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US fines Chile-based airline LATAM $US22m

Associated Press Associated Press 26/07/2016

Latin America's largest airline has agreed to some $US22 million ($A29.46 million) in civil and criminal fines in connection with a scheme to pay bribes to end a labour strike in Argentina a decade ago, US authorities say.

Chile-based carrier LATAM will pay $US12.75 million to the US Justice Department and $US9.4 million including interest to the US Securities and Exchange Commission. The penalties stem from an investigation into payments made in 2006-2007 by LAN airlines, which merged with Brazil's TAM in 2012 to create LATAM.

The Justice Department said in a statement that LAN had entered into a "fictitious $US1.15 million consulting agreement with an adviser to the Secretary of Argentina's Ministry of Transportation."

It said no consulting services were ever provided, and instead the money was funnelled to union officials "in exchange for the union agreeing to accept lower wages and to not enforce what would have been a costly labour rule."

LAN was said to have profited by over $US6.7 million thanks to the bribes.

In a separate statement, LATAM acknowledged LAN violated accounting rules of the US Foreign Corrupt Practices Act and said it had agreed to retain an independent compliance monitor for 27 months.

The case falls under US jurisdiction because LATAM's stock is listed on the New York Stock Exchange.

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