3M has agreed to pay more than US$6.5 million to resolve US charges of Foreign Corrupt Practices Act violations (FCPA) related to a 3M subsidiary in China, the Securities and Exchange Commission said on Friday (Aug 25).

The SEC alleged that a 3M unit in China made arrangements to provide Chinese government officials with overseas travel, including tourism activities, to induce them to purchase company products, according to a statement from the US regulator.

Employees at the 3M unit colluded with local travel agencies to make the arrangements, with the subsidiary paying nearly US$1 million to fund at least 24 trips for Chinese government officials that included tourism activities and shopping visits, the SEC alleged.

3M did not admit or deny the SEC’s findings, according to the statement.

“This matter highlights the dangers to companies with global operations posed by inadequate internal accounting controls,” said SEC’s FCPA unit chief Charles Cain.

3M said it discovered in 2018 that some employees had circumvented company controls and ethics policy, and the company reported the matter to the US government and fully cooperated with its investigation.

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“3M has also taken appropriate action to address this violation of company policy with those involved, and enhanced our internal controls to help prevent similar instances from occurring in the future,” the company said in an emailed statement. REUTERS