The U.S. Securities & Exchange Commission closed its review of Medtronic’s sales to strife-torn Syria and Sudan and to Cuba, which the medical device company said are made on a humanitarian basis and amount to a small fraction of its total business.
The SEC asked Medtronic in January to explain its business contacts in the 3 nations, which are flagged as state sponsors of terrorism and are subject to U.S. economic sanctions and assets controls.
Medtronic said its sales to the countries in fiscal 2013 amounted to about $3 million, or just 0.2% of total sales, and were made on a humanitarian basis.
"We believe the various products we sell in these countries are strictly used for medical purposes and do not have an alternative use. In light of the humanitarian nature of our products and the patient community that benefits from our products, we do not believe that these operations have materially affected our reputation or share value or that they constitute a material investment risk to our security holders," Medtronic said.
The Minneapolis-based medtech giant told the SEC in a regulatory filing that it mostly sells cardiac rhythm management and cardiovascular products to MediCuba, Cuba’s government-run medical products distributor. Sales in Cuba were roughly $1.1 million in fiscal 2013 and ran to $1.7 million through Jan. 24, Medtronic said. Other than training sessions for Cuban medical personnel and dealings with its distributor for Cuba, Medtronic said it has "no dealings with the government of Cuba, or with entities controlled by or affiliated with the Cuban government."
Sales of Medtronic’s CRM, cardiovascular, diabetes, spine and surgical devices to distributors and purchasers in Sudan, which then sell them to Sudanese hospitals, were $442,462 in fiscal 2013 and $680,172 through Jan. 24, the company said.
In Syria, Medtronic said it sells CRM, cardiovascular, spine, physio and surgical devices to distributors who then sell them to hospitals. Sales in Syria were $1,5 million in fiscal 2013 and $440,102 through Jan. 24, according to the filing.
In both Sudan and Syria, Medtronic said its contacts were limited to dealings with its distributors in those countries "related to processing of orders and providing technical training relating to certain Medtronic products." The sales are made via Medtronic’s European Operations Center in Heerlen, The Netherlands, according to the filing.