A Swiss-based freight firm and five international oil service companies agreed Thursday to pay $156 million in criminal fines and give up $80 million in profits, interest and penalties for their roles in a global bribery scandal, the Justice Department said.
Panalpina World Transport Ltd. of Basel, Switzerland, and its U.S. subsidiary, Panalpina Inc., admitted in court documents to paying bribes to foreign officials on behalf of its customers in the oil and gas industry to circumvent local rules and regulations on the import of goods to foreign jurisdictions.
Panalpina admitted that between 2002 and 2007, it paid $27 million in bribes to foreign officials in Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Its customers, including Shell Nigeria Exploration and Production Co. Ltd., Transocean Inc. and Tidewater Marine International Inc., admitted approving or condoning the bribes and recording them as legitimate business expenses.
The agreement came in response to an investigation by the Justice Department and the Securities and Exchange Commission into violations of the Federal Corrupt Practices Act (FCPA).
"The settlement of these claims marks the closing of an extremely burdensome chapter in Panalpinas history and the end of a very demanding three-year effort to address and eliminate serious concerns," said Monika Ribar, Panalpinas chief executive officer, in a statement.
Ms. Ribar said the company's compliance systems had undergone "significant enhancements."
Alexandra Wragge, president of the nonprofit TRACE, which works with multinational companies on anti-bribery compliance, said the short-term consequence of the settlement could be a cost increase passed along to consumers "because compliance is expensive."
"Ultimately, the cost should taper off because bribery is also expensive," she said. "When they do figure out a way to do business without bribery, then costs do go down."
Justice said Panalpina violated U.S. anti-bribery laws, agreeing to resolve the charges by entering into a deferred prosecution deal - meaning if the company abides for three years by terms of a criminal information filed in the case, the government will drop the prosecution.
"The Department of Justices commitment to rooting out foreign bribery is unwavering," said Assistant Attorney General Lanny A. Breuer, who heads the departments criminal division. "Wherever possible, the department seeks to find and hold accountable all the players in corrupt deals — from customers who know that bribes are being paid on their behalf to those actually making the payments."
Justice officials also said a criminal information was filed charging the Shell Nigeria Exploration and Production Co. Ltd. (SNEPCO), a Nigerian subsidiary of Royal Dutch Shell, with violating U.S. anti-corrupt statutes.
The department said the charges related to $2 million SNEPCO paid to its subcontractors knowing that some or all of the money would be paid as bribes to Nigerian customs officials by Panalpina to import materials and equipment. The company agreed to a deferred prosecution agreement that requires, among other things, that it pay a $30 million criminal penalty.
Transocean Inc., a Caymans Island subsidiary of Transocean Ltd., also was charged in a criminal information with conspiring to violate the FCPA . Transocean Ltd. is a global provider of offshore oil drilling services and equipment based in Vernier, Switzerland.
The charges involve $90,000 in bribes paid by Transocean Inc.s freight forwarding agents in Nigeria to circumvent Nigerian customs regulations regarding the import of goods and materials and the import of Transoceans deep-water oil rigs into Nigerian waters. Transocean also agreed to a deferred prosecution agreement that requires it, among other things, to pay $13.44 million criminal penalty.
The department also detailed charges that New Orleans-based Tidewater Marine, a Cayman Island subsidiary of Tidewater Inc., violated the FCPA. Tidewater Inc. operates offshore service and supply vessels for energy exploration.
The charges involve $160,000 in bribes paid through its employees and agents to tax inspectors in Azerbaijan to secure favorable tax assessments and approximately $1.6 million in bribes paid through Panalpina to Nigerian customs officials to get the officials to disregard Nigerian customs regulations on the importation of vessels into Nigerian waters.
Tidewater Marine agreed to pay a $7.35 million criminal penalty.
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