A subsidiary of the Swiss cement group Holcim has pleaded guilty in a US court to having supported terrorist organizations in previous deals in Syria.

The company is now paying a fine of $778 million for this.

As a result, the procedure is discontinued.

John Knight

Correspondent for politics and economy in Switzerland.

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The case has occupied the courts for many years.

It goes back to the period between 2013 and 2014 and concerns the French company Lafarge SA, which merged with the Swiss Holcim AG in mid-2015 to form the largest cement group in the world.

It was only later that it slowly leaked out that something monstrous had happened in the Lafarge cement factory in Syria east of Aleppo.

The US Department of Justice (DOJ) summarizes the incidents as follows: After the outbreak of the Syrian civil war in 2011, Lafarge and its Syrian subsidiary LCS paid armed groups to continue operating the plant, thereby gaining economic advantages over their competitors in the field achieve Syrian cement market.

Six million terrorists

Altogether, nearly $6 million in illegal payments went to the terrorist organizations Islamic State (IS) and al-Nusrah Front at a time when these organizations were brutally abusing innocent civilians in Syria, Deputy Attorney General Matthew said G. Olsen of the Department of Justice's National Security Division in a press statement.

According to Assistant Attorney General Lisa O. Monaco, this case “sends a clear message to all companies, but especially those operating in high-risk areas, to invest in robust compliance programs while remaining vigilant to national security compliance risks and carry out careful due diligence checks in mergers and acquisitions.” The latter can be seen as a dig at Holcim: The Swiss were later surprised by the reputation-damaging incidents at the company of their merger partner Lafarge – and now have to pay a high price for it.

The former security chief of Lafarge in Syria, Jacob Waerness, had made the events at that time public a few years ago.

In a book, the Norwegian described, among other things, how he handed over a six-figure sum in autumn 2012 to buy the freedom of nine kidnapped employees.

The money was in a plastic bag and may have ended up in the hands of the IS in a roundabout way.

The same applies to protection money and tolls that were paid for raw materials being delivered to the factory and cement products being delivered to customers in the region.

In order to cover up the agreements with the terrorist groups, Lafarge executives insisted that the name "Lafarge" not be mentioned in the documents, the Justice Department writes.

Many of the executives used their private e-mail addresses to hide the plot.

An internal investigation report, parts of which Holcim published in 2017, said that the employees responsible for business in Syria had acted in what they believed to be the best interests of the company.

Moreover, they depended on Lafarge's salaries for their livelihood.

Ultimately, however, the managers misjudged the situation completely and did not sufficiently consider the legal and reputation-damaging effects of their behavior.

The investigation also revealed that the French's controlling had failed: the finance department in Paris failed to record illegal and improper financial flows in Syria.

As the parent company of Lafarge SA, Holcim says it supports the settlement with the DOJ.

The incidents at that time were in complete contrast to the company's own values, the group writes in a statement.

In it, Holcim emphasizes that the executives involved at the time concealed their activities in Syria after the merger, both from Holcim and from external auditors.

With regard to the ongoing proceedings in France regarding the Syrian case, Lafarge states that the authorities continue to cooperate fully.