Major Shipment - Customs Cases Bring In $236.5 Million

The pipeline that contains pending FCPA enforcement actions burst yesterday as the DOJ and SEC announced enforcement actions against 13 separate entities.

In enforcement actions that have long been anticipated, Panalpina entities, as well as several others, settled DOJ and SEC enforcement actions principally focused on customs and related payments in Nigeria, but also including alleged improper conduct in Angola, Brazil, Russia, Kazakhstan, Venezuela, India, Mexico, Saudi Arabia, the Republic of Congo, Libya, Azerbaijan, Turkmenistan, Gabon and Equatorial Guinea.

The combined DOJ/SEC settlement amounts total $236.5 million.

Your FCPA scorecard thus shows that since June 28th, the U.S. government has brought FCPA enforcement actions totaling approximately $1.1 billion. With numbers like these, aggressive FCPA enforcement based on, often times, dubious legal theories (more on that later) seems like the most profitable government program ever conceived.

Set forth below is a basic overview of the settlements. A more thorough review of the hundreds of pages of relevant documents will be forthcoming.

The DOJ resolution documents can be found here, the SEC resolution documents here.

Panalpina Entities

DOJ

Entities: Panalpina World Transport (Holding) Ltd. and Panalpina Inc.

Resolution Vehicles: Criminal information charging Panalpina World Transport(Holding) with conspiracy to violate and violating the FCPA's anti-bribery provisions. Charges resolved through a deferred prosecution agreement. Criminal information charging Panalpina Inc. with conspiracy to violate the FCPA's books and records provisions and aiding and abetting certain customers in violating the FCPA's books and records provisions. Charges resolved through a plea agreement.

Countries: Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia, and Turkmenistan

Penalty: Combined $70.56 million

SEC

Entity: Panalpina, Inc.

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery violations, aiding and abetting FCPA anti-bribery violations, and FCPA books and records and internal controls violations.

Countries: Nigeria, Angola, Brazil, Russia, and Kazakhstan

Disgorgement: $11,329,369

Pride Entities

DOJ

Entities: Pride International Inc. and Pride Forasol S.A.S.

Resolution Vehicle: Criminal information charging Pride International with conspiracy to violate the FCPA's anti-bribery provisions and books and records provisions; violating the FCPA's anti-bribery provisions; and violating the FCPA's books and records provisions. Charges resolved through a deferred prosecution agreement. Criminal information charging Pride Forasol with conspiracy to violate the FCPA's anti-bribery provisions; violating the FCPA's anti-bribery provisions; and aidng and abetting violations of the FCPA's books and records provisions. Charges resolved through a plea agreement.

Countries: Venezuela, India and Mexico

Penalty: $32.625 million (combined)

SEC

Entity: Pride International Inc.

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery violations, FCPA books and records and internal controls violations.

Countries: Venezuela, India, Mexico, Kazakhstan, Nigeria, Saudi Arabia, Republic of Congo, and Libya

Disgorgement and interest: $23,529,718

Tidewater Entities

DOJ

Entities: Tidewater Marine International Inc., Tidewater Inc.

Resolution Vehicle: Criminal information charging Tidewater Marine with conspiracy to violate the FCPA's anti-bribery and books and records provisions and violating the FCPA's books and records provisions. Charges resolved through a deferred prosecution agreement with Tidewater that requires, among other things, Tidewater Marine to pay a $7.35 million criminal penalty.

Countries: Azerbaijan and Nigeria

Penalty: $7.35 million

SEC

Entity: Tidewater Inc.

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery violations, FCPA books and records and internal controls violations

Countries: Nigeria, Azerbaijan

Disgorgement: $8,104,362

Civil Penalty: $217,000

Transocean Entities

DOJ

Entities: Transocean Inc. and Transocean Ltd.

Resolution Vehicle: Criminal information charging Transocean Inc. with conspiracy to violate the FCPA's anti-bribery and books and records provision; violating the FCPA's anti-bribery provisions; and aiding and abetting the FCPA's books and records provisions. Charges resolved through a deferred prosecution agreement with Transocean Ltd. that requires, among other things, Transocean Inc. to pay a $13.44 million criminal penalty.

Countries: Nigeria

Penalty: $13.44 million

SEC

Entity: Transocean Inc.

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery violations, FCPA books and records and internal controls violations

Countries: Nigeria

Disgorgement and interest: $7,265,080

GlobalSantaFe Corp.

SEC

Entity: GlobalSantaFe Corp.

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery provisions, FCPA books and records and internal controls violations

Countries: Nigeria, Gabon, Angola, Equatorial Guinea

Disgorgement: $3,758,165

Civil Penalty: $2.1 million

Noble Corporation

DOJ

Entity: Noble Corporation

Resolution Vehicle: Non-proseuction agreement in which Noble Corporation: (i) acknowledged that certain of its employees knew that payments would be passed on as bribes to Nigerian customs officials; and (ii) admitted that the company falsely recorded the bribe payments as legitimate business expenses.

Countries: Nigeria

Penalty: $2.59 million

SEC

Entity: Noble Corporation

Resolution Vehicle: Settled civil complaint charging FCPA anti-bribery violations, FCPA books and records and internal controls violations

Countries: Nigeria

Disgorgement and interest: $5,576,998

Royal Dutch Shell Entities

DOJ

Entities: Royal Dutch Shell plc and Shell Nigeria Exploration and Production Company Ltd. ("SNEPCO")

Resolution Vehicle: Criminal information charging SNEPCO with conspiracy to violate the FCPA's anti-bribery and books and records provisions and with aiding and abetting the FCPA's books and records provisions resolved through a deferred prosecution agreement with Royal Dutch Shell Plc requiring, among other things, SNEPCO to pay a $30 million criminal penalty

Countries: Nigeria

Penalty: $30 million

SEC

Entity: Royal Dutch Shell plc and Shell International Exploration and Production Inc ("SIEP").

Resolution Vehicle: Administrative cease and desist order finding FCPA books and records and internal control violations by Royal Dutch Shell and FCPA anti-bribery violations by SIEP

Countries: Nigeria

Disgorgement: $18,149,459

*****

According to the SEC release (here), Cheryl Scarboro, Chief of the SEC's FCPA Unit stated: "This investigation was the culmination of proactive work by the SEC and DOJ after detecting widespread corruption in the oil services industry. The FCPA Unit will continue to focus on industry-wide sweeps, and no industry is immune from investigation."

The SEC release further states: [t]his is the first sweep of a particular industrial sector in order to crack down on public companies and third parties who are paying bribes abroad."