DOJ charges Rolls-Royce with FCPA conspiracy
Tuesday, January 17, 2017 at 3:22PM
Richard L. Cassin in Andrew Weissmann, Azerbaijan, Brazil, Iraq, Kazakhstan, Rolls Royce, Thailand

Rolls-Royce plc agreed to pay the United States a criminal penalty of $170 million under a deferred prosecution agreement after being charged with a long-running global conspiracy to violate the Foreign Corrupt Practices Act.

The DOJ action was part of an $800 million resolution of investigations into overseas bribery by U.S., UK, and Brazilian authorities.

Rolls-Royce and the DOJ entered into a three-year deferred prosecution agreement (pdf).

The DOJ filed a criminal information (pdf) and the DPA in federal court in Columbus, Ohio on December 20. The documents were under seal until Tuesday.

On Monday, UK-based Rolls-Royce reached agreement for a deferred prosecution agreement with the UK Serious Fraud Office. That DPA (pdf) requires Rolls-Royce to pay £497 million ($599 million) plus interest and the SFO's costs. A London court Tuesday approved the DPA.

SFO chief David Green said: "This is the largest ever single investigation carried out by the SFO, costing £13 million ($16 million) and involving some 70 SFO personnel. It is the third use of a DPA since the power became available to prosecutors in 2014."

In Brazil, Rolls-Royce will pay the Ministério Público Federal a $25.5 million criminal penalty under a leniency agreement.

Rolls-Royce said its total payments under the three agreements will be about £671 million (more than $800 million).

The company makes engines and generators for the aerospace, defense, marine, and energy sectors.

Rolls-Royce admitted in the U.S. enforcement action that between 2000 and 2013 it paid more than $35 million in bribes to foreign officials.

In exchange, the officials gave Rolls-Royce confidential information and awarded it and affiliated companies contracts.

Under the U.S. deferred prosecution agreement unsealed Tuesday, Rolls-Royce agreed to pay a criminal penalty of $195.5 million. But the DOJ gave a $25.5 million credit for the Brazil penalty. That reduced the total U.S. fine to $170 million.

As part of its resolution with the SFO, Rolls-Royce admitted (pdf) paying other bribes or failing to prevent bribery in China, India, Indonesia, Malaysia, Nigeria, Russia, and Thailand from 1989 to 2013.

The DOJ said Rolls-Royce didn't self report the bribery until "after the media began reporting allegations of corruption and after the SFO had initiated an inquiry into the allegations and that the conduct was extensive and spanned 12 countries." 

But Rolls-Royce cooperated with the U.S. investigation, the DOJ said.  And the company fired employees and agents "implicated" in the bribery. It also put in place better compliance features and internal controls.

The DOJ said it therefore gave Rolls-Royce a 25 percent reduction in its criminal penalty.

The DOJ's Andrew Weissmann said Tuesday the "global nature" of Rolls-Royce's crimes required a global response and "collective efforts to ensure that ethical companies can compete on an even playing field anywhere in the world.”


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

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