Swiss Firm Pleads Guilty to FCPA Violations, Will Pay Over $126M

Switzerland-based international commodities trading firm Trafigura Beheer will pay over $126 million after pleading guilty to violating the Foreign Corrupt Practices Act by bribing Brazilian government officials to obtain business with state-owned oil company Petrobras, DOJ announced.

Under the plea agreement, Trafigura will pay an over $80 million fine and an over $46.5 million forfeiture. DOJ said it would credit up to around $26.8 million of the criminal fine against numbers the company will pay to settle an investigation by Brazilian authorities for "related conduct."

Trafigura ran its bribery scheme from 2003 to 2014, though DOJ said that the commodities trader met with its co-conspirators in Miami in 2009, where they agreed to "make bribe payments" of up to 20 cents per barrel of oil products bought from or sold to Petrobras by Trafigura. Trafigura and its co-conspirators discussed hiding the bribes by using shell companies and "funneling payments through intermediaries who used offshore bank accounts to deliver cash to officials in Brazil."

In all, the company received around $61 million from the scheme, DOJ said.

The agency said the firm received credit for its cooperation with the investigation and its "acceptance of responsibility." This cooperation included "timely updates on facts learned during its internal investigation," facilitating interviews of employees and agents, "producing relevant non-privileged documents and data to the department" and providing "all relevant facts known to it."

However, DOJ noted that "Trafigura failed to preserve and produce certain documents and evidence in a timely manner and, at times, took positions that were inconsistent with full cooperation."

The agency also said Trafigura took steps to improve compliance programs, including by bolstering its "risk-based policies and procedures," enhancing controls on "high-risk transactions," allocating more resources for employee training and compliance testing and "proactively discontinuing the use of third-party agents for business origination."

Despite those steps, DOJ said Trafigura "was slow to exercise disciplinary and remedial measures for certain employees whose conduct violated company policy."

Trafigura CEO Jeremy Weir said in a statement that the FCPA violations "do not reflect Trafigura’s values nor the conduct we expect from every employee." The firm is "pleased the DOJ recognised the steps we have taken to invest in our compliance function: enhancing our policies, procedures, processes and controls and from 2019, prohibiting the use of third parties for business origination," Weir said. "Continuous improvement of our compliance programme and high standards of ethical behaviour will remain priorities for the Group.”