A Conditional Agreement was recently reached between Teva Pharmaceuticals Industries Ltd. ("Company") and the Israeli State Attorney's Office, pursuant to which the Company shall pay the State of Israel a fine in the total aggregate amount of NIS 75 million (app. $22 million) due to, and admit to the facts in respect of, the Company's involvement in a foreign bribery affair in 2012.

The 2012 affair spanned various bribery payments made by the Company via its foreign subsidiaries to public officials in Russian, the Ukraine and Mexico in violation of the FCPA (the Foreign Corrupt Practice Act), which prohibits the bribery of foreign public officials, as well as such other similar and applicable domestic laws in the countries involved (including, inter alia, the Israeli Penal Law). Such bribery payments were written off under the Company's consolidated financial reports as legitimate business expenses so as to reflect a profit of approximately USD 220 million in the Company's books, all by way of transfer of payments to foreign public officials prohibited by law. Such actions ultimately led to an investigation conducted by the DOJ and SEC and resulted in a Deferred Prosecution Agreement ("DPA") reached between the Company and the American law enforcement authorities in December 2016. As part of the DPA the Company agreed to pay a fine of USD 519 million in order to settle the civil and criminal charges brought against it in regards to violations of the FCPA, and it was further concluded that an independent corporate monitor was to be appointed to oversee the implantation of the Company's compliance program and reform for a period of three years.

As was recently made public, the Company has now further concluded a similar Conditional Agreement with the Israeli authorities in accordance with the Israeli Securities Law, 1968, namely with the Tax and Economic Department at the State Attorney's Office and the Israel Securities Authority. According to this Conditional Agreement, the Company admitted the facts surrounding the 2012 affairs, i.e. the provision of bribery to foreign public officials, and further agreed to pay a fine of NIS 75 million. Notably, in the drafting of the Conditional Agreement the Israeli law enforcement agencies particularly considered the fine already imposed by the American authorities and paid by the Company, the Company's compliance program which existed even prior to the 2012 affair, and the extensive reform this compliance program underwent following the investigations conducted by the American authorities.

Such compliance reform fundamentally shifted those procedures, protocols and measures the Company implements when assessing and processing payments made either within the Company or by the Company to another entity as part of its global activity, and further led to the termination of any relations between the Company and any such entity or individual which were connected, either directly or indirectly, with the 2012 affair. The Company's current compliance program mandates that the Company, its organs, employees, representatives and agents must all strictly comply with any applicable corruption and prohibition on bribery of foreign and local public officials legislation, be that domestic or in any other relevant foreign jurisdiction, and includes, inter alia, various educational and professional training which specifically addresses the topic of compliance, and the enforcement and prevention of acts of corruption or bribery of public officials.

The fact that the Company has ultimately concluded the deferred agreements which span two separate jurisdictions and includes a payment of an overall fine of approximately USD 541 million is edifying, not least in respect of the following two aspects in corporate prevention of corruption and bribery of foreign officials. Firstly, it is important to notice the central role deferred judgment agreements play in respect of the enforcement efforts to combat corruption and bribery of foreign public officials, as well as the considerable relief such agreements offer to the corporation involved. While such corporation must admit to the specific facts at hand, and indeed pay a certain fine, the agreement nevertheless settles criminal and civil charges without the indictment of such corporation, charges which could have otherwise resulted in a much more severe and costly penalty. Secondly, it is hard to overemphasize the importance of drafting and properly implementing a comprehensive and adequate corporate compliance program which is specifically tailored to prevent those occurrences amounting to corruption and bribery of foreign officials, be those made by the corporation itself or by any other entity or individual acting on its behalf, around the globe. We therefore highly recommended that any globally active or minded company adopt an appropriate compliance program to ensure it has done all that is legally required of it to prevent corruption and in order to protect such company, its managers and employees