LATAM Airlines To Pay Fines Over Bribes Case

LATAM Airlines has agreed to pay more than USD$22 million in civil and criminal fines relating to a decade-old bribery case, the US SEC said.

The Securities and Exchange Commission said the fine of LATAM unit LAN related to "improper payments it authorised during a dispute between the airline and its union employees in Argentina".

The payments date back to 2006/2007, the company said in a separate statement, predating Chile-based LAN's 2012 merger with Brazil's TAM.

LAN had used an Argentine consultant to negotiate with unions on the company's behalf and paid the consultant via a sham contract that channeled funds to corrupt union officials, the SEC said.

The scheme had violated the accounting provisions of the Foreign Corrupt Practices Act, the US Justice Department said. The airline agreed to pay a USD$12.75 million criminal penalty.

It will pay a further USD$9.4 million, including interest, to settle the SEC's charges of inadequate accounting controls.

In February, Ignacio Cueto, now LAN's chief executive, was ordered to pay a USD$75,000 fine over the same case. A member of the airline's controlling Cueto family, he was LAN chief operating officer at the time.

LATAM Airlines said it "has cooperated fully with relevant authorities throughout this process," adding that "significant improvements" had been made to compliance and internal accounting since the events.