National Oilwell Varco pays $25 million for violating Iran, Cuba, Sudan sanctions
Monday, November 14, 2016 at 1:02PM
Richard L. Cassin in Cuba, Iran, NNational Oilwell Varco, Office of Foreign Assets Control, Sudan, trade sanctions

Houston-based driller National Oilwell Varco, Inc. reached a settlement with the DOJ, the Commerce Department, the Treasury Department's Office of Foreign Assets Control, and U.S. Immigration and Customs Enforcement for trade sanction violations reaching back to 2002.

The company and subsidiaries Dreco Energy Services Ltd. and NOV Elmar agreed to pay $25 million to resolve potential criminal and civil offenses.

The companies entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Southern District of Texas that included a $25 million penalty.

National Oilwell Varco or NOV said in a securities filing the $25 million penalty for the universal settlement was "preliminarily" agreed in 2010. The company didn't say why the final settlement took six more years.

OFAC announced its enforcement action Monday (November 14).

The company said in a securities filing last week it entered into settlement agreements with the agencies on November 9.

OFAC said its penalty against National Oilwell Varco was about $6 million but was "deemed satisfied" by the company's payment of the $25 million criminal fine to the DOJ under the NPA.

From 2002 to 2005, NOV approved at least four Dreco commission payments to a U.K.-based entity related to the sale and export of goods from Dreco to Iran.

From 2006 to 2008, there were two deals worth about $13 million involving sales to Iran.

From 2007 to 2009, Dreco engaged in 45 transactions valued at about $1.7 million involving the sale of goods to Cuba.

There was one transaction with Sudan worth about $20,000 in 2005 or 2006.

OFAC said NOV didn't voluntarily self disclose the offenses.

The four commission payments to an agent involved in the Iran trade were "egregious," OFAC said, because senior-level finance executives within NOV approved them.

"NOV appears to have willfully blinded itself to the consequences of its approval by acquiescing to Dreco’s deliberate non-identification of Iran in its communications with NOV," OFAC said.

National Oilwell Varco trades on the NYSE under the symbol NOV.

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NOV's disclosure about the settlement in its Form 8-K filed with the SEC on November 9, 2016 said,

On November 9, 2016, National Oilwell Varco, Inc. (“NOV”) entered into settlement agreements to resolve investigations by the U.S. Department of Justice, the Department of Commerce, Bureau of Industry and Security, the U.S. Department of Treasury, Office of Foreign Assets Control and the U.S. Immigration and Customs Enforcement regarding NOV’s compliance with U.S. export trade laws and regulations. NOV will pay a total of $25 million to resolve the investigations, an amount which was preliminarily agreed upon in 2010 and which was fully accrued around that time. These matters were previously disclosed in NOV’s annual reports on Form 10-K and quarterly reports on Form 10-Q.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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