French Oil And Gas Company And U.S. Subsidiary Fined $296 Million Over Alleged Foreign Bribery Schemes Involving Brazil And Iraq
07/02/2019On June 25, 2019, the Department of Justice (“DOJ”) announced that it had entered into a three-year deferred prosecution agreement (“DPA”) with TechnipFMC PLC to settle allegations of Foreign Corrupt Practices Act (“FCPA”) violations in Brazil and Iraq, while requiring TechnipFMC’s U.S. subsidiary, Technip USA, to enter a guilty plea. United States v. TechnipFMC plc, 19 Cr. 278 (E.D.N.Y. June 25, 2019); United States v. Technip USA, Inc., 19 Cr. 279 (E.D.N.Y. June 25, 2019). The resolution is yet another example of U.S. prosecutors cooperating with foreign prosecutors, as Brazilian prosecutors entered into a simultaneous resolution with the company.
TechnipFMC is a U.S.-listed global service provider for the oil and gas industry. It formed in 2017 as the result of a merger between Technip S.A. and FMC Technologies. According to the DOJ, from 2003 and 2014, Technip USA and its co-conspirators paid $69 million to bribe Brazilian government officials and an additional $6 million to the Brazil’s Workers’ Party and the Party’s political candidates to obtain business contracts, including offshore oil platform projects, worth $135 million. In addition, the DOJ claimed that between 2008 and 2013 FMC Technologies bribed five Iraqi government officials through an intermediary company, and in return secured seven contracts to provide metering technologies for oil and gas production in Iraq, netting an additional $5.3 million in profits.
As part of the DPA, TechnipFMC admitted the DOJ’s allegations and agreed to pay a total criminal fine of $296 million, $214 million of which will be satisfied by a payment to Brazilian prosecutors. This fine was based on a 25 percent reduction from the sentencing guidelines. According to the DOJ, TechnipFMC did not voluntarily disclose the bribery schemes to U.S. authorities; however, the DOJ gave it full credit for cooperation and remediation, noting among other things that the company took disciplinary action against former and current employees involved in the bribery schemes. The fine was only reduced by 25 percent, however, because Technip S.A. was deemed a recidivist, having entered into a previous DPA in 2010 that extended into the period of the charged conduct.
Notably, TechnipFMC was not required to agree to an independent compliance monitor. Instead, it was simply required to self-report to the DOJ on its compliance program during the pendency of the DPA—a significant benefit that appears consistent with the DOJ’s shift away from presumptive monitors.