Commodities company will pay US$17 million to settle investigations; scheme lasted more than 10 years, says investigation
The Swiss commodities company Trafigura pleaded guilty in a case of corruption at Petrobras. It will pay US$127 million in an agreement with the United States Court. The scheme for selling oil was discovered by Lava Jato in 2018.
The company was investigated by American authorities for 10 years on suspicion of having paid bribes to Brazilian officials to obtain advantages in transactions. In Brazil, the company was the target of Operation Sem Limites with Glencore and Vitol in December 2018.
Trafigura is suspected of moving US$6.1 million in 160 oil purchase and sale operations in Brazil. According to the US Department of Justice, the scheme operated from 2003 to 2014.
In 2009, employees from Petrobras and Trafigura began meeting in Miami, Florida, to make payments and launder the money through tax havens. At that time, the payment of US$ 0.20 in bribes per barrel of oil traded would have been agreed.
According to investigations, the company may have profited up to US$61 million from the scheme. The agreement determines the payment of up to US$26.8 million, which can be used to resolve the company's pending legal issues in Brazil.
“Today's guilty plea highlights that when companies pay bribes and undermine the rule of law, they will face significant penalties. The department remains determined to combat foreign bribery and hold those who violate the law accountable,” said U.S. Attorney Nicole Argentieri, head of the U.S. Department of Justice’s criminal division.
Justice and Trafigura reached an agreement on the fine after the company collaborated by delivering documents, detailing the scheme and facilitating employee testimonies. The company also agreed to implement internal anti-corruption measures.
How the scheme worked
Petrobras allegedly sold fuel at a higher price than the market price and sold it at a cheaper price. This difference between buying and selling was used by those investigated to obtain advantages.
International companies paid commissions to Petrobras intermediary agents in order to make it easier to buy and sell oil and oil products. The transaction values are high because, according to the PF, it was easy to make deviations since the purchase and sale of oil was not supervised.
The 3 companies were targets of the 57th phase of Lava Jato and 11 people were arrested in December 2018.
In a note released on March 28, Trafigura said it had reached the agreement through collaboration and that the conduct investigated does not comply with company standards. The group’s president, Jeremy Weir, said the investigation’s findings “are particularly disappointing”.
“We are pleased that the DOJ [Departamento de Justiça dos Estados Unidos da América] has recognized the measures we have taken to invest in our compliance program: improving our policies, procedures, processes and controls and, as of 2019, prohibiting the use of third parties to attract business. Continuous improvement of our compliance program and high standards of ethical behavior will continue to be priorities for the group”.
O Power360 sought out Petrobras to comment on the sentence, but did not receive a response until the publication of this report. The space remains open.
Here is the full note from Trafigura:
“Trafigura concluded an investigation, previously disclosed by the United States Department of Justice (“DOJ”), into the conduct of former employees and/or agents in Brazil, which occurred at least 10 years ago. This conduct was and is inconsistent with the company's principles, contractual terms and Code of Conduct.
“As part of the resolution to close the matter and under the terms of the collaboration agreement, Trafigura Beheer BV, the holding company of the Trafigura Group during the period in question, will pay a total amount of approximately US$127 million.
“As noted in the settlement, the DOJ granted credits to Trafigura “because it cooperated with the investigation and demonstrated recognition and acceptance of responsibility.” The DOJ also recognized Trafigura's proactive decision to end the “use of third-party agents” to source business in 2019 and to develop and implement “enhanced risk-based policies and procedures” for anti-corruption and compliance monitoring when making the decision not to appoint an independent auditor.
“The collaboration agreement ends the DOJ investigation related to Trafigura.
“Jeremy Weir, chief executive and CEO of Trafigura, said: “These past incidents do not reflect Trafigura's values or the conduct we expect from every employee. They are particularly disappointing given our ongoing efforts over many years to embed a culture of responsible conduct at Trafigura.”
“'We are pleased that the DOJ has recognized the steps we have taken to invest in our compliance program: enhancing our policies, procedures, processes and controls and, beginning in 2019, prohibiting the use of third parties to source business. Continuous improvement of our compliance program and high standards of ethical behavior will continue to be priorities for the Group'.”
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