Panalpina, U.S. near legal settlement

Panalpina, U.S. near legal settlement    Swiss forwarder Panalpina Group on Thursday said “settlement discussions with U.S. authorities are nearing finalization,” regarding a U.S. government investigation for several years over alleged violations of the Foreign Corrupt Practices Act (FCPA), mainly in Nigeria.
   “In view of the advanced stage of the settlement negotiations with the U.S. Department of Justice and the U.S. Securities and Exchange Commission, Panalpina has decided to reserve 120 million Swiss francs ($110.7 million), an amount anticipated to cover fines, other penalties and legal expenses relating to the settlement of both the U.S. Foreign Corrupt Practices Act and the U.S. antitrust investigations,” the company said.

Ribar

   It added the charge would be reflected in the company’s 2010 half-year financial statements. It added, however, “the reserve does not cover other ongoing, non-U.S. antitrust investigations against the international freight forwarding industry, in particular the proceeding launched by the European Commission as Panalpina is unable to predict the amount of any potential fine with certainty.”
   Panalpina made the announcement about the anticipated settlement in its quarterly earnings report in which it reported a consolidated net profit of CHF37,000 ($34,000) in the first quarter of 2010 compared to CHF1.2 million in the same 2009 period.
   Revenue from forwarding services in the quarter was CHF1.96 billion ($1.8 billion), down 1.6 percent from the same 2009 period The drops came despite a 24 percent increase in air volumes and a 22 percent increase in ocean freight in the quarter.
   “Despite these very encouraging growth rates, volumes remained below pre-crisis levels,” the company said.
   Monika Ribar, Panalpina’s chief executive, said gradual recovery of global markets is continuing and freight volumes picking up.
   'We are well on track with the implementation of our procurement and sales initiatives, managed to keep our costs at low levels and significantly increased productivity. Our volumes have been starting to outpace the market again and I am confident that we will also see our profitability improving further in the coming months,' she said.
   Panalpina had said in its annual report earlier this year that it had commenced settlement negotiations with the Justice Department after about three years of “in-depth reviews of operational activities in several countries, among them difficult markets in West Africa and Central Asia.”
   The company said it has taken “numerous initiatives to strengthen and expand compliance on a global level” with laws such as the FCPA, which seeks to prevent payments to foreign government officials to assist in obtaining or retaining business.
   Panalpina's noted its compliance initiatives include the decision to close its Nigerian organization and restructure its operations in West Africa.
   Panalpina also revealed in its quarterly earnings report that it expects only a minor impact on its business from the recent temporary closure of the European air space due to the eruption of the Eyjafjallaj'kull volcano in Iceland. ' Chris Dupin