Cisco suspected of paying kickbacks in Russia under the guise of discounts

Portal BuzzFeed has published its own investigation into the activities of US network equipment manufacturer Cisco in Russia due to the fact that the company announced the start of checking the evidence that its representatives could pay kickbacks to Russian officials.
31.03.2014
Forbes
Origin source
As follows from the investigation that Russian officials could not receive kickbacks from the Cisco itself, but from its resellers, but Russian officials corporations were aware of the payments and closed his eyes to them. Two former employees of Cisco told reporters that kickbacks in Russian system was based on providing large discounts to resellers, who had good connections in the Russian structures, is the ultimate buyers of Cisco products. As a rule, discount is 35-40% of the list price of the product, but in some cases it reached 68%. After the completion of the sale of mediators obtained from Cisco part of the discounts and the money transferred to offshore bank accounts - in particular, in Cyprus, the British Virgin Islands and Bermuda, the portal writes. Former employees of the Cisco, with whom talked Correspondent, could not say who owned these offshore accounts, and eventually received the money from the discount.

According to public information, in Russia from Cisco for at least 18 major distributors. Of these 17 companies to requests for comment did not respond. BuzzFeed managed to get through to the last employee distributiveyutora, the company "Marvel", who refused to confirm the information about how to obtain discounts from Cisco and laughed question, said that April Fools joke yet. According to BuzzFeed, he asked to send questions by e-mail, but the letter did not respond.

According to BuzzFeed, Cisco has applied the above scheme of cooperation with Russian intermediaries until 2011. When the scheme was launched, it is not clear. One source told the portal that, in 2008, Cisco received a warning from the external auditors of high legal risks of operations with two Russian resellers, registered in offshore zones. In the explanation of the Law on the Foreign Corrupt Practices issued by the Ministry of Justice of the United States for US companies operating in other countries, it emphasizes that companies should be avoided in cases where an intermediary requires transfer payments to offshore accounts.

According to BuzzFeed sources, in 2010 the headquarters of Cisco sent a team to the Moscow office of Auditors, whose task was to search for evidence of possible acts of corruption. Sources said that the auditors were locked in the meeting roomsc-room with one of the top managers of Cisco and directly asked the Russian office: "Does Cisco bribes in Russia to pay? Whether the money is sent to civil servants, "the words of the interlocutors of the portal, in response to a Russian manager just shrugged and English with a heavy accent said:" Everything in Russia take the money and give money. It is impossible to do business in Russia without it. " He said he did not know any specific cases.

At the end of December 2013, Vice-President of Cisco Roxane Marenberg the official blog of the corporation said that the company is in response to requests from the Ministry of Justice and the Commission on the Securities and Exchange Commission (SEC) launched an internal investigation into its operations in Russia and some other countries for possible violations legislation. In March, the newspaper The Wall Street Journal reported that Cisco check the data on possible cases of bribery Russian officials and representatives from the CIS Corporation.