The company along with three subsidiaries pleads guilty to Foreign Corrupt Practices Act violations

German engineering giant, Siemens AG, and three of its subsidiaries pleaded guilty to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a record total of $1.6bn to American and European authorities.

On the American side, Siemens AG paid $450m to the Justice Department and $350m to the Securities and Exchange Commission.

The combined US penalties make this the largest monetary sanction ever imposed in an FCPA case since the act was passed by Congress in 1977.

According to the court filings, beginning in the mid-1990s Siemens AG engaged in systematic efforts to falsify its corporate books and records and knowingly failed to implement and circumvent existing internal controls.

As a result of this, over a six year period Siemens AG made payments totalling around $1.36bn for various dubious reasons. About $800m of this was to bribe foreign officials.

The bribes included kickbacks to the Iraqi government to secure contracts with the Ministries of Electricity and Oil, and illegal payments to Argentine, Venezuelan and Bangladeshi officials to secure favourable treatment on national infrastructure projects.

“Bribery was nothing less than standard operating procedure for Siemens.

‘Today’s filings make clear that for much of its operations across the globe, bribery was nothing less than standard operating procedure for Siemens,’ said Acting Assistant Attorney General Matthew Friedrich.

Linda Chatman Thomsen, director of the SEC's Division of Enforcement added: ‘This pattern of bribery by Siemens was unprecedented in scale and geographic reach. The corruption involved more than $1.4bn in bribes to government officials in Asia , Africa , Europe , the Middle East and the Americas.’

The German giant also reached a settlement with the Munich Public Prosecutor’s Office for failing to supervise its officers and employees. The firm agreed to pay €395m ($570m). That figure is in addition to $290m levied by a Munich court in October last year.

The Foreign Corrupt Practices Act makes it a federal crime for US citizens and companies traded on US markets to pay bribes in return for business.

Siemens AG and its subsidiaries disclosed the violations after initiating an internal investigation.