TechnipFMC pays $296 million to settle FCPA offenses

TechnipFMC plc, an oil and gas services company headquartered in London, agreed Tuesday to pay criminal penalties of $296 million to resolve violations of the Foreign Corrupt Practice Act in Brazil and Iraq.

The DOJ assessed total criminal penalties of $296 million against TechnipFMC and its U.S. subsidiary. But the DOJ said TechnipFMC would pay about $214 million of the total penalties to enforcement authorities in Brazil.

The portion of penalties paid to the DOJ amounted to $81.9 million.

The DOJ said Technip’s former consultant in Brazil, Zwi Skornicki, also pleaded guilty Tuesday in connection with TechnipFMC’s FCPA resolution.

TechnipFMC plc entered into a three-year deferred prosecution agreement (pdf) with the DOJ. The DPA charged the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. The DPA didn’t require the company to appoint an independent compliance monitor.

The U.S. subsidiary, Technip USA Inc., agreed to plead guilty (pdf) to one count of conspiracy to violate the FCPA’s anti-bribery provisions. The DOJ assessed a $500,000 fine under the plea agreement.

TechnipFMC plc was formed in January 2017 with the merger of Paris-based Technip S.A. and FMC Technologies Inc., based in Houston.

TechnipFMC plc trades on the NYSE under the symbol FTI.

The company said in a statement Tuesday it “has reached an agreement in principle with the SEC Staff, subject to final SEC approval.” It wasn’t clear from the statement if TechnipFMC will receive a declination from the SEC or if the agency will bring an enforcement action.

In 2010, one of the predecessor companies, Technip S.A., paid $240 million in criminal penalties to the DOJ to resolve FCPA offenses in Nigeria. Technip had been part of the TSKJ joint venture. TSKJ was headed by KBR and also included ENI of Italy and JGC of Japan.

In April 2016, FMC disclosed in SEC filings that it was under investigation by U.S. authorities for possible FCPA violations connected to Monaco-based Unaoil S.A.M.

In Tuesday’s enforcement action, the DOJ said the charges against TechnipFMC “arose out of two independent bribery schemes: a scheme by Technip to pay bribes to Brazilian officials and a scheme by FMC to pay bribes to officials in Iraq.”

In the related enforcement action in Brazil, TechnipFMC agreed to pay about $214 million under a settlement agreement with the Advogado-Geral da União (AGU), the Controladoria-Geral da União (CGU), and the Ministério Público Federal (MPF).

From 2003 until at least 2013, Technip conspired with Singapore-based Keppel Offshore & Marine Ltd. (Keppel Offshore) and Zwi Skornicki, their former consultant, to pay $69 million in bribes. The bribes were funded as “commission payments” to Skornicki. He passed some of the money to employees at Petrobras, Brazil’s state oil and gas company.

Before the formation of TechnipFMC, Technip also made more than $6 million in corrupt payments to the Workers’ Party in Brazil and to Workers’ party officials.

In December 2017, Keppel Offshore and its U.S. subsidiary agreed to pay total penalties of more than $422 million to resolve corruption charges with authorities in the United States, Brazil, and Singapore. The U.S. portion of the criminal penalties was $105 million.

Keppel Offshore operates shipyards and repairs and upgrades ships.

After the 2017 enforcement action, Keppel Offshore said Skornicki paid bribes on several projects in Brazil “with the knowledge or approval” of former Keppel executives.

Skornicki pleaded guilty Tuesday in the Eastern District of New York to a one-count criminal information charging him with conspiracy to violate the FCPA, the DOJ said. He is awaiting sentencing.

In Iraq beginning in 2008 and continuing until at least 2013, FMC bribed at least seven government officials “through a Monaco-based intermediary company,” the DOJ said.

In the UK, the Serious Fraud Office has charged four individuals, including a former Unaoil executive, with bribery-related offenses. According to an SFO release in June 2018, “Unaoil Ltd has been summonsed with two offenses of conspiracy to give corrupt payments” related to two oil pipelines in southern Iraq.

Unaoil has denied allegations of corruption.

TechnipFMC “received credit for its substantial cooperation . . . and for taking extensive remedial measures,” the DOJ said Tuesday.  The company received a 25 percent reduction off the applicable U.S. Sentencing Guidelines fine for its “full cooperation and remediation.”

The DOJ said the “governments of Australia, Brazil, France, Guernsey, Italy, Monaco and the United Kingdom provided significant assistance” in the case.

In February this year, TechnipFMC said in an SEC filing that it set aside $280 million for a settlement of bribery-related offenses with authorities in the United States, Brazil, and France.

It said Tuesday the investigation in France by the Parquet National Financier (PNF) “related to historical projects in Equatorial Guinea and Ghana” is still open.

“TechnipFMC remains committed to finding a resolution with the PNF and will maintain a $70 million provision related to this investigation,” the company said.

The FCPA Blog | June 24, 2019
http://www.fcpablog.com/blog/2019/6/25/technipfmc-pays-296-million-to-settle-fcpa-offenses.html