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Samsung Heavy Industries Settles Petrobras FCPA Matter for USD 75 Million

On Friday, 22 November 2019, the U.S. Department of Justice (“DOJ”) announced its settlement with South Korean engineering company Samsung Heavy Industries Company Limited (“SHI”) regarding a claim that the company conspired to pay bribes to officials of the Brazilian state-controlled oil company Petrobras. Under the settlement, SHI is to pay a total criminal penalty of USD 75’481’600 – half to the United States, half to Brazilian authorities.

The claim stems from the company’s efforts to secure the sale of an offshore oil drillship to a Houston-based oil drilling company. The sale depended on the drilling company’s obtaining a contract to charter the ship to Petrobras. To ensure that outcome, SHI paid agents in Brazil approximately USD 20 million, knowing that a portion of that money would be used to bribe officials at Petrobras. As a result, SHI was able to sell the ship at a price of more than USD 636 million.

Under its deferred prosecution agreement with the DOJ, SHI will pay USD 37’740’800 to the United States Treasury and another USD 37’740’800 to Brazil. The total penalty represents a 20% reduction from the low end of the applicable U.S. Sentencing Guidelines penalty range. SHI received partial credit for its cooperation, which included a thorough internal investigation, production of relevant documents, regular factual presentations, and making witnesses available for interviews, but was denied full credit due to its failure to meet deadlines and delays it caused in reaching a resolution. This case clearly shows that authorities strictly prosecute and fine even indirect corruption through instigation, aiding and abetting.

More information:
DOJ Press release: https://www.justice.gov/opa/pr/samsung-heavy-industries-company-ltd-agrees-pay-75-million-global-penalties-resolve-foreign
Deferred Prosecution Agreement: https://www.justice.gov/opa/press-release/file/1219891/download

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