Chiquita to pay $25M to settle terrorism claims

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Chiquita Brands International, Inc. has reached a plea agreement with the US Justice Department to settle claims that Chiquita paid approximately $1.7 million to a Colombian terrorist group between 1997 and 2004 to protect banana harvesting operations in Colombia, according to a criminal information filed by the DOJ in federal court Wednesday. Chiquita itself released an SEC filing Wednesday, which states, in part:

On March 14, 2007, Chiquita Brands International, Inc. ("the Company") entered into a plea agreement with the United States Attorney's Office for the District of Colombia and the National Security Division of the U.S. Department of Justice (together, the "government") relating to the previously disclosed investigation by the government into payments made by the Company's former banana-producing subsidiary in Colombia to certain groups designated under U.S. law as foreign terrorist organizations. Chiquita voluntarily disclosed the payments to the government in April 2003. Under the terms of the agreement, the Company will plead guilty to one count of Engaging in Transactions with a Specially-Designated Global Terrorist, and will pay a fine of $25 million, payable in five equal annual installments, with interest. The Company also will continue to cooperate with the government in any continuing investigation into the matter. As previously disclosed, the Company had recorded a reserve in 2006 of the full $25 million fine amount in anticipation of reaching a settlement with the government.

The agreement is subject to approval and acceptance by the United States District Court for the District of Columbia.

The payments were made to the United Self-Defense Forces (AUC) of Colombia, which in September 2001 was designated as a terrorist organization by the US government.

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