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FCPA Blog Daily News

« Job: FCPA Compliance Manager | Main | Cooperation and competition among enforcing countries »
Monday
Jan282013

Total on trial for oil-for-food violations

The French oil giant Total SA is on trial in Paris for violating the United Nations oil-for-food program.

Total is accused of buying oil directly from the former Saddam Hussien regime in violation of the U.N. embargo.

It faces charges of corruption and involvement in fraudulent activity, according to Radio France Internationale (RFI).

On trial with Total are its CEO Christophe de Margerie and former French interior minister Charles Pasqua. In all, 18 defendants face charges in the case.

The trial opened last week.

RFI said the defense claims the trial can't proceed because violating a U.N. embargo was not against French law at the time of the alleged violations.

The U.N. oil-for-food program allowed Iraq to sell some of its oil through U.N. accounts to pay for food and medicine despite a trade embargo imposed on Iraq after the first Gulf War. The program operated from 1996 to 2003.

The U.S. DOJ and SEC sanctioned about a dozen companies for paying kickbacks to the Iraqi regime to win sales. The companies paid more than $200 million in fines and other penalties in the U.S. enforcement actions. GE, Chevron, AB Volvo, Innospec, Ingersoll-Rand, Akzo-Nobel, York, Textron, El Paso, Agco, Flowserve, Novo Nordisk, and Fiat were among those charged with oil-for-food vioaltions.

Most kickbacks went directly to Iraqi government agencies and not to individuals. The FCPA's antibribery provisions prohibit corrupt payments to foreign officials but not to government bodies. So the defendants in the U.S. cases were typically charged with books-and-records and internal-controls violations for covering up the kickbacks.

The U.K. jailed a British man in 2011 for 24 weeks for oil-for-food violations. Mark Rodney Jessop paid kickbacks to sell surgical instruments to the Iraqi government.

Separately, Total said in November last year that it reserved $398 million for an FCPA settlement with the DOJ and SEC.

The U.S. enforcement agencies have been investigating Total's operations in Iran since 2003. The investigation has focused on payments to consultants who helped Total win rights to gas fields, and whether the payments went to Iranian officials.

Total SA trades on the NYSE under the symbol TOT.

The oil-for-food trial in France is expected to run for at least a month.

Total has said it had no knowledge of payments to the Iraqi regime, RFI reported, and 'expects the charges to be dropped.'

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