SBM Offshore to Pay $238 Million in Bribery Case Spanning Five Countries

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November 30, 2017

File photo: SBM Offshore

Netherlands-based offshore company SBM Offshore and its U.S. subsidiary SBM Offshore USA have reached an agreement to pay a criminal penalty of $238 million to resolve criminal charges in the U.S. in connection with schemes involving the bribery of foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq, the Justice Dept. announced Wednesday.

SBM Offshore USA pleaded guilty on Wednesday to violation Foreign Corrupt Practices Act (FCPA) in connection with the resolution.

“This corrupt scheme involved some of the highest-level executives within the company, spanned five countries, and lasted for more than a decade,” said Acting Assistant Attorney General Cronan. “The resolution announced today demonstrates the Criminal Division’s continuing commitment to work closely with our foreign partners to hold both companies and individuals accountable for their actions as we continue to level the playing field for ethical and honest businesses to compete in the marketplace.”

SBM entered into a deferred prosecution agreement in connection with a criminal information filed Thursday in the Southern District of Texas charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.

In addition, SBM USA pleaded guilty and was sentenced by Judge Hittner on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.

Pursuant to its agreement with the Department, SBM agreed to pay a total criminal penalty of $238 million to the United States, including a $500,000 criminal fine and $13.2 million in criminal forfeiture that SBM agreed to pay on behalf of SBM USA.

According to the companies’ admissions and court documents, beginning by at least 1996 and continuing until at least 2012, SBM conspired to violate the FCPA by paying more than $180 million in commissions to intermediaries, knowing that a portion of those commissions would be used to bribe foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq.

“SBM made these payments in order to influence those officials, for the purpose of securing improper advantages and obtaining or retaining business with state-owned oil companies in the five named countries. SBM acknowledged that it gained at least $2.8 billion from projects it obtained from these state-owned oil companies,” the Justice Dept. said in a statement.

The Justice Department resolution follows guilty pleas by two former SBM executives. On Nov. 9, Anthony Mace, the former CEO of SBM and a former member of the board of directors of SBM USA, pleaded guilty to one count of conspiracy to violate the FCPA. On Nov. 6, Robert Zubiate, a former SBM USA executive, pleaded guilty to one count of conspiracy to violate the FCPA. Mace and Zubiate are awaiting sentencing.

In 2014, SBM settled with the Dutch Public Prosecutor’s Office over related conduct and paid the Netherlands a total $200 million in disgorged profits and a $40 million fine. SBM has paid a combined worldwide total in criminal penalties in excess of $475 million.

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