Trafigura Beheer B.V. (Trafigura), an international commodities trading company headquartered in Switzerland, recently pled guilty to a foreign bribery scheme. The investigation, conducted by the U.S. Department of Justice (DOJ), focused on violations of the Foreign Corrupt Practices Act (FCPA). This case emerged as a result of the DOJ’s investigation into business deals with Petróleo Brasileiro S.A. – Petrobras (Petrobras), Brazil’s state-owned and state-controlled oil company.
The Bribery
The bribery spanned over a decade from roughly 2003 to 2014. During this period, Trafigura and its co-conspirators engaged in bribery of Petrobras officials to gain and retain business contracts. Starting in 2009, bribes were structured around a per-barrel payment arrangement, with Trafigura agreeing to pay up to 20 cents per barrel of oil products bought from or sold to Petrobras. To conceal these illicit kickbacks, Trafigura used shell companies and intermediaries who operated offshore bank accounts to funnel cash to the officials in Brazil. The scheme yielded Trafigura approximately $61 million in profits.
DOJ Reaction to Plea
Principal Deputy Assistant Attorney General Nicole M. Argentieri, who leads the Justice Department’s Criminal Division, underscored the gravity of Trafigura’s actions. According to Argentieri, “[Trafigura’s] guilty plea underscores that when companies pay bribes and undermine the rule of law, they will face significant consequences. The department remains steadfast in its commitment to combat foreign bribery and hold accountable those who violate the law.”
Mitigating and Aggravating Factors
Notably, the DOJ gave some credit to Trafigura’s remedial efforts. The company provided timely updates on its internal investigation, facilitated interviews with employees and agents, and produced relevant documents and data to the DOJ. The DOJ also noted that Trafigura implemented remedial measures aimed at bolstering its compliance framework and mitigating the risk of future misconduct. These measures included the development and implementation of enhanced, risk-based policies and procedures, investment in employee training, and the discontinuation of the use of third-party agents for business origination.
However, Trafigura’s initial failure to preserve and produce certain evidence in a timely manner, coupled with inconsistent cooperation, posed challenges during the early stages of the investigation. Trafigura also faced criticism for its delayed disciplinary actions against employees involved in the misconduct.
Trafigura’s history of prior misconduct, compounded the severity of its actions in the bribery scheme. While Trafigura ultimately acknowledged its criminal conduct and engaged in remediation efforts, the company’s initial resistance in negotiation discussions resulted in significant delays and resource expenditures for the DOJ.
The Fine
The DOJ reached a plea agreement regarding Trafigura’s activities, under which Trafigura is required to pay over $126 million to settle FCPA charges. This encompasses a criminal fine of $80,488,040 and forfeiture of $46,510,257. Notably, a portion of the criminal fine will be credited against amounts Trafigura may pay to Brazilian authorities for related misconduct.
In conclusion, the Trafigura scandal serves as a stark reminder of the far-reaching consequences of corporate bribery and corruption. The case underscores the importance of robust compliance programs and ethical business practices in safeguarding against such illicit activities. As enforcement agencies continue to crack down on foreign bribery, companies must remain vigilant in upholding integrity and transparency in their operations to avoid facing similar legal repercussions.
Article written by Kara Ekeh, FTI Law Global Intern
