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FCPA Blog Daily News

Entries in Nigeria (221)


An Exodus From Nigeria?

A Reuters report from August 26, 2007 quotes Noble Corporation as saying it has been unable to obtain or renew permits for five of its seven drilling rigs operating in Nigeria due to the FCPA investigation of operations there. If those permits cannot be obtained, "we may need to terminate the drilling contract," Noble reportedly said. Presumably, the permits cannot be obtained because Noble will not authorize potentially corrupt payments to Nigerian government officials.

If true, the U.S. Department of Justice apparently has told Noble and at least ten more oil and gas service companies to pull out of Nigeria instead of risking future FCPA violations. That could put serious pressure on Nigeria's oil industry. The country finally will be forced either to renounce corrupt practices in the oil patch, or try to find new service providers who have the needed technology and are beyond the reach of the FCPA. Are there any?

View the Reuters' Report Here.

View Earlier Posts About Nigeria Here and Here.


Panalpina's Practices Fall Under the FCPA Spotlight

February 6, 2007 -- The DOJ reports Vetco’s admission that payments to Nigerian Customs Officials violated the FCPA. The DOJ says, “These corrupt payments were paid through a major international freight forwarding and customs clearance company to employees of the Nigerian Customs Service, and coordinated largely through Vetco Gray Controls Inc.'s offices in Houston. . . . From at least September 2002 to at least April 2005, . . . [Vetco] authorized that agent to make at least 378 corrupt payments totaling approximately $2.1 million to Nigerian Customs Service officials to induce those officials to provide the defendants with preferential treatment during the customs process.”

April 26, 2007 -- Tidewater Inc. announces an internal investigation of its Nigerian operations. “The Audit Committee commissioned the internal investigation in late February 2007 after management brought to its attention a settlement earlier that month of well-publicized criminal FCPA proceedings (the second in recent years) involving Vetco Gray Controls, a Houston-based oil service company with substantial operations in Nigeria. Tidewater's management and the Audit Committee were concerned that the Company's Nigerian affiliate used the same third-party agent for its temporary importations in Nigeria that was thought to be significantly implicated in the 2007 Vetco Gray proceedings.”

July 24, 2007 -- Panalpina says some customers of its U.S. subsidiary have “been requested by U.S. authorities to produce documents related to the provision of its services to Nigeria for a specific customer and its contractor. This request was triggered by the plea agreement of such customer with the U.S. authorities for allegedly making improper payments to Nigerian officials to secure preferential customs treatment. . . . U.S. authorities have extended the scope of their review to Panalpina’s documents related to services into Nigeria, Kazakhstan and Saudi Arabia for a limited number of customers.”

July 25, 2007 -- carries a Dow Jones Commodities News story, reporting that the DOJ sent letters on July 2, 2007 to eleven oil and oil-service companies, “asking them to detail their relationship with Panalpina . . . The Justice Department letter, which was read to Dow Jones, cited concerns about payments that may violate the U.S. Foreign Corrupt Practices Act. The oil and oil-service firms were asked to list the countries where Panalpina provided it with services in the past five years, and to specify what it paid for those services. Each firm also was asked to meet separately with federal prosecutors in Washington, D.C. A Justice Department spokesman didn't respond to requests for comment.”

(emphasis added)


As mentioned in an earlier post, similar internal investigations into Nigerian operations have now been announced by Tidewater, Nabors Industries, Transocean, GlobalSantaFe Corp., Noble Corp. and Global Industries.

View the DOJ News Release Here.

View the Tidewater News Release Here.

View the Panalpina News Release Here.

View the Story Here.


Does ABB Have an Effective Compliance Program?

Zurich, Switzerland-based engineering giant ABB Ltd's Q2 earnings release contained the following item:

On July 13, 2007, ABB disclosed to the U.S. Department of Justice and the U.S. Securities and Exchange Commission suspect payments made by employees of company subsidiaries in Asia, South America and Europe, in particular Italy. These suspect payments were discovered as a result of ABB's internal audit and compliance program. The payments may be in violation of the Foreign Companies (sic) Practices Act or other applicable laws. If ABB is found to have violated any of these laws, the company could be liable for penalties and other costs and the violations could otherwise negatively impact its business. ABB is cooperating on these issues with the relevant authorities and is continuing its internal investigations and compliance reviews.

In July 2004, ABB and two subsidiaries disgorged $5.9 million and paid a $10.5 million penalty for FCPA violations involving Nigeria, Angola and Kazakhstan.

That same month, ABB said:

ABB has undertaken an extensive compliance review of its upstream business . . . in full cooperation with the DoJ and the SEC. As part of the agreement with the U.S. authorities, both ABB and the upstream business will adopt enhanced compliance procedures intended to detect and prevent future violation of laws related to improper payments. (emphasis added)

Whether ABB has had an "effective compliance program" since 2004 is likely to be an issue now that new potential violations have been found.

ABB's American Depositary Shares trade on the New York Stock Exchange under the symbol: ABB.

View ABB's July 26, 2007 Earnings Release here.

View the SEC's July 6, 2004 Litigation Release here.

View ABB's July 7, 2004 News Release here.


Nigerian Problems Trigger Another FCPA Investigation

The Houston Chronicle reports that Nabors Industries is conducting an internal investigation in response to a federal investigation into possible violations of the Foreign Corrupt Practices Act. The article says,

The Justice Department is investigating alleged Foreign Corrupt Practices Act violations by oil-service companies that used Panalpina [a Swiss based freight forwarder] and other brokers in Nigeria and other parts of the world, the company said.

In addition to Nabors, similar investigations into Nigerian operations have been announced by Transocean, GlobalSantaFe Corp., Noble Corp., Tidewater and Global Industries, among others.

View the Houston Chronicle Article here.


Former Willbros Executive Charged with FCPA Violations

The U.S. Department of Justice announced on July 23, 2007 the indictment in Houston of a former executive of a subsidiary of Houston-based Willbros Group Inc. He is charged with conspiring to make corrupt payments to Nigerian officials in violation of the Foreign Corrupt Practices Act.

Jason Edward Steph, 37, a U.S. citizen residing in Kazakhstan, is charged with conspiring to make over $6 million in bribe payments to Nigerian officials in order to obtain and retain gas pipeline construction business from a joint venture majority-owned and controlled by the Nigerian state oil company. He was also charged with money laundering based upon the international transfer of some of the bribe money.

[Added August 9, 2007] Reuters reports that Nigeria's anti-corruption police are trying to determine who allegedly received $6 million in bribes from Steph.

View the Justice Department Press Release here.

View the Reuters Report here.

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