Lafarge SA resolves Syria operations case with DoJ

Building materials provider Holcim says it supports the agreement reached by Lafarge SA with the U.S. Department of Justice (DOJ) to resolve the DOJ’s inquiry into Lafarge SA and its long-defunct subsidiary Lafarge Cement Syria (LCS).
Concrete Plants, Equipment & Applications / October 18, 2022
By Liam McLoughlin
 The Lafarge SA agreement with the DoJ relates to activities between August 2013 and October 2014, before Lafarge SA became part of Holcim in 2015
The Lafarge SA agreement with the DoJ relates to activities between August 2013 and October 2014, before Lafarge SA became part of Holcim in 2015

The agreement relates to the legacy conduct of certain former Lafarge SA and LCS executives during the Syrian civil war, before Holcim acquired Lafarge SA in 2015. 

Under the terms of the resolution, Lafarge SA and LCS will pay a financial penalty of US$777.78m and have agreed to plead guilty to one count of conspiring to provide material support to designated foreign terrorist organisations in Syria between August 2013 and October 2014, by which time LCS had ceased operations in the country. 

In a statement Holcim said: "None of the conduct involved Holcim, which has never operated in Syria, or any Lafarge operations or employees in the United States, and it is in stark contrast with everything that Holcim stands for. The DOJ noted that former Lafarge SA and LCS executives involved in the conduct concealed it from Holcim before and after Holcim acquired Lafarge SA, as well as from external auditors."

Holcim says that when it learned of the allegations from media reports in 2016, it proactively and voluntarily conducted an extensive investigation, led by a major US law firm and overseen by the board of directors. It adds that it publicly disclosed the principal investigative findings in 2017 and separated from former Lafarge SA and LCS executives who were involved in these events. 

The DOJ noted that Holcim has effective compliance and risk management controls and functions in place to detect and prevent any similar potential conduct. As a result, the DOJ determined that the appointment of an independent compliance monitor is not necessary.

Holcim says it operates to the highest ethical standards in strict compliance with the laws of all its jurisdictions. Holcim says the resolution reaffirms its commitment to conducting all its business with utmost integrity.

In a statement, Lafarge SA said: “Lafarge SA and LCS have accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge’s Code of Conduct. We deeply regret that this conduct occurred and have worked with the U.S. Department of Justice to resolve this matter.“

Lafarge is also facing proceedings in France related to the Syria operations case. It says it continues to cooperate fully with the French authorities in their investigation of the conduct and will defend itself against any judicial actions that it regards as unjustified in the French proceedings.

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