Trafigura Pleads Guilty and Will Pay $126M to Settle Brazilian Bribery Case
International commodities trading company Trafigura resolved a long-standing investigation with the U.S. Department of Justice into a bribery scheme conducted by former employees and agents to secure business with Brazil’s state-owned and controlled oil company Petroleo Brasileiro (Petrobras). The company has agreed to pay more than $126 million to resolve the investigation, highlighting that it cooperated with the Department of Justice and that the case related to activities that took place approximately 10 or more years ago.
The U.S. DOJ reports the agreement was with Trafigura Beheer and included a guilty plea to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. Trafigura will pay a criminal fine of more than $80.4 million as well as a forfeiture of more than $46.5 million. DOJ, however, will credit up to nearly $27 million of the criminal fine against amounts Trafigura is paying to resolve an investigation by law enforcement authorities in Brazil for related conduct.
“For more than a decade, Trafigura bribed Brazilian officials to illegally obtain business and reap over $61 million in profits,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division.
According to court documents, between approximately 2003 and 2014, Trafigura and its co-conspirators paid bribes to Petrobras officials in order to obtain and retain business with Petrobras. Beginning in 2009, Trafigura and its co-conspirators agreed to make bribe payments of up to 20 cents per barrel of oil products bought from or sold to Petrobras by Trafigura and to conceal the bribe payments through the use of shell companies. DOJ also reports the employees of Trafigura funneling payments through intermediaries who used offshore bank accounts to deliver cash to officials in Brazil.
The department reached this resolution with Trafigura taking into consideration the nature and seriousness of the offense as well as Trafigura’s cooperation with the department’s investigation and affirmative acceptance of responsibility. However, DOJ also contends, particularly during the early phase of the department’s investigation, 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. DOJ also believes that Trafigura was slow to exercise disciplinary and remedial measures for certain employees whose conduct violated company policy.
The current CEO of the company, Jeremy Weir, emphasized in announcing the settlement that they were historical actions that “do not reflect Trafigura’s values.” He called the actions by former employees “particularly disappointing,” while noting that the settlement draws to a close DOJ’s investigation into Trafigura.
Trafigura also engaged in remedial measures while negotiating the agreement with the DOJ. The U.S. acknowledged that the company had developed and implemented enhanced, risk-based policies and procedures relating to, among other things, anti-corruption, use of intermediaries and consultants, third-party payments, and joint venture and equity investment risk assessment. They have also enhanced employee training and compliance monitoring and controls testing processes.
It was the DOJ’s second settlement in less than a month in a long-running bribery case involving the energy sector. At the beginning of March, Swiss-based international commodities trading company Gunvor agreed to pay more than $661 million as part of a settlement and guilty plea related to allegations of bribery in Ecuador and misconduct in Congo-Brazzaville dating back in some cases more than a decade.