AZN pharmaceutical products.   

 

13. As was done by AZ China employees, AZ Russia employees created and 

maintained charts tracking the names of HCPs, the regions in which they practiced, their level of 

influence in making purchasing decisions for the respective entities where they worked and the 

manner in which they could be motivated to purchase AZN products through gifts, conference 

support and other means. 

 

 14. Employees at several levels of AZ Russia management directed or condoned their 

subordinates’ practices of providing improper benefits to government-employed HCPs, which 

occurred in multiple regions where AZ Russia operates. 

 

COOPERATION AND REMEDIAL EFFORTS  

 

 15. AZN did not self-report its violations; nevertheless, the company provided 

significant cooperation to the Commission during the entire course of its investigation.  AZN 

immediately took a cooperative posture and ensured that it consistently provided complete 

information in a timely manner.  AZN voluntarily and timely disclosed information obtained 

during its own internal investigation, provided translations of key documents, and disclosed facts 

that the Commission would not have been able to readily and independently discover.  AZN also 

kept the staff regularly informed of its ongoing remedial efforts throughout the course of the 

investigation.   

 

16. AZN had begun independently remediating deficiencies in its compliance program 

prior to the Commission’s investigation.  The company incorporated information developed in the 

course of the Commission’s investigation to further enhance its controls and compliance program.  

AZN made significant increases to both capital and human resources available to compliance at the 

corporate level and in the local markets.  It has developed a centralized compliance program, 

revamped its internal controls and procedures, and placed key compliance personnel in high-risk 

local markets.  Among the other improvements made are enhancements to AZN’s policies 

governing interactions with HCPs and government officials, gifts, travel and entertainment, third-

party engagements, meetings, congresses, and contributions.  AZN also enhanced its anti-

corruption training and audits.  Additionally, AZN has taken various steps with regard to involved 

employees, including targeted training, reassignment to lower-risk areas of responsibility, 

voluntary separations, and dismissals.  

 

LEGAL STANDARDS 

 

17.  Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated or is about to violate any provision 

of the Exchange Act or any rule or regulation thereunder or any other person that is, was or would 



 5 

be a cause of the violation due to an act or omission the person knew or should have known would 

contribute to such violation. 

 

 Violations of the Books and Records and Internal Controls Provisions of the FCPA 

 

18. Section 13(b)(2)(A) of the Exchange Act, the books and records provision of the 

FCPA, requires every issuer with a class of securities registered pursuant to Section 12 of the 

Exchange Act “to make and keep books, records, and accounts, which, in reasonable detail, 

accurately and fairly reflect the transactions and dispositions of the assets of the issuer.”  15 U.S.C. 

§ 78m(b)(2)(A).  As described above, AZN violated Section 13(b)(2)(A) when its subsidiaries 

mischaracterized improper payments as legitimate expenses in AZN’s books and records. 

 

19. Section 13(b)(2)(B) of the Exchange Act, the internal controls provision of the 

FCPA, requires every issuer with a class of securities registered pursuant to Section 12 of the 

Exchange Act to “devise and maintain a system of internal accounting controls sufficient to 

provide reasonable assurances that (i) transactions are executed in accordance with management’s 

general or specific authorization; (ii) transactions are recorded as necessary (I) to permit 

preparation of financial statements in conformity with generally accepted accounting principles or 

any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) 

access to assets is permitted only in accordance with management’s general or specific 

authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 

reasonable intervals and appropriate action is taken with respect to any differences.”  15 U.S.C. 

§ 78m(b)(2)(B).   

 

20. As described above, AZN violated Section 13(b)(2)(B) of the Exchange Act by 

failing to devise and maintain a sufficient system of internal accounting controls relating to 

employee reimbursements, third-party vendors, speaker fees, conferences, gifts, travel and 

entertainment.  AZN did not adequately enforce its corporate policy against making improper 

payments to government officials with respect to its subsidiaries in Russia and China.  Although 

the company had a written policy that prohibited these unauthorized transactions, AZN did not 

employ reasonable controls to detect and prevent such improper payments.  AZN failed to ensure 

that its Russia and China subsidiaries maintained accurate and complete recording of financial 

transactions referencing payments to government officials.  These records never appropriately 

described the transactions, and were always inaccurate or incomplete, when the purpose of the 

payment involved an improper incentive to the government official.  The company also did not 

employ reasonable measures to ensure that sponsorship activities involving government officials in 

China were appropriately approved through the company’s established electronic system by a pre-

designated official in the country.  Additionally, AZN did not provide adequate FCPA training to 

its sales and marketing employees in China and Russia who had routine interactions with 

government officials in the healthcare industry that posed a high risk for bribery and corruption.  

Furthermore, AZN did not employ reasonable due diligence and monitoring of third-party 

contractors engaged by its China and Russia subsidiaries, such as travel vendors who provided 

false invoices to the subsidiaries’ employees that facilitated the unauthorized use of corporate 

funds to improperly incentivize HCPs.   

 



 6 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent AZN’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent AstraZeneca PLC 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 Exchange Act [15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)]. 

 

 B. Respondent shall, within fourteen (14) days of the entry of this Order, pay 

disgorgement of $4,325,000, which represents profits gained as a result of the conduct described 

herein, prejudgment interest of $822,000, and a civil money penalty of $375,000 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 of disgorgement and prejudgment interest is 

not made, additional interest shall accrue pursuant to SEC Rule of Practice 600, and if timely 

payment of a civil money penalty 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 

AstraZeneca PLC 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 E. Cain, Deputy Chief, 

Foreign Corrupt Practices Act Unit, Division of Enforcement, Securities and Exchange 

Commission, 100 F Street, N.E., Washington, DC 20549-5648.     

 



 7 

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 

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 $375,000 based upon its cooperation in a Commission investigation and 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 money 

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. 

 

 

 By the Commission. 

 

 

 

 

       Brent J. Fields 

       Secretary