In re KINROSS GOLD CORPORATION

UNITED STATES OF AMERICA 
Before the  
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 82946 / March 26, 2018 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No.
 3930 / March 26, 2018 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-18407 
 
In the Matter of 
KINROSS GOLD CORPORATION, 
 Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT 
TO SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST 
ORDER 
 
I.  
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (the “Exchange Act”) against Kinross Gold Corporation 
(“Kinross” or “Respondent”).  
II.  
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 
III.  
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
                                                           
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding.
 

 
2 
 
Summary 
 
1. This matter concerns violations of the books and records and internal accounting 
controls provisions of the Foreign Corrupt Practices Act of 1977 (“FCPA”) by Kinross Gold 
Corporation, a gold mining company.  From September 2010 through at least 2014, Kinross 
operated gold mines in Mauritania and Ghana without devising and maintaining a system of 
internal accounting controls sufficient to provide reasonable assurances that transactions were 
executed in accordance with management’s specific or general authorization.  As a result, 
Kinross paid vendors and consultants, often in connection with government interactions, without 
reasonable assurances that transactions were consistent with their stated purpose or the 
prohibition against making improper payments to government officials.  For certain of these 
transactions, the company used petty cash to pay consultants which it then failed to accurately 
and fairly describe in its books and records.  
 
2. In 2014, Kinross also failed to maintain its internal accounting controls around 
contracting and awarded a lucrative logistics contract to a company preferred by government 
officials without following its own bidding and tendering procedures.   Internal documentation 
provided incomplete information concerning the contract award.  Additionally, Kinross 
contracted with a politically-well-connected third-party consultant to facilitate contacts with 
high-level government officials without conducting the heightened due diligence required by the 
company’s policies and procedures.      
 
Respondent 
 
3. Kinross Gold Corporation (“Kinross”) is a Canadian gold mining company.  
Founded in 1993, the company conducts development and mining operations in North and South 
America, West Africa, and Russia.  Kinross is headquartered in Toronto, Canada.  During the 
relevant time period, its common stock was registered with the Commission pursuant to Section 
12(b) of the Securities Exchange Act of 1934 and listed on the New York Stock Exchange 
(NYSE: KGC) and Toronto Stock Exchange (TSX: K).   
 
Other Relevant Entities 
 
4.        Tasiast Mauritanie Limited S.A. (“Tasiast”) is a wholly-owned indirect  
subsidiary of Kinross.  Tasiast owns and operates the Tasiast mine in the Islamic Republic of 
Mauritania. Throughout the relevant time period, Tasiast’s financial results were included in the 
consolidated financial statements that Kinross filed with the Commission. 
 
5.       Chirano Gold Mines Ltd. (Chirano) is a 90 percent-owned indirect subsidiary of 
Kinross.  Chirano owns and operates the Chirano mine in Ghana. Throughout the relevant time 
period, Chirano’s financial results were included in the consolidated financial statements that 
Kinross filed with the Commission. 
 
 
 
 

 
3 
 
Facts 
 
Kinross Failed to Timely Implement Sufficient Internal Accounting Controls  
and Remediate Known Issues 
 
6. On September 17, 2010, Kinross acquired Tasiast and Chirano, and their assets 
and mining operations in Mauritania and Ghana from Red Back Mining, Inc. (“Red Back”), a 
Vancouver-based mining company, for approximately $7.1 billion.  Kinross viewed the 
development of the Tasiast mine, which was much larger than Chirano, as key and critical to the 
realization of the value of the transaction.  In the few months prior to the purchase of the mines 
from Red Back, Kinross conducted due diligence on Red Back.  As part of the process, Red Back 
acknowledged that it lacked an anti-corruption compliance program and associated internal 
accounting controls.   
 
7. As part of this initial due diligence, and following the acquisition, Kinross failed 
to timely address the adequacy of the internal accounting controls at Red Back pertaining to the 
procurement and payment of vendors for goods and services or consider the risks of corruption 
associated with the high percentage of vendors that were controlled by government officials or 
their relatives. As a result, Kinross failed to make necessary improvements to Red Back’s 
inadequate controls in a timely manner.  Kinross continued the same practices from Red Back 
that allowed low-level employees to contract with vendors and make payments with petty cash 
without appropriate controls.       
8. In April 2011 Kinross’ internal audit group concluded that the internal accounting 
controls surrounding vendor selection and disbursement for goods and services at Tasiast and 
Chirano were not adequate to meaningfully assess transactions for accuracy or compliance with 
the FCPA.  The internal audit group faulted the Enterprise Resource Planning (“ERP”) 
accounting and disbursements system, which did not “include much detail on the nature of 
disbursements” thus making it “not possible”  to identify suspect payments such as excessive 
rebates and discounts, advance payments, government commissions and unjustified business 
expenses.   While internal audit conducted a manual review, this was still not adequate to 
meaningfully assess transactions for FCPA compliance.  Internal audit also found that the lack of 
contract administration procedures prevented it from adequately reviewing the contracting and 
tendering processes.   
 
9. Despite these findings by the internal audit group, company management failed to 
take immediate action.  Employees in the finance department became increasingly concerned 
about the poor internal accounting controls associated with disbursements in Africa and the 
continued risk of corrupt activities.  These employees suggested internal audits of Chirano and 
Tasiast be repeated so that the internal accounting control issues would be found and then, 
hopefully, prioritized for solution by regional and international management.  In April 2012, 
Kinross’ internal audit group issued a nearly-identical memorandum reaching the same 
conclusions. 
 
10. Internal audit conducted reviews at Chirano in January 2012 and Tasiast in 
February 2012.  The audits found issues requiring significant improvements at both mines.   
 

 
4 
 
A. The mines variously lacked formal site Delegations of Authority by which 
disbursements were approved; lacked formalized procedures for contract approval 
and tendering; and lacked a fully functioning ERP system.  As a result, Kinross relied 
on manual controls to mitigate against any potential control issues, but they did not 
consistently adhere to the manual controls.   
 
B. At Chirano, specific internal accounting controls in key purchasing and disbursement 
areas were adhered to only sporadically.  For instance, for 41% of the disbursement 
sample, the purchase order was dated and created after the invoice was received and, 
for 75% of the sample, there was no contract at all.  At Tasiast, there was a 
widespread lack of adherence to basic internal accounting controls.  For each and 
every of the sampled transactions, there was either no purchase order or the purchase 
order was created after the invoice was received.   
 
C. At both mines, most disbursements were made without approval by the required level 
of signatories, or based on signatures that did not provide adequate detail, such as 
names and positions, to verify whether appropriate approval had been provided.  
Kinross failed to maintain supporting documentation required for disbursements, 
including invoices, purchase orders, and/or good receipts.  Internal audit found 
minimal evidence of a functioning bidding or tendering process. 
 
11. The internal audit reports for the Chirano and Tasiast mines contained 
recommendations for extensive remediation steps.  While management agreed to swiftly 
implement the needed remediation, it failed to follow through on its commitments in a timely 
manner.  As a result, follow-up internal audits indicated that the issues largely remained.  For 
example, 
 
A. At Tasiast, an October 2012 internal audit found no evidence of required bidding or 
tendering for any of the sampled transactions for goods or services and no purchase 
orders or contracts for the vast majority of them.  Fourteen months later, in December 
2013, internal audit reported that of the transactions it reviewed; only 53% possessed 
a contact and 57% had any evidence of bidding and tendering.     
 
B. At Chirano, a July 2013 internal audit found that only 56% of the sampled 
transactions possessed a contract and only 44% showed evidence of being the result 
of required bidding or tendering.  As noted by the internal auditor, “100% of the 
contracts reviewed were awarded directly by the functional area or department,” 
rather than by the procurement department, an indication that the Red Back practice 
of low-level employees awarding contracts without independent accounting control or 
oversight continued nearly three years after Kinross assumed control of the mine.      
 
12. As a result of the known control weaknesses, payments were made for a period of 
years without reasonable assurances that the payments were for their stated purpose or with 
management’s approval.  For example, 
 

 
5 
 
A. Kinross paid a fixed amount to a Ghanaian government customs officer for his 
expenses in traveling to the mine weekly in order to sign papers necessary for the 
transfer of the gold’s title and attendant shipping risk from Kinross to the buyer.  
While the agreement did not provide for it, during 2012 through 2014, personnel at 
Chirano regularly paid the customs officer for weeks in which he did not travel to the 
mine and bore no travel expenses.  
 
B. In 2012, the Ghana Environmental Protection Agency (“Ghana EPA”) delayed 
granting Kinross a mining production permit for a planned mine expansion due to 
unresolved questions about an Environmental Impact Study that Kinross had 
previously submitted with the assistance of a third-party consultant.  The consultant 
organized a public hearing for the community to discuss the planned expansion’s 
impact on infrastructure and employment opportunities.  During the delay of several 
months, Kinross received a $12,000 invoice from the third-party consultant with no 
documentation for services the consultant purportedly provided to Kinross one year 
earlier.  The consultant represented that the amount was based on an oral contract 
between the consultant and the company.  Kinross personnel used petty cash to pay 
the third-party consultant the $12,000 without obtaining any documentation to 
evidence the services were actually provided.  Kinross’ books and records did not 
fairly and accurately reflect in reasonable detail the nature or intended recipients of 
the payment.  About a month after the payment, the Ghana EPA approved the mining 
production permit. 
 
C. From 2012 through 2015, Kinross paid the Ghanaian government fees in connection 
with the issuance of visas and work permits for expatriate personnel.  During this 
same period, Kinross paid a consultant, a former government employee, to expedite 
the process.  With no evidence of actual services being provided, and with no 
reasonably detailed description in the books and records, the consultant was paid 
approximately $1,000 per visa or permit from petty cash.  As a result, the processing 
time for visas and work permits decreased from ten weeks to three weeks.   
 
After Implementing New Internal Accounting Controls,  
Kinross Failed to Maintain Them 
     
13. In 2013, Kinross took steps to enhance internal accounting controls concerning 
the procurement and payment of goods and services designed, in part, to provide reasonable 
assurances that transactions did not violate the FCPA and Kinross’ code of conduct, which 
prohibits providing improper inducements to government officials.  However, on at least two 
occasions in 2014, Kinross failed to maintain these internal accounting controls.  
 
14. The first instance arose in April 2014 as Kinross prepared to award an 
approximately $50 million, three-year logistical support contract to an international shipping 
company.  Consistent with Kinross’ new supply chain policy, Kinross was prepared to award the 
contract to the bidder that offered the lowest price and possessed the best ability to fulfill the 
technical requirements of the contract. Kinross personnel soon learned, however, that a very 
high-level Mauritanian government official was unhappy with Kinross’ choice because the 

 
6 
 
shipper’s local affiliate was controlled by persons allegedly active with the political opposition.  
Kinross also learned that the official preferred another international shipping company whose 
local affiliate recently was acquired by a prominent and influential Mauritanian businessman 
with ties to the official.  
 
15. In July 2014, Kinross regional management in West Africa made a presentation to 
Kinross senior management, that showed that Kinross’ original preferred shipper remained by far 
the best based on cost, technical capabilities, and ability to provide logistical support in both 
Mauritania and Ghana, but its “political affiliations may pose business risk.”  The presentation 
further noted that the shipper associated with the prominent Mauritanian businessman was 
unable to provide support in Ghana, its costs were high and technical capabilities were poor but 
excelled in “political risk” as it was the “preferred option of Gov[ernment] stakeholders.”  After 
the presentation, Kinross management decided to award the approximately $50 million three-
year logistics contract to the shipping company preferred by the high-level government official.     
 
16. In making this decision, Kinross senior management failed to maintain the 
internal accounting controls, which directed that company personnel primarily focus on the 
commercial and technical qualifications of bidders when making awards.  The internal 
accounting controls also required that when multiple bidders met the basic commercial and 
technical qualifications company personnel were to make an “in-depth evaluation” from a list of 
elements, which included compliance with health/safety/environmental standards and liability for 
cost, performance and delay.  The preference of government officials was not among those 
elements.   
 
17. In September 2014 Kinross internal contract award recommendation documents 
did not, in reasonable detail, accurately and fairly reflect the transaction.  As drafted, the award 
documents did not reveal that the primary reason for awarding the contract was to satisfy the 
preference of a high-level government official.   
 
18. The concerns about awarding this contract to a vendor with low technical 
capabilities and high costs were borne out.  After one year, due to its poor performance, Kinross 
refused to grant the shipper associated with the prominent Mauritanian businessman an option to 
renew.  After a subsequent tendering process, Kinross awarded the business to another company 
in accordance with company policy.  
 
19. The second instance also arose in 2014 when an individual Kinross understood 
was well-connected with high-level government officials in Mauritania approached Kinross 
government-relations department personnel and proposed to work for Kinross in a government-
relations capacity.  Specifically, the individual offered to establish a continuing, semi-formal 
liaison relationship between a senior executive at Kinross and a particular government official 
influential with the same high-level government official who had influenced the award of the 
logistical support contract.    Initially, Kinross considered hiring the individual as Government 
Relations Director for Mauritania and conducted the minimal due diligence required for 
prospective employees – checking for an arrest and criminal record.  But because the amount of 
money the individual demanded for his services was excessive for a salaried employee, senior 

 
7 
 
executives in Kinross’ government-relations department retained him as an independent 
consultant.   
 
20. The consulting agreement was treated as a contract for “Corporate, General, and 
Non-Routine Expenditures,” which required “authorization in accordance with [the] procure-to-
pay process set out in Kinross’ Supply Chain Policy . . . .”  The Supply Chain Policy required 
that prospective vendors undergo a due diligence procedure to determine the FCPA risks in using 
the vendor.   Greater due diligence was required where there were higher potential risk 
indicators.  As Kinross’ agent in dealing directly with government officials where known risks of 
corruption existed, Kinross’ internal accounting controls required that the consultant be subjected 
to the company’s highest level of due diligence, necessitating, among other things, a credit 
report, a search of government sanctions and watch lists, a reference check of business partners 
and associates, confidential in-field inquiries about his reputation and an enhanced asset search.  
However, Kinross did not perform the required due diligence on the consultant and, and between 
September 2014 and August 2015, paid the consultant approximately $715,000. 
 
21. Relatedly, Kinross also failed to provide adequate training to its senior decision-
makers, especially in the government relations department, to recognize the corruption risks in 
hiring a consultant to work as a liaison with government officials.     
 
Kinross’ Remediation Efforts 
 
22. Kinross has taken steps to remediate the above-described internal control and 
recordkeeping issues, including conducting audits, generating management remediation plans 
and tracking their progress, implementing a new ERP system to enable finance personnel to 
more effectively track and manage expenditures, and replacing personnel at Tasiast and Chirano.  
Kinross also increased compliance personnel, updated relevant policies and procedures, and 
conducted compliance training.  Kinross terminated the use of the third-party consultant 
described above to obtain visas and work permits and has instituted more formalized controls 
over the use, documentation and approval of petty cash.  Kinross continues to improve its 
internal accounting controls around third-party consultants and vendors, and enhanced FCPA 
training.  Kinross also recently hired a consulting firm to assist it in evaluating its current 
controls for additional enhancements.  Also, Kinross has taken steps to improve training of its 
senior decision-makers, especially in the government-relations department, to recognize the 
corruption risks in hiring a consultant to work as a liaison.  
 
Books and Records and Internal Accounting Controls Violations 
 
23. As a result of the conduct described above, Kinross violated Sections 13(b)(2)(A) 
and (B) of the Exchange Act by failing to devise and maintain internal accounting controls 
sufficient to provide reasonable assurances that transactions at Chirano and Tasiast were 
executed in accordance with management’s general or specific authorization and by failing to 
make and keep certain records which, in reasonable detail, fairly reflected the transactions and 
disposition of assets. 
 
 

 
8 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
A. Pursuant to Section 21C of the Exchange Act, Respondent Kinross cease-and-
desist from committing or causing any violations and any future violations of Sections 
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 
 
B. Respondent shall, within fourteen days of the entry of this Order, pay a civil 
penalty of $950,000 to the Securities and Exchange Commission for transfer to the general fund 
of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is 
not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made 
in one of the following ways: 
 
1)  Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon request; 
 
2)  Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
3)  Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange Commission and 
hand-delivered or mailed to: 
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
 Payment by check or money order must be accompanied by a cover letter identifying Kinross as 
a Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 
letter and check or money order must be sent to Steven A. Susswein, Senior Counsel, Division of 
Enforcement, United States Securities and Exchange Commission, 100 F Street, Northeast, 
Washington, District of Columbia, 20549-5631. 
 
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

 
9 
 
granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 
of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
D.        With respect to its operations in Africa, Respondent undertakes to: 
 
1) Report to the Commission staff periodically during a one-year term, the status of 
its remediation and implementation of compliance measures, particularly as to the 
areas of due diligence on prospective and existing third-party consultants and 
vendors, FCPA training and the testing of relevant controls including the 
collection and analysis of compliance data.  During this period, should 
Respondent discover credible evidence, not already reported to Commission staff, 
that questionable or corrupt payments or questionable or corrupt transfers of value 
may have been offered, promised, paid, or authorized by Respondent, or any 
entity or person acting on behalf of Respondent, or that related false books and 
records have been maintained, Respondent shall promptly report such conduct to 
the Commission staff.  During this one year period, Respondent shall:  (1) 
conduct an initial review and submit an initial report and (2) conduct and prepare 
one follow-up review and report, as described below: Respondent shall submit to 
the Commission staff a written report within 180 calendar days of the entry of this 
Order setting forth a complete description of its FCPA and anti-corruption related 
remediation efforts to date, its proposals reasonably designed to improve the 
policies and procedures of Respondent for ensuring compliance with the FCPA 
and other applicable anticorruption laws, and the parameters of the subsequent 
review (the “Initial Report”).  The Initial Report shall be transmitted to Steven A. 
Susswein, Senior Counsel, United States Securities and Exchange Commission, 
100 F Street, Northeast, Washington, District of Columbia, 20549-5631.  
Respondent may extend the time period for issuance of the Initial Report with 
prior written approval of the Commission staff. 
 
a. Respondent shall undertake a follow-up review, incorporating any comments 
provided by the Commission staff on the Initial Report, to further monitor and 
assess whether the policies and procedures of Respondent are reasonably 
designed to detect and prevent violations of the FCPA and other applicable 
anti-corruption laws (the “Follow-Up Report”). 
 
b. The Follow-up Report shall be completed by no later than 180 days after the 
Initial Report.  Respondent may extend the time period for issuance of the 
Follow-up Report with prior written approval of the Commission staff. 
 
c. The periodic reviews and reports submitted by Respondent will likely include 
proprietary, financial, confidential, and competitive business information. 

 
10 
 
Public disclosure of the reports could discourage cooperation, impede pending 
or potential government investigations and thus undermine the objectives of 
the reporting requirement.  For these reasons, among others, the reports and 
the contents thereof are intended to remain and shall remain nonpublic, except 
(a) pursuant to court order, (b) as agreed by the parties in writing, (c) to the 
extent that the Commission staff determines in its sole discretion that 
disclosure would be in furtherance of the Commission’s discharge of its duties 
and responsibilities, or (d) is otherwise required by law.  
 
d. During this one-year period of review, Respondent shall provide its external 
auditors with its annual internal audit plan and reports of the results of internal 
audit procedures and its assessment of its FCPA compliance policies and 
procedures. 
 
e. During the one-year period of review, Respondent shall provide Commission 
staff with any written reports or recommendations provided by Respondent’s 
external auditors in response to Respondent’s annual internal audit plan, 
reports of the results of internal audit procedures, and its assessment of its 
FCPA compliance policies and procedures. 
2) Certify, in writing, compliance with the undertaking(s) set forth above.  The 
certification shall identify the undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests 
for further evidence of compliance, and Respondent agrees to provide such 
evidence.  The certification and supporting material shall be submitted to Steven 
A. Susswein, Senior Counsel, United States Securities and Exchange 
Commission, 100 F Street, Northeast, Washington, District of Columbia, 20549-
5631 no later than sixty (60) days from the date of the completion of the 
undertakings. 
   
 
By the Commission. 
 
 
       Brent J. Fields 
       Secretary 
 
 
 
 

UNITED STATES OF AMERICA 
Before the  

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 
Release No. 82946 / March 26, 2018 

ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3930 / March 26, 2018 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-18407 

 

In the Matter of 

KINROSS GOLD CORPORATION, 

 Respondent. 

 ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT 
TO SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST 
ORDER 

 
I.  

 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (the “Exchange Act”) against Kinross Gold Corporation 
(“Kinross” or “Respondent”).  

II.  
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 

III.  
 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 
 

                                                           
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 



 

2 
 

Summary 
 

1. This matter concerns violations of the books and records and internal accounting 
controls provisions of the Foreign Corrupt Practices Act of 1977 (“FCPA”) by Kinross Gold 
Corporation, a gold mining company.  From September 2010 through at least 2014, Kinross 
operated gold mines in Mauritania and Ghana without devising and maintaining a system of 
internal accounting controls sufficient to provide reasonable assurances that transactions were 
executed in accordance with management’s specific or general authorization.  As a result, 
Kinross paid vendors and consultants, often in connection with government interactions, without 
reasonable assurances that transactions were consistent with their stated purpose or the 
prohibition against making improper payments to government officials.  For certain of these 
transactions, the company used petty cash to pay consultants which it then failed to accurately 
and fairly describe in its books and records.  
 

2. In 2014, Kinross also failed to maintain its internal accounting controls around 
contracting and awarded a lucrative logistics contract to a company preferred by government 
officials without following its own bidding and tendering procedures.   Internal documentation 
provided incomplete information concerning the contract award.  Additionally, Kinross 
contracted with a politically-well-connected third-party consultant to facilitate contacts with 
high-level government officials without conducting the heightened due diligence required by the 
company’s policies and procedures.      
 

Respondent 
 
3. Kinross Gold Corporation (“Kinross”) is a Canadian gold mining company.  

Founded in 1993, the company conducts development and mining operations in North and South 
America, West Africa, and Russia.  Kinross is headquartered in Toronto, Canada.  During the 
relevant time period, its common stock was registered with the Commission pursuant to Section 
12(b) of the Securities Exchange Act of 1934 and listed on the New York Stock Exchange 
(NYSE: KGC) and Toronto Stock Exchange (TSX: K).   
 

Other Relevant Entities 
 

4.        Tasiast Mauritanie Limited S.A. (“Tasiast”) is a wholly-owned indirect  
subsidiary of Kinross.  Tasiast owns and operates the Tasiast mine in the Islamic Republic of 
Mauritania. Throughout the relevant time period, Tasiast’s financial results were included in the 
consolidated financial statements that Kinross filed with the Commission. 
 

5.       Chirano Gold Mines Ltd. (Chirano) is a 90 percent-owned indirect subsidiary of 
Kinross.  Chirano owns and operates the Chirano mine in Ghana. Throughout the relevant time 
period, Chirano’s financial results were included in the consolidated financial statements that 
Kinross filed with the Commission. 
 

 
 
 



 

3 
 

Facts 
 

Kinross Failed to Timely Implement Sufficient Internal Accounting Controls  
and Remediate Known Issues 

 
6. On September 17, 2010, Kinross acquired Tasiast and Chirano, and their assets 

and mining operations in Mauritania and Ghana from Red Back Mining, Inc. (“Red Back”), a 
Vancouver-based mining company, for approximately $7.1 billion.  Kinross viewed the 
development of the Tasiast mine, which was much larger than Chirano, as key and critical to the 
realization of the value of the transaction.  In the few months prior to the purchase of the mines 
from Red Back, Kinross conducted due diligence on Red Back.  As part of the process, Red Back 
acknowledged that it lacked an anti-corruption compliance program and associated internal 
accounting controls.  
 

7. As part of this initial due diligence, and following the acquisition, Kinross failed 
to timely address the adequacy of the internal accounting controls at Red Back pertaining to the 
procurement and payment of vendors for goods and services or consider the risks of corruption 
associated with the high percentage of vendors that were controlled by government officials or 
their relatives. As a result, Kinross failed to make necessary improvements to Red Back’s 
inadequate controls in a timely manner.  Kinross continued the same practices from Red Back 
that allowed low-level employees to contract with vendors and make payments with petty cash 
without appropriate controls.       

8. In April 2011 Kinross’ internal audit group concluded that the internal accounting 
controls surrounding vendor selection and disbursement for goods and services at Tasiast and 
Chirano were not adequate to meaningfully assess transactions for accuracy or compliance with 
the FCPA.  The internal audit group faulted the Enterprise Resource Planning (“ERP”) 
accounting and disbursements system, which did not “include much detail on the nature of 
disbursements” thus making it “not possible”  to identify suspect payments such as excessive 
rebates and discounts, advance payments, government commissions and unjustified business 
expenses.   While internal audit conducted a manual review, this was still not adequate to 
meaningfully assess transactions for FCPA compliance.  Internal audit also found that the lack of 
contract administration procedures prevented it from adequately reviewing the contracting and 
tendering processes.   
 

9. Despite these findings by the internal audit group, company management failed to 
take immediate action.  Employees in the finance department became increasingly concerned 
about the poor internal accounting controls associated with disbursements in Africa and the 
continued risk of corrupt activities.  These employees suggested internal audits of Chirano and 
Tasiast be repeated so that the internal accounting control issues would be found and then, 
hopefully, prioritized for solution by regional and international management.  In April 2012, 
Kinross’ internal audit group issued a nearly-identical memorandum reaching the same 
conclusions. 

 
10. Internal audit conducted reviews at Chirano in January 2012 and Tasiast in 

February 2012.  The audits found issues requiring significant improvements at both mines.   
 



 

4 
 

A. The mines variously lacked formal site Delegations of Authority by which 
disbursements were approved; lacked formalized procedures for contract approval 
and tendering; and lacked a fully functioning ERP system.  As a result, Kinross relied 
on manual controls to mitigate against any potential control issues, but they did not 
consistently adhere to the manual controls.   

 
B. At Chirano, specific internal accounting controls in key purchasing and disbursement 

areas were adhered to only sporadically.  For instance, for 41% of the disbursement 
sample, the purchase order was dated and created after the invoice was received and, 
for 75% of the sample, there was no contract at all.  At Tasiast, there was a 
widespread lack of adherence to basic internal accounting controls.  For each and 
every of the sampled transactions, there was either no purchase order or the purchase 
order was created after the invoice was received.   

 
C. At both mines, most disbursements were made without approval by the required level 

of signatories, or based on signatures that did not provide adequate detail, such as 
names and positions, to verify whether appropriate approval had been provided.  
Kinross failed to maintain supporting documentation required for disbursements, 
including invoices, purchase orders, and/or good receipts.  Internal audit found 
minimal evidence of a functioning bidding or tendering process. 

 
11. The internal audit reports for the Chirano and Tasiast mines contained 

recommendations for extensive remediation steps.  While management agreed to swiftly 
implement the needed remediation, it failed to follow through on its commitments in a timely 
manner.  As a result, follow-up internal audits indicated that the issues largely remained.  For 
example, 

 
A. At Tasiast, an October 2012 internal audit found no evidence of required bidding or 

tendering for any of the sampled transactions for goods or services and no purchase 
orders or contracts for the vast majority of them.  Fourteen months later, in December 
2013, internal audit reported that of the transactions it reviewed; only 53% possessed 
a contact and 57% had any evidence of bidding and tendering.     

 
B. At Chirano, a July 2013 internal audit found that only 56% of the sampled 

transactions possessed a contract and only 44% showed evidence of being the result 
of required bidding or tendering.  As noted by the internal auditor, “100% of the 
contracts reviewed were awarded directly by the functional area or department,” 
rather than by the procurement department, an indication that the Red Back practice 
of low-level employees awarding contracts without independent accounting control or 
oversight continued nearly three years after Kinross assumed control of the mine.      

 
12. As a result of the known control weaknesses, payments were made for a period of 

years without reasonable assurances that the payments were for their stated purpose or with 
management’s approval.  For example, 

 



 

5 
 

A. Kinross paid a fixed amount to a Ghanaian government customs officer for his 
expenses in traveling to the mine weekly in order to sign papers necessary for the 
transfer of the gold’s title and attendant shipping risk from Kinross to the buyer.  
While the agreement did not provide for it, during 2012 through 2014, personnel at 
Chirano regularly paid the customs officer for weeks in which he did not travel to the 
mine and bore no travel expenses.  
 

B. In 2012, the Ghana Environmental Protection Agency (“Ghana EPA”) delayed 
granting Kinross a mining production permit for a planned mine expansion due to 
unresolved questions about an Environmental Impact Study that Kinross had 
previously submitted with the assistance of a third-party consultant.  The consultant 
organized a public hearing for the community to discuss the planned expansion’s 
impact on infrastructure and employment opportunities.  During the delay of several 
months, Kinross received a $12,000 invoice from the third-party consultant with no 
documentation for services the consultant purportedly provided to Kinross one year 
earlier.  The consultant represented that the amount was based on an oral contract 
between the consultant and the company.  Kinross personnel used petty cash to pay 
the third-party consultant the $12,000 without obtaining any documentation to 
evidence the services were actually provided.  Kinross’ books and records did not 
fairly and accurately reflect in reasonable detail the nature or intended recipients of 
the payment.  About a month after the payment, the Ghana EPA approved the mining 
production permit. 

 
C. From 2012 through 2015, Kinross paid the Ghanaian government fees in connection 

with the issuance of visas and work permits for expatriate personnel.  During this 
same period, Kinross paid a consultant, a former government employee, to expedite 
the process.  With no evidence of actual services being provided, and with no 
reasonably detailed description in the books and records, the consultant was paid 
approximately $1,000 per visa or permit from petty cash.  As a result, the processing 
time for visas and work permits decreased from ten weeks to three weeks.   

 
After Implementing New Internal Accounting Controls,  

Kinross Failed to Maintain Them 
     

13. In 2013, Kinross took steps to enhance internal accounting controls concerning 
the procurement and payment of goods and services designed, in part, to provide reasonable 
assurances that transactions did not violate the FCPA and Kinross’ code of conduct, which 
prohibits providing improper inducements to government officials.  However, on at least two 
occasions in 2014, Kinross failed to maintain these internal accounting controls.  

 
14. The first instance arose in April 2014 as Kinross prepared to award an 

approximately $50 million, three-year logistical support contract to an international shipping 
company.  Consistent with Kinross’ new supply chain policy, Kinross was prepared to award the 
contract to the bidder that offered the lowest price and possessed the best ability to fulfill the 
technical requirements of the contract. Kinross personnel soon learned, however, that a very 
high-level Mauritanian government official was unhappy with Kinross’ choice because the 



 

6 
 

shipper’s local affiliate was controlled by persons allegedly active with the political opposition.  
Kinross also learned that the official preferred another international shipping company whose 
local affiliate recently was acquired by a prominent and influential Mauritanian businessman 
with ties to the official.  
 

15. In July 2014, Kinross regional management in West Africa made a presentation to 
Kinross senior management, that showed that Kinross’ original preferred shipper remained by far 
the best based on cost, technical capabilities, and ability to provide logistical support in both 
Mauritania and Ghana, but its “political affiliations may pose business risk.”  The presentation 
further noted that the shipper associated with the prominent Mauritanian businessman was 
unable to provide support in Ghana, its costs were high and technical capabilities were poor but 
excelled in “political risk” as it was the “preferred option of Gov[ernment] stakeholders.”  After 
the presentation, Kinross management decided to award the approximately $50 million three-
year logistics contract to the shipping company preferred by the high-level government official.     
 

16. In making this decision, Kinross senior management failed to maintain the 
internal accounting controls, which directed that company personnel primarily focus on the 
commercial and technical qualifications of bidders when making awards.  The internal 
accounting controls also required that when multiple bidders met the basic commercial and 
technical qualifications company personnel were to make an “in-depth evaluation” from a list of 
elements, which included compliance with health/safety/environmental standards and liability for 
cost, performance and delay.  The preference of government officials was not among those 
elements.   
 

17. In September 2014 Kinross internal contract award recommendation documents 
did not, in reasonable detail, accurately and fairly reflect the transaction.  As drafted, the award 
documents did not reveal that the primary reason for awarding the contract was to satisfy the 
preference of a high-level government official.   
 

18. The concerns about awarding this contract to a vendor with low technical 
capabilities and high costs were borne out.  After one year, due to its poor performance, Kinross 
refused to grant the shipper associated with the prominent Mauritanian businessman an option to 
renew.  After a subsequent tendering process, Kinross awarded the business to another company 
in accordance with company policy.  
 

19. The second instance also arose in 2014 when an individual Kinross understood 
was well-connected with high-level government officials in Mauritania approached Kinross 
government-relations department personnel and proposed to work for Kinross in a government-
relations capacity.  Specifically, the individual offered to establish a continuing, semi-formal 
liaison relationship between a senior executive at Kinross and a particular government official 
influential with the same high-level government official who had influenced the award of the 
logistical support contract.  Initially, Kinross considered hiring the individual as Government 
Relations Director for Mauritania and conducted the minimal due diligence required for 
prospective employees – checking for an arrest and criminal record.  But because the amount of 
money the individual demanded for his services was excessive for a salaried employee, senior 



 

7 
 

executives in Kinross’ government-relations department retained him as an independent 
consultant.   
 

20. The consulting agreement was treated as a contract for “Corporate, General, and 
Non-Routine Expenditures,” which required “authorization in accordance with [the] procure-to-
pay process set out in Kinross’ Supply Chain Policy . . . .”  The Supply Chain Policy required 
that prospective vendors undergo a due diligence procedure to determine the FCPA risks in using 
the vendor.   Greater due diligence was required where there were higher potential risk 
indicators.  As Kinross’ agent in dealing directly with government officials where known risks of 
corruption existed, Kinross’ internal accounting controls required that the consultant be subjected 
to the company’s highest level of due diligence, necessitating, among other things, a credit 
report, a search of government sanctions and watch lists, a reference check of business partners 
and associates, confidential in-field inquiries about his reputation and an enhanced asset search.  
However, Kinross did not perform the required due diligence on the consultant and, and between 
September 2014 and August 2015, paid the consultant approximately $715,000. 

 
21. Relatedly, Kinross also failed to provide adequate training to its senior decision-

makers, especially in the government relations department, to recognize the corruption risks in 
hiring a consultant to work as a liaison with government officials.     
 

Kinross’ Remediation Efforts 
 

22. Kinross has taken steps to remediate the above-described internal control and 
recordkeeping issues, including conducting audits, generating management remediation plans 
and tracking their progress, implementing a new ERP system to enable finance personnel to 
more effectively track and manage expenditures, and replacing personnel at Tasiast and Chirano.  
Kinross also increased compliance personnel, updated relevant policies and procedures, and 
conducted compliance training.  Kinross terminated the use of the third-party consultant 
described above to obtain visas and work permits and has instituted more formalized controls 
over the use, documentation and approval of petty cash.  Kinross continues to improve its 
internal accounting controls around third-party consultants and vendors, and enhanced FCPA 
training.  Kinross also recently hired a consulting firm to assist it in evaluating its current 
controls for additional enhancements.  Also, Kinross has taken steps to improve training of its 
senior decision-makers, especially in the government-relations department, to recognize the 
corruption risks in hiring a consultant to work as a liaison.  
 

Books and Records and Internal Accounting Controls Violations 
 
23. As a result of the conduct described above, Kinross violated Sections 13(b)(2)(A) 

and (B) of the Exchange Act by failing to devise and maintain internal accounting controls 
sufficient to provide reasonable assurances that transactions at Chirano and Tasiast were 
executed in accordance with management’s general or specific authorization and by failing to 
make and keep certain records which, in reasonable detail, fairly reflected the transactions and 
disposition of assets. 
 

 



 

8 
 

IV. 
 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 

A. Pursuant to Section 21C of the Exchange Act, Respondent Kinross cease-and-
desist from committing or causing any violations and any future violations of Sections 
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 

 
B. Respondent shall, within fourteen days of the entry of this Order, pay a civil 

penalty of $950,000 to the Securities and Exchange Commission for transfer to the general fund 
of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is 
not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made 
in one of the following ways: 
 

1)  Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon request; 

 
2)  Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
3)  Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange Commission and 
hand-delivered or mailed to: 
 

Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 

 
 Payment by check or money order must be accompanied by a cover letter identifying Kinross as 

a Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 
letter and check or money order must be sent to Steven A. Susswein, Senior Counsel, Division of 
Enforcement, United States Securities and Exchange Commission, 100 F Street, Northeast, 
Washington, District of Columbia, 20549-5631. 
 

C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 



 

9 
 

granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 
of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 

D.        With respect to its operations in Africa, Respondent undertakes to: 
 

1) Report to the Commission staff periodically during a one-year term, the status of 
its remediation and implementation of compliance measures, particularly as to the 
areas of due diligence on prospective and existing third-party consultants and 
vendors, FCPA training and the testing of relevant controls including the 
collection and analysis of compliance data.  During this period, should 
Respondent discover credible evidence, not already reported to Commission staff, 
that questionable or corrupt payments or questionable or corrupt transfers of value 
may have been offered, promised, paid, or authorized by Respondent, or any 
entity or person acting on behalf of Respondent, or that related false books and 
records have been maintained, Respondent shall promptly report such conduct to 
the Commission staff.  During this one year period, Respondent shall:  (1) 
conduct an initial review and submit an initial report and (2) conduct and prepare 
one follow-up review and report, as described below: Respondent shall submit to 
the Commission staff a written report within 180 calendar days of the entry of this 
Order setting forth a complete description of its FCPA and anti-corruption related 
remediation efforts to date, its proposals reasonably designed to improve the 
policies and procedures of Respondent for ensuring compliance with the FCPA 
and other applicable anticorruption laws, and the parameters of the subsequent 
review (the “Initial Report”).  The Initial Report shall be transmitted to Steven A. 
Susswein, Senior Counsel, United States Securities and Exchange Commission, 
100 F Street, Northeast, Washington, District of Columbia, 20549-5631.  
Respondent may extend the time period for issuance of the Initial Report with 
prior written approval of the Commission staff. 
 
a. Respondent shall undertake a follow-up review, incorporating any comments 

provided by the Commission staff on the Initial Report, to further monitor and 
assess whether the policies and procedures of Respondent are reasonably 
designed to detect and prevent violations of the FCPA and other applicable 
anti-corruption laws (the “Follow-Up Report”). 

 
b. The Follow-up Report shall be completed by no later than 180 days after the 

Initial Report.  Respondent may extend the time period for issuance of the 
Follow-up Report with prior written approval of the Commission staff. 

 
c. The periodic reviews and reports submitted by Respondent will likely include 

proprietary, financial, confidential, and competitive business information. 



 

10 
 

Public disclosure of the reports could discourage cooperation, impede pending 
or potential government investigations and thus undermine the objectives of 
the reporting requirement.  For these reasons, among others, the reports and 
the contents thereof are intended to remain and shall remain nonpublic, except 
(a) pursuant to court order, (b) as agreed by the parties in writing, (c) to the 
extent that the Commission staff determines in its sole discretion that 
disclosure would be in furtherance of the Commission’s discharge of its duties 
and responsibilities, or (d) is otherwise required by law.  

 
d. During this one-year period of review, Respondent shall provide its external 

auditors with its annual internal audit plan and reports of the results of internal 
audit procedures and its assessment of its FCPA compliance policies and 
procedures. 

 
e. During the one-year period of review, Respondent shall provide Commission 

staff with any written reports or recommendations provided by Respondent’s 
external auditors in response to Respondent’s annual internal audit plan, 
reports of the results of internal audit procedures, and its assessment of its 
FCPA compliance policies and procedures. 

2) Certify, in writing, compliance with the undertaking(s) set forth above.  The 
certification shall identify the undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests 
for further evidence of compliance, and Respondent agrees to provide such 
evidence.  The certification and supporting material shall be submitted to Steven 
A. Susswein, Senior Counsel, United States Securities and Exchange 
Commission, 100 F Street, Northeast, Washington, District of Columbia, 20549-
5631 no later than sixty (60) days from the date of the completion of the 
undertakings. 

   
 
By the Commission. 
 
 
       Brent J. Fields 
       Secretary