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« In New Top Ten, Eight Are Foreign | Main | FCPA Conspiracy Theories »
Thursday
Nov042010

Seven Companies Settle For $236.5 Million (Updated)

Making history today for the most companies to simultaneously settle FCPA-related violations, Global logistics firm Panalpina and five of its oil-and-gas services customers resolved charges with the DOJ and SEC, and another customer settled with the SEC only.

The companies will pay $156.5 million in criminal fines and about $80 million in civil disgorgement, interest and penalties.

Panalpina. Switzerland-based Panalpina World Transport (Holding) Ltd. and its U.S.-based subsidiary, Panalpina Inc., bribed foreign officials on behalf of customers for customs clearance. Between 2002 and 2007, Panalpina said it paid "thousands of bribes totaling at least $27 million . . . in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan."

The DOJ charged Panalpina World Transport with conspiring to violate and violating the anti-bribery provisions of the FCPA. The company entered into a deferred prosecution agreement.

Panalpina Inc. was charged with conspiring to violate the books and records provisions of the FCPA and with aiding and abetting customers in violating the books and records provisions of the FCPA.

The Panalpina companies were fined $70.5 million.

In its SEC settlement, Panalpina Inc. agreed to pay $11.3 million in disgorgement of profits.

Panalpina's $81.8 million settlement, Pride's $56.1 million deal, and Shell's $48.1 million settlement (discussed below) land them all in the top ten FCPA settlements of all time.

Shell. SNEPCO, a Nigerian subsidiary of Royal Dutch Shell plc , was charged with conspiring to violate the antibribery and books and records provisions of the FCPA, and with aiding and abetting a violation of the books and records provisions. SNEPCO paid $2 million to its subcontractors knowing some or all of the money would be paid as bribes to Nigerian customs officials by Panalpina to import materials and equipment into Nigeria.

Shell entered into a deferred prosecution agreement and will pay a $30 million criminal penalty. 

In their SEC settlement, Royal Dutch Shell and U.S. subsidiary Shell International Exploration and Production Inc. agreed to pay $18.1 million in disgorgement of profits and prejudgment interest

Transocean. The DOJ charged a Caymans Island subsidiary of Swizerland-based Transocean Ltd. with conspiring to violate the antibribery and books and records provisions of the FCPA, violating the anti-bribery provision of the FCPA, and aiding and abetting the violation of the books and records provisions of the FCPA.

The company paid about $90,000 in bribes through its freight forwarding agents to clear drill rigs through customs.

Transocean entered into a deferred prosecution agreement and will pay a $13.4 million criminal penalty.

In its SEC settlement, Transocean agreed to disgorge $7.2 million in profits and prejudgment interest.

GlobalSantaFe. In a related SEC enforcement action, GlobalSantaFe Corp., which in 2007 merged with a subsidiary of Transocean Inc. to later form Transocean Ltd, agreed to pay $5.9 million to resolve civil antibribery and record keeping and internal controls violations. 

Tidewater. A Cayman Island subsidiary of New Orleans-based Tidewater Inc. was charged with conspiring to violate the antibribery and books and records provisions of the FCPA, and with violating the books and records provisions of the FCPA.

The company paid $160,000 in bribes through its employees and agents to tax inspectors in Azerbaijan to improperly secure favorable tax assessments. It also paid $1.6 million through Panalpina to Nigerian customs officials to clear vessels into Nigerian waters.

Tidewater entered into a deferred prosecution agreement and will pay a $7.35 million criminal penalty.

In its SEC settlement, Tidewater Inc. agreed to pay $8.3 million in disgorgement of profits, prejudgment interest and civil penalties.

Pride. Houston-based Pride International Inc. and a French subsidiary paid $800,000 in bribes directly and indirectly to government officials in Venezuela, India and Mexico. The bribes were paid to extend drilling contracts for three rigs operating offshore in Venezuela, to secure a favorable decision relating to a customs dispute for a rig imported into India, and to avoid the payment of customs duties and penalties relating to a rig and equipment operating in Mexico.

Pride was charged with conspiring to violate the antibribery and books and records provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and violating the books and records provisions of the FCPA.

Pride International entered into a deferred prosecution agreement but did not pay any criminal penalties. During the course of the investigation, the DOJ said, Pride "provided information and substantially assisted in the investigation of Panalpina."

Its French subsidiary, Pride Forasol, was charged with conspiring to violate the anti-bribery provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and aiding and abetting the violation of the books and records provisions of the FCPA.

Pride Forasol paid a $32.6 million criminal penalty.

In its SEC settlement, Pride International agreed to pay $23.5 million in disgorgement of profits and prejudgment interest.

Noble. Noble Corporation, organized in Switzerland, paid $74,000 to a Nigerian freight forwarding agent, knowing that some of the payments would be passed on as bribes to Nigerian customs officials. It  falsely recorded the bribe payments as legitimate business expenses in its corporate books.

Noble received a non-prosecution agreement and will pay a $2.59 million criminal penalty.

The DOJ said Noble's non-prosecution agreement recognizes the firm's "early voluntary disclosure, thorough self-investigation of the underlying conduct, full cooperation with the department and extensive remedial measures undertaken by the company. As a result of these factors, among others, the department agreed not to prosecute Noble or its subsidiaries for the bribe payments, provided that Noble satisfies its ongoing obligations under the agreement."

In its SEC settlement, Noble Corporation agreed to pay $5.5 million in disgorgement of profits and prejudgment interest.

___________________

View the DOJ's November 4, 2010 release here.

Download the SEC's civil complaints against Panalpina here, Shell here, Noble here, Tidewater here, Pride here, Transocean here, and GlobalSantaFe here.

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