<SEC-DOCUMENT>0001193125-17-148815.txt : 20170608
<SEC-HEADER>0001193125-17-148815.hdr.sgml : 20170608
<ACCEPTANCE-DATETIME>20170428171503
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ACCESSION NUMBER:		0001193125-17-148815
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20170428

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BAXTER INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000010456
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				360781620
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		ONE BAXTER PKWY
		STREET 2:		DF2-1W
		CITY:			DEERFIELD
		STATE:			IL
		ZIP:			60015
		BUSINESS PHONE:		8479482000

	MAIL ADDRESS:	
		STREET 1:		ONE BAXTER PARKWAY
		STREET 2:		DF2-1W
		CITY:			DEERFIELD
		STATE:			IL
		ZIP:			60015

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BAXTER TRAVENOL LABORATORIES INC
		DATE OF NAME CHANGE:	19880522

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BAXTER LABORATORIES INC
		DATE OF NAME CHANGE:	19760608
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<TYPE>CORRESP
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">April&nbsp;28, 2017 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR</U> </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission
</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, DC 20549 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Cecilia Blye, Office of Global
Security Risk </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"><B>Re:</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"><B>Baxter International Inc.</B></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2016</B></TD></TR>
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<TD VALIGN="bottom"><B>Filed February&nbsp;23, 2017</B></TD></TR>
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<TD VALIGN="bottom"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-04448</FONT></B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Blye: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We submit
this letter in response to comments from the Staff of the Division of Corporation Finance (the &#147;<U>Staff</U>&#148;) of the Securities and Exchange Commission (the &#147;<U>Commission</U>&#148;), received by letter dated March&nbsp;31, 2017
relating to the Form <FONT STYLE="white-space:nowrap">10-K</FONT> of Baxter International Inc. (&#147;<U>we</U>&#148;, &#147;<U>us</U>&#148;, &#147;<U>our</U>&#148; or the &#147;<U>Company</U>&#148;) for the fiscal year ended December&nbsp;31,
2016.&nbsp;&nbsp;&nbsp;&nbsp;The March&nbsp;31, 2017 letter is the first follow up correspondence we received from the Staff after submitting a letter in response to a similar Staff inquiry in October 2014. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Set forth below is the Staff&#146;s comment followed by our response, which is numbered to correspond with the number set forth in the Staff&#146;s comment
letter. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">1.&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">You stated in your letter to us dated November&nbsp;25, 2014 that you sold products to Sudan and Syria, countries which are designated by the State Department as state sponsors of terrorism, and are subject to U.S.
economic sanctions and export controls. Your Form <FONT STYLE="white-space:nowrap">10-K</FONT> does not describe your business with those countries. Please describe to us the nature and extent of your past, current and anticipated contacts with
Sudan and Syria since the referenced letter, whether through subsidiaries, distributors, sales agents or other direct or indirect arrangements. You should describe any goods, technology or services you have provided into Sudan and Syria, directly or
indirectly, and any agreements, arrangements or other contacts you have had with the governments of those countries or entities they control. </TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response</U>: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company, through its subsidiaries,
develops, manufactures and markets products that save and sustain the lives of people with kidney disease, trauma and other chronic and acute medical conditions. A description of the Company&#146;s business dealings with Sudan and Syria is provided
below.&nbsp;&nbsp;&nbsp;&nbsp; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the Company donates lifesaving and sustaining medical products through its humanitarian aid partners, and
such products have been sent through these partners to both Sudan and Syria. The Company donated product valued at approximately $135,000 for distribution in Syria and Sudan between 2014 and 2016. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cecilia Blye </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Sudan </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company sells a range of life saving and sustaining medical products to Sudan, including anesthetics, dialysis equipment and solutions, IV sets and
accessories, and nutritional products. Such sales are made primarily by two foreign subsidiaries, Baxter A.G., a Swiss entity, operating through its Dubai office, and Gambro A.B., a Swedish entity, to or through distributors who sell the products to
Central Medical Supplies (&#147;<U>CMS</U>&#148;), the Sudanese government-owned provider of medical products in Sudan. Total sales by the Company for distribution in Sudan in 2014, 2015 and 2016 were approximately $8.8&nbsp;million,
$6.6&nbsp;million and $6.0&nbsp;million, respectively, and for the three-month period ended March&nbsp;31, 2017 were approximately $300,000. The Company also engages in support activities related to its indirect sales in Sudan, including order
processing, promotional and marketing assistance and education, carried out by employees of Baxter A.G. and Gambro A.B. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company believes that the
sales and support activities described above were carried out in accordance with applicable laws and regulations, including the terms and conditions of individual export licenses obtained by the Company from the Office of Foreign Assets Control.
</P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Syria </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company sells a limited portfolio of life
saving and sustaining medical products to Syria, primarily oncology medicine and dialysis equipment and solutions. These sales are made by two subsidiaries, Baxter A.G. and Gambro A.B., to distributors who sell the products to <FONT
STYLE="white-space:nowrap">end-users</FONT> in Syria. The Company also sells product to the World Health Organization for use in relief efforts in Syria. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Total sales by the Company to Syria in 2014, 2015 and 2016 were approximately $870,000, $240,000 and $350,000, respectively, and for the three-month period
ended March&nbsp;31, 2017 were approximately $35,000. The Company also engages in support activities related to its sales in Syria, including order processing, promotional and marketing assistance, and education carried out by employees of Baxter
A.G. and Gambro A.B. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company believes that the sales and support activities described above were carried out in accordance with applicable laws and
regulations. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cecilia Blye </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">2.</TD>
<TD ALIGN="left" VALIGN="top">Please discuss the materiality of any contacts with Sudan and Syria you describe in response to the comment above, and whether the contacts constitute a material investment risk for your security holders. You should
address materiality in quantitative terms, including the approximate dollar amounts of any revenues, assets and liabilities associated with Sudan and Syria for the last three fiscal years and the subsequent interim period. Also, address materiality
in terms of qualitative factors that a reasonable investor would deem important in making an investment decision, including the potential impact of corporate activities upon a company&#146;s reputation and share value. As you know, various state and
municipal governments, universities and other investors have proposed or adopted divestment or similar initiatives regarding investment in companies that do business with U.S.-designated state sponsors of terrorism. You should address the potential
impact of the investor sentiment evidenced by such actions directed toward companies that have operations associated with Sudan and Syria. </TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response</U>: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Based on an assessment of both
quantitative and qualitative factors, the Company believes that our activities in Sudan and Syria are not material to the Company and do not constitute a material investment risk. In assessing materiality of such activities, we considered
materiality based on quantitative factors as well as qualitative factors that a reasonable investor would deem important in making an investment decision in the Company&#146;s securities, including the potential impact on the Company&#146;s
reputation and share value. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We refer the Staff to our response to Comment No.&nbsp;1 for a description of the Company&#146;s sales in each named country
during each of the past three years. In the aggregate, the Company&#146;s total sales to (or for distribution within) Sudan and Syria for each of the past three years totaled approximately $9.7&nbsp;million, $6.9&nbsp;million and $6.4&nbsp;million
in 2014, 2015 and 2016 respectively, and were approximately $335,000 for the three-month period ended March&nbsp;31, 2017. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company&#146;s total net
sales (after adjusted for the June 2015 <FONT STYLE="white-space:nowrap">spin-off</FONT> of Baxalta Incorporated) were approximately $10.7&nbsp;billion in 2014, $10.0&nbsp;billion in 2015, $10.2&nbsp;billion in 2016 and $2.5&nbsp;billion in the
quarter ended March&nbsp;31, 2016. As such, the Company&#146;s sales to Sudan and Syria, individually and in the aggregate, accounted for less than <FONT STYLE="white-space:nowrap">one-tenth</FONT> of one percent of the Company&#146;s total sales in
each of these periods. Therefore, we believe that our activities and contacts in those countries are quantitatively immaterial to our investors, our business and our financial condition. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, to the extent that the following qualitative factors may be suggested to impact an analysis of materiality, we believe that our activities in
Sudan and Syria are not material to our investors, our business, or our financial condition. We believe that our business and humanitarian efforts in these markets are conducted in compliance with applicable U.S. and local laws, which
</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cecilia Blye </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">have been enacted to ensure that all people, regardless of the actions of their governments, have access to
essential medical treatment. The Company maintains a trade compliance program, supported by resources from internal legal and supply chain departments and external legal counsel, to ensure the Company&#146;s compliance with applicable economic
sanctions regulations and laws administrated by OFAC and BIS, including the terms and conditions of general and specific export licenses that may be required to conduct business in these markets. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company is aware of legislation and guidelines that have been adopted by certain states and organizations permitting or requiring divestment from, or
reporting of interests in, companies that do business with certain U.S.-designated state sponsors of terrorism. We do not believe that such legislation has, to date, had a material impact on our reputation or share value. The Company will continue
to monitor the status of such legislation, as well as legislation proposed but not yet enacted, and whether it may have any material impact on us and our investors. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the Company acknowledges that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company is responsible for the adequacy and accuracy of the disclosure in its filings with the Commission; </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
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<TD ALIGN="left" VALIGN="top">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Company&#146;s filings; and </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
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<TD ALIGN="left" VALIGN="top">the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If you have any questions or require any further information regarding this matter, please contact the undersigned at
<FONT STYLE="white-space:nowrap">(224)&nbsp;948-3086.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="bottom">Very truly yours,</TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Ellen K. McIntosh</P></TD></TR>
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<TD VALIGN="bottom">Ellen K. McIntosh</TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Corporate Vice President, Associate</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">General
Counsel&nbsp;&amp; Corporate</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Secretary</P></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Baxter International Inc.</TD></TR>
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