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Thursday
Sep202007

Panalpina Suspends Services For Oil and Gas-Related Customers in Nigeria

Panalpina's cooperation with the U.S. Department of Justice appears to be in full swing. For starters, it is exiting the Nigeria logistics and freight forwarding market for all oil and gas services customers, at least a dozen of which have been contacted by the DOJ about Panalpina's customs clearance practices in Nigeria and other countries.

Panalpina confirmed that its U.S. subsidiary has been instructed to "produce documents and other information related to its business, its services to certain customers and its services in Nigeria, Kazakhstan and Saudi Arabia." It also said its internal investigation into corrupt payments in those countries is continuing. Presumably it is sharing the results with the DOJ on a real-time basis.

Apparently echoing the U.S. Government's position on Nigeria's persistent corruption problem, Panalpina blamed the suspension of services on the "unclear and uncertain regulatory framework," which means the corrupt practices embedded in the Nigerian bureaucracy.

This turns the heat up further on Nigeria. It is facing a choice to clean up public-sector corruption or do without the services of oil and gas-related companies and others subject to the jurisdiction of the Foreign Corrupt Practices Act. In August this year, Noble Corporation said it could not obtain or renew permits for five of its seven drilling rigs operating in Nigeria, presumably because it stopped authorizing potentially corrupt payments, and may need to exit the market entirely.

View Panalpina's Announcement Here.

View Other Posts About Panalpina Here.

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