Local authorities silent on Avon case

Direct-sales giant Avon Products Inc reached a settlement with the US Securities and Exchange Commission (SEC) Wednesday. Avon admitted to violating the Foreign Corrupt Practices Act (FCPA) and agreed to pay a total of $135 million in criminal fines and civil settlement fees.

Avon had been accused of bribing Chinese officials to help it acquire a direct-sales license, avoid tax-evasion penalties and suppress negative coverage by State-run media.

Back in 2008, Chinese staff members blew the whistle on such tactics to Avon headquarters. These allegations resulted in an internal company investigation, followed by an external investigation by the SEC.

Inaction on the part of Chinese judicial authorities in this matter is something of a disappointment though, especially since it has been six years since Avon was first accused of wrongdoing. The public still does not know which officials were bribed by Avon.

Similarly, Chinese authorities have never confirmed or denied whether Avon was able to erase negative media reports. Chinese consumers have also received no compensation, even though Avon has impaired the interests of local shoppers and enterprises. Authorities in China should follow up on the clues exposed by the SEC and impose similar punishments on Avon.