TechnipFMC to pay $296 million to settle bribery charges in Brazil and Iraq

The Department of Justice has announced that TechnipFMC has agreed to pay a combined fine of more than $296 million in relation to bribery charges in Iraq and Brazil.

TechnipFMC was formed from the 2017 merger of Technip and FMC Technologies. The charges in Brazil arose under Technip between 2003-2013. The charges in Iraq arose under FMC between 2008-2013.

TechnipFMC has agreed to three-year deferred prosecution agreement related to two counts of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).  However, the DOJ did not require the appointment of an independent compliance monitor.

Technip USA pleaded guilty to one count of conspiracy. As a result, the DOJ assessed a fine of $500,000 under this plea deal.

Brazilian Bribes

The company has agreed to pay the Brazilian authorities $214 million to resolve allegations that it conspired with Singapore-based Keppel Offshore and Marine, an operator of shipyards, to pay $69 million in bribes to employees at Petrobras, the state-owned oil company in Brazil. The company allegedly earned $136 million in profits from the corruptly obtained business.

The $214 million that will be paid to the Brazilian authorities will be credited against the $296 million assessment. Therefore, the company only has to pay the DOJ $82 million.

Zwi Skornicki, a Brazilian national, who worked as a consultant to both Technip and Keppel, pleaded guilty in the Eastern District of New York to one count of conspiracy to violate the FCPA. He will be sentenced later.

Iraq charges

The Iraq charges relate to seven contracts to provide metering technologies for oil and gas production measurement to the Iraqi government. The company allegedly earned profits of $5.3 million from such business.

Previous FCPA violation

Back in 2010, Technip paid $338 million to settle bribery allegations in Nigeria related to the Bonny Island LNG project. This meant that the company didn’t get a ‘first-time’ discount on the amount of the current fine.

Ongoing investigation in Africa

In a press statement, the company stated that it had agreed to pay the Brazilian and US authorities $301.3 million to resolve the anti-corruption investigations in Brazil. Not sure why there is a $5 million discrepancy in the two numbers.

The company also stated that the investigation with the French authorities over bribery allegations in Equatorial Guinea and Ghana was still ongoing. The company states that it has a $70 million provision related to this investigation.

When announcing its 2018 results (and re-affirmed in its 2019 1st quarter report), the company stated that it had set aside a reserve of $280 million as a settlement amount ‘with all authorities’.  It appears that the company is now facing an additional charge in its profit and loss account of $91 million.

SEC filing

Sign up for my newsletter

Leave a Reply

Your email address will not be published. Required fields are marked *