A logistics firm and six energy companies have agreed to pay fines for bribing foreign officials in thousands of transaction relating to the oil trade in Nigeria, Venezuela and several other countries.
The freight forwarding firm, Panalpina World Transport Holding, Ltd. a Swiss company, admitted in court that it acted as the intermediary for Royal Dutch Shell and five oil service companies in paying bribes of at least $27 million between 2002 and 2007. The companies have agreed to pay a total of $236.5 million in fines in exchange for agreements with the U.S. Department of Justice to forego criminal prosecution aimed at the companies.
The bribes were paid to the foreign officials by Panalpina who acted as an intermediary for the other companies. The bribes were routinely paid to help speed up the clearance of equipment through customs, to falsify drilling records, obtain business permits, resolve business disputes with officials and extend the amount of time on drilling contracts.
Panalpina’s role in helping oil service companies pay bribes to foreign officials was discovered in 2007 when another oil service company, Vetco International Ltd., pleaded guilty to paying Nigerian customs officials $2.1 million in bribes through the logistics company. Subsequently, the SEC and DOJ began looking at other oil service companies that were using Panalpina as an intermediary.
“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,” said Cheryl J. Scarboro, chief of the Foreign Corrupt Practices Act unit at the SEC.
Panalpina has pleaded guilty to the charges and will pay a $70.6 million criminal penalty and an $11.3 million civil penalty to the SEC. The other companies and the fines assessed by the DOJ and the SEC are: Royal Dutch Shell, a $30 million criminal penalty and $18.1 million civil penalty; Transocean, a $13.4 million criminal penalty and $7.2 million civil penalty; GlobalSantaFe, a $2.1 million criminal penalty and a $3.7 million civil penalty; Tidewater Marine, a $7.4 million criminal penalty and a $8.3 million civil penalty; Pride International, a $32.6 million criminal penalty and a $23.5 million civil penalty and Noble Corp., a $2.6 million criminal penalty and a $5.5 million civil penalty.
In 2004 the government collected about $11 million in criminal fines and penalties related to FCPA violations and charged five individuals. In 2010, the U.S. government has already collected $1 billion in fines, and currently there are 35 cases pending on FCPA charges.