View as PDF
View as PDF
Extractive Industries/Mining/Oil & Gas
London, United Kingdom
Nationality of Foreign Officials: Brazil, Iraq
Summary of Allegations:
London-based oil and gas services company TechnipFMC plc (“TechnipFMC”) was formed in January 2017 via the merger of Technip S.A. (“Technip”) and FMC Technologies, Inc. (“FMC Technologies”). TechnipFMC has admitted that its predecessor companies were involved in two separate bribery schemes: one in Brazil involving Technip and one in Iraq involving FMC Technologies.
Technip Scheme - Brazil
Under the Technip bribery scheme which took place between 2003 to 2014, executives from Technip and its U.S. subsidiary Technip USA Inc. (“Technip USA”) and a Brazil-based joint venture owned 25% by Technip USA and 75% by Keppel Offshore & Marine Ltd. (“KOM”) paid nearly US$ 69 million in bribes via a third-party consultant to various Brazilian government officials from Brazilian government-owned Petróleo Brasileiro S.A. (“Petrobras”) and the Worker’s Party of Brazil. The bribes were funneled through the consultant as “commission” payments and were paid for the purpose of securing improper business advantages from the Brazilian government officials. Technip also corruptly hired the children of various Brazilian government officials as favors in exchange for business advantages. Technip earned approximately US$ 135.7 million in ill-gotten profits from the scheme.
FMC Technologies Scheme - Iraq
Between 2008 and 2013, employees and agents of FMC Technologies engaged in a scheme to pay bribes and other improper benefits to various Iraqi oil officials via a consultant intermediary company and its sub-agents, in an effort to secure service contract awards in Iraq. FMC Technologies entered into multiple agreements with the intermediary company to conceal the scheme and paid it over US$ 794,000 without evidence of services rendered, and falsely characterized the payments in its books and records as legitimate site installation payments.
Approximate Alleged Payments to Foreign Officials: over US$ 69 million in bribes, improper hiring of family members of government officials, improper favors to government officials (e.g. assistance with passport processing)
Business Advantage Allegedly Obtained: business advantages in Brazil and Iraq including contract awards.
Agencies: Brazil: Advogado-Geral da União (AGU), Brazil: Controladoria-Geral da União (CGU) , Brazil: Public Prosecutor's Office / Ministerio Publico Federal (MPF)
Results: Criminal Fine
Year Resolved: 2019
Compliance Monitor:
Ongoing: No
Details:
25 June 2019 - The DOJ, in its deferred prosecution agreement, referenced that TechnipFMC reached a settlement with Advogado-Geral da União (AGU), the Controladoria-Geral da União (CGU) and the Ministério Público Federal (MPF) over bribes paid in Brazil, through which TechnipFMC will pay a total of US$ 214.3. The DOJ credited this amount towards the criminal fine it imposed.
Agencies: United States: Department of Justice
Results: Criminal Fine, Deferred Prosecution Agreement
Year Resolved: 2019
Compliance Monitor: No
Ongoing: No
Details:
25 June 2019 - TechnipFMC entered into a three-year deferred prosecution agreement (“DPA”) with the DOJ and was charged with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. Per the terms of the DPA, the company is required to pay a total criminal fine of US$ 296.2 million, of which US$ 81.9 million will be paid to the United States Treasury and of which US$ 500,000 will be paid as a criminal fine on behalf of Technip USA, who for its part, pleaded guilty to violating the FCPA in connection with the resolution. TechnipFMC received a US$ 214.3 million credit for the balance of the total criminal fine, equal to the amount TechnipFMC must pay to Advogado-Geral da União (AGU), the Controladoria-Geral da União (CGU) and the Ministério Público Federal (MPF) over bribes paid in Brazil pursuant to a separate resolution. The DPA also requires TechnipFMC to annually report on its remediation and implementation of agreed upon compliance measures.
Agencies: United States: Securities and Exchange Commission
Results: Administrative Order, Cease-and-Desist Order, Disgorgement
Year Resolved: 2019
Compliance Monitor: No
Ongoing: No
Details:
23 September 2019 - The SEC issued a consensual cease-and-desist order against TechnipFMC requiring the company to pay a total of approximately US$ 5 million (US$ 4.3 million in disgorgement and US$ 734,712 in prejudgment interest). The SEC also ordered TechnipFMC to report periodically during a three-year term on its remediation efforts and implementation of agreed upon compliance measures. The SEC elected not to impose a civil penalty on TechnipFMC based upon the US$ 296.2 million criminal fine that the U.S. Department of Justice imposed on the company in June 2019.
According to the SEC’s order, FMC Technologies overlooked numerous red flags concerning the intermediary company, failed to conduct adequate due diligence on the intermediary company’s sub-agents, and failed to properly assess and manage its anti-corruption risks in Iraq.