Compliance Lessons From DOJ’s First Terrorism-support Prosecution of Foreign Corporations

A French building materials manufacturer and its Syrian subsidiary made history last week week by pleading guilty to federal terrorism charges after a long-running investigation led by DOJ’s National Security Division.  This is the first ever criminal prosecution of a company for conspiring to provide material support to a foreign terrorist organization (“FTO”) in violation of U.S. law. The companies were immediately sentenced to terms of probation and penalties totaling nearly $800 million.  The details reveal significant potential lessons for companies doing business is certain regions of the world.

According to the plea documents, the two defendants, Lafarge, and Lafarge Cement Syria (“LCS”) conspired to pay two FTO’s, the Islamic State of Iraq and al-Sham (“ISIS”) and the al-Nusrah Front (“ANF”), for permission to operate a cement plant in Syria during 2013 and 2014.  The defendants opened the plant in May of 2010 at a cost of approximately $680 million and operated it until September of 2014. After the start of the Syrian Civil War in 2011, the companies paid armed factions in the war, including ISIS and ANF, a total of nearly $6 million to ensure continued operation of the plant, protect plant employees, and obtain economic advantage over their competitors in the region.  These payments violated 18 U.S.C. § 2339B(a)(1).  By late 2014, the situation in Syria became increasingly dangerous and LCS evacuated its plant there.

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