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Extractive Industries/Mining/Oil & Gas
Luxembourg
Nationality of Foreign Officials: Brazil
Summary of Allegations:
Police and prosecutors in Brazil allege that Tenaris SA’s Brazilian unit Confab was involved in a bribery scheme to win work from Petrobras. Between 2008 and 2013 two tube companies (one of them being Tenaris's Brazilian unit) involved in the scheme allegedly paid about 40 million reais ($11.2 million) in bribes to Petrobras executives to win about 5 billion reais ($1.4 billion) worth of pipe contracts, prosecutors said.
Approximate Alleged Payments to Foreign Officials:
Business Advantage Allegedly Obtained:
Nationality of Foreign Officials: Uzbekistan
Summary of Allegations:
The DOJ and SEC alleged that Tenaris violated the FCPA by making improper payments to officials at OJSC O'ztashqineftgaz (OAO), Uzbekistan's state-controlled oil and gas production company, in order to gain access to competitors' confidential bids during four tenders in 2006 and 2007 for oilfield pipe and related services for energy extraction and transportation projects. Tenaris allegedly used the confidential information to revise its own bids. As a result, the company was awarded four contracts by the Uzbekistan government, which yielded approximately $5 million in profits. The alleged improper payments were made via an agent, which earned a 3.0 - 3.5% commission on the value of the contracts awarded to Tenaris.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Pipeline supply contracts, valued at $5 million in profits
Agencies: Italy: Milan Public Prosecutor's Office, Italy: Unspecified, Switzerland: Unspecified
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 1 August 2019, Tenaris in its Form 6-K filing with the SEC disclosed ongoing investigations by authorities in Italy and Switzerland regarding its alleged payment to accounts controlled by a Petrobras officer. The authorities are in the process of deciding whether the payment violates applicable anti-bribery rules, including the FCPA.
In July 2019, the Public Prosecutor Office of Milan, Italy has concluded a preliminary probe into the payment mentioned above without making any determination. Multiple executives of the company are within the scope of the probe, including the company’s board members Gianfelice Rocca and Roberto Bonatti, and shareholder San Faustin.
On 26 May 2022, Tenaris disclosed that the Milan court of first instance (overseeing the investigation into the alleged improper payments made in Brazil for the supposed benefit of Confab Industrial S.A., a Brazilian subsidiary of the Company) dismissed the case brought against Tenaris’s Chairman and Chief Executive Officer Paolo Rocca, Board members Gianfelice Rocca and Roberto Bonatti, and the company's controlling shareholder, San Faustin S.A.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results: Criminal Fine, Deferred Prosecution Agreement, Disgorgement, Non-Prosecution Agreement
Year Resolved: 2011
Compliance Monitor:
Ongoing: No
Details:
On May 17, 2011, Tenaris settled FCPA charges with the DOJ and SEC. Tenaris entered into a non-prosecution agreement with the DOJ, agreeing to pay a USD 3.5 million criminal penalty. Tenaris entered into a two-year deferred prosecution agreement with the SEC (the SEC's first such agreement) and agreed to pay USD 5,428,338 in disgorgement and prejudgment interest, as well as to comply with certain undertakings regarding its FCPA compliance program.
The DOJ and SEC highlighted Tenaris's voluntary disclosure and "extraordinary cooperation", as well as the company's enhanced compliance efforts.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
According to Tenaris's SEC filing in 2016, it voluntarily reported to the DOJ and SEC regarding its payments related to Petrobras, which may have benefited its Brazilian subsidiary.
On 21 February 2020, Tenaris 6K filing indicated the investigation was ongoing.
On 2 June 2022, the Securities and Exchange Commission issued a consensual cease-and-desist order, asserting violations of the FCPA's anti-bribery, internal controls, and books and records provisions in connection with the activities of Tenaris's Brazilian subsidiary, Confab Industrial S.A. Tenaris was ordered to disgorge USD 42,842,497 in illicit profits, plus USD 10,257,841 in prejudgment interest, and to pay a civil penalty of USD 25,000,000. The company is also required to submit periodic status reports to the SEC concerning its remediation efforts for a period of two years.
Gianfelice Rocca (board member of Tenaris)
Roberto Bonatti (board member of Tenaris)
San Faustin (controlling shareholder of Tenaris)
Discovery Method: Voluntary Disclosure
Details:
Tenaris SA had described the (at the time ongoing) investigation as follows in its SEC Form 20-F filed on June 30, 2010:
"The Company has learned from one of its customers in Central Asia that certain sales agency payments made by one of the Company's subsidiaries may have improperly benefited employees of the customer and other persons. These payments may have violated certain applicable laws, including the U.S. FCPA ("Foreign corrupt practices act"). The Audit Committee of the Company's Board of Directors has engaged external counsel in connection with a review of these payments and related matters, and the Company has voluntarily notified the U.S. Securities and Exchange Commission and the U.S. Department of Justice. The Company will share the results of this review with the appropriate regulatory agencies, and will cooperate with any investigations that may be conducted by such agencies. At this time, the Company cannot predict the outcome of these matters or estimate the range of potential loss or extent of risk, if any, to the Company's business that may result from resolution of these matters."
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