TechnipFMC pays $301.3M to settle Brazil bribery case

Oilfield services company TechnipFMC has agreed to pay $301.3 million to the U.S. and Brazilian authorities to resolve anti-corruption investigations in Brazil and relating to the intermediary, Unaoil for bribery paid to Brazilian officials in exchange for contracts.

Illustration; Rio de Janeiro – Image by David Mark from Pixabay

TechnipFMC has agreed to resolutions with the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC) Staff and the Brazilian authorities (the Federal Prosecution Service (MPF), the Comptroller General of Brazil (CGU), and the Attorney General of Brazil (AGU)).

As part of this resolution, TechnipFMC entered into a three-year Deferred Prosecution Agreement (DPA) with the DOJ related to charges of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) related to conduct in Brazil and with Unaoil.

In addition, Technip USA, Inc., a U.S. subsidiary, pled guilty to one count of conspiracy to violate the FCPA related to conduct in Brazil. The Company will also provide the DOJ reports on its anti-corruption program during the term of the DPA.

According to the U.S. Department of Justice, the charges arose out of two independent bribery schemes:  a scheme by Technip to pay bribes to Brazilian officials and a scheme by FMC to pay bribes to officials in Iraq. Technip and FMC merged into TechnipFMC in January 2017. In 2010, Technip entered into a $240 million resolution with the Department of Justice over bribes paid in Nigeria.

 

Bribery paid to Brazilian officials in exchange for Petrobras contract

 

According to admissions and court documents, the DOJ statement on Tuesday reveals, in at least 2003 and continuing until at least 2013, “Technip conspired with others, including Singapore-based Keppel Offshore & Marine Ltd. (KOM) and their former consultant, to violate the FCPA by making more than $69 million in corrupt payments and “commission payments” to the consultant, companies associated with the consultant and others, who passed along portions of these payments as bribes to Brazilian government officials who were employees at the Brazilian state-owned oil company, Petrobras, in order to secure improper business advantages and obtaining and retaining business with Petrobras for Technip, Technip USA and Joint Venture.

In addition, the DOJ said, Technip made more than $6 million in corrupt payments to the Workers’ Party in Brazil and Workers’ party officials in furtherance of the bribery scheme.

Also, according to the DOJ, beginning by at least 2008 and continuing until at least 2013, FMC conspired to violate the FCPA by paying bribes to at least seven government officials in Iraq, including officials at the Ministry of Oil, the South Oil Company and the Missan Oil Company, through a Monaco-based intermediary company in order to win secure improper business advantages and to influence those foreign officials to obtain and retain business for FMC Technologies in Iraq.

TechnipFMC has agreed to pay a total of $301.3 million to these authorities to resolve investigations into by former employees’ conduct dating back over a decade ago, TechnipFMC said on Tuesday.

“TechnipFMC fully cooperated with these authorities, and this is the first simultaneous resolution to include all U.S. and Brazilian authorities. TechnipFMC will not be required to have a monitor and will, instead, provide reports on its anti-corruption program to the Brazilian and U.S. authorities for two and three years, respectively,” TechnipFMC said.

U.S. Attorney Donoghue said: “Today’s resolutions are the result of a continuing multinational effort to hold accountable corporations and individuals who seek to win business through corrupt payments to foreign officials, and who attempt to use the U.S. financial system to carry out those crimes. We will continue to prioritize identifying and bringing to justice those who would corrupt the legitimate functions of government for personal financial gain.”

DOJ Assistant Director Johnson said: “In attempting to cheat the system, Technip violated the FCPA. Through the collaboration and dedicated efforts of the FBI and our foreign partners, Technip is being held accountable for perpetrating illegal schemes and justice is served.”

Former employees to blame

 

 

“Today we announce the resolution of these investigations. This conduct dating back over a decade ago, taken by former employees, does not reflect the core values of our Company today,” TechnipFMC CEO said.

Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated: “Today we announce the resolution of these investigations. This conduct dating back over a decade ago, taken by former employees, does not reflect the core values of our Company today. We are committed to doing business the right way, and that means operating with integrity everywhere.

“Our strong compliance program supports this commitment, and we will continue to enhance our program to ensure that our employees have the practical tools and resources to do business the right way. We will remain focused on rewarding the trust that our clients have put in TechnipFMC by delivering industry-leading innovation, superior client service, and exceptional project execution.”

In Brazil, TechnipFMC subsidiaries Technip Brasil – Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU related to conduct in Brazil dating back over a decade ago. The Company has committed, as part of those agreements, to make certain enhancements to their compliance programs in Brazil during a two-year self-reporting period, which aligns with its commitment to cooperation and transparency with the compliance community in Brazil and globally, TechnipFMC said.

Additionally, TechnipFMC has reached an agreement in principle with the SEC Staff, subject to final SEC approval, the oilfield services provider said.

TechnipFMC has also said it been cooperating with an investigation by the French Parquet National Financier (PNF) related to historical projects in Equatorial Guinea and Ghana.

“To date, this investigation has not reached resolution. TechnipFMC remains committed to finding a resolution with the PNF and will maintain a $70 million provision related to this investigation,” Technip said.

Fine reduced due to full cooperation

 

The U.S. Department of Justice said on Tuesday that in the resolutions with the DOJ, TechnipFMC received credit “for its substantial cooperation with the Department’s investigation and for taking extensive remedial measures.”

“For example, the company separated from or took disciplinary action against former and current employees in relation to the misconduct described in the statement of facts to which it admitted as part of the resolution; made changes to its business operations in Brazil to no longer participate in the type of work where the misconduct at issue arose; required that certain employees and third parties undergo additional compliance training; and made specific enhancements to the company’s internal controls and compliance program,” DOJ said.

It added: “Accordingly, the criminal fine reflects a 25 percent reduction off the applicable U.S. Sentencing Guidelines fine for the company’s full cooperation and remediation.”


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