In March 2024, the Department of Justice (DOJ) announced the resolution of a Foreign Corrupt Practices Act (FCPA) enforcement action involving the Swiss trading firm G Trafigura Beheer B.V. (Trafigura), an international commodity trading company with its primary operations in Switzerland. The company pleaded guilty and will pay over $126 million to resolve an investigation stemming from the company’s corrupt scheme to pay bribes to Brazilian government officials to secure business with Brazil’s state-owned and state-controlled oil company, Petróleo Brasileiro S.A. Petrobras (Petrobras).
According to the DOJ Press Release, “Trafigura pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA. Under the plea agreement, Trafigura will pay a criminal fine of $80,488,040 and forfeiture of $46,510,257. The department will credit up to $26,829,346 of the criminal fine against amounts Trafigura pays to resolve an investigation by law enforcement authorities in Brazil for related conduct.”
In the DOJ Press Release, Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said, “For more than a decade, Trafigura bribed Brazilian officials to illegally obtain business and reap over $61 million in profits. Today’s guilty plea underscores that companies will face significant penalties when they pay bribes and undermine the rule of law. The department remains determined to combat foreign bribery and hold accountable those who violate the law.”
U.S. Attorney Markenzy Lapointe for the Southern District of Florida said, “Our office will continue to target anyone who uses the Southern District of Florida to further foreign corrupt practices and bribery schemes. We will continue working with our Criminal Division colleagues to identify and prosecute those responsible, including individuals and corporations.” Finally, Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division noted, “Trafigura’s corrupt practices violated the FCPA, and today’s resolution demonstrates that there are steep penalties for any company that tries to bribe government officials.
The information noted that between approximately 2003 and 2014, Trafigura and its co-conspirators paid bribes to Petrobras officials to obtain and retain business with Petrobras. Beginning in 2009, Trafigura and its co-conspirators, who met in Miami to discuss the bribery scheme, agreed to make bribe payments of up to 20 cents per barrel of oil products bought from or sold to Petrobras by Trafigura and to conceal the bribe payments through the use of shell companies, and by funneling payments through intermediaries who used offshore bank accounts to deliver cash to officials in Brazil. Trafigura profited approximately $61 million from the corrupt scheme.
Trafigura’s conduct during most of the investigation was undoubtedly less than sterling. The company did not self-disclose to the DOJ and had the Plea Agreement dryly noted, “However, the defendant, in particular during the early phase of the government’s investigation, failed to preserve and produce certain documents and evidence promptly and, at times, took positions that were inconsistent with full cooperation.” Additionally, Trafigura was slow to exercise disciplinary and remedial measures for certain employees whose conduct violated company policy. In other words, it was not a company that engendered itself with the DOJ during the investigation phase.
Perhaps because of its conduct during the investigation and an apparent lack of a culture of compliance at the firm, the company only received 10% off the middle range under the sentencing guidelines. Trafigura was a recidivist, with (1) a 2006 guilty plea for entry of goods using false statements, (2) Trafigura’s 2010 conviction of violating Netherlands exports, and (3) a violation of Côte d’Ivoire environmental laws in connection with the discharge of petroleum waste. Ultimately, Trafigura admitted that it had done something illegal during the investigation. However, the company’s initial stance in resolution talks caused a lot of delays, and the government had to spend a lot of time and money gathering more evidence that could be used in court before Trafigura could agree to a peaceful resolution. This led to a guilty plea and a criminal fine, reflecting a 10% reduction off the fifth percentile of the applicable guidelines acceptable range.
In this blog series, we will consider bribery schemes, resolutions, and lessons learned for compliance professionals.
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