Cash in hand: Clamp
The US Securities and Exchange Commission and the Department of Justice have stepped up their enforcement of the Foreign Corrupt Practices Act, a federal statute that prohibits the payment of bribes to a foreign government official. For the first time ever, the DOJ has taken criminal enforcement action under the Act against a foreign issuer of securities in the US market, Norway-based oil and gas company Statoil.
“By enforcing the FCPA, and by encouraging our counterparts around the world to enforce their own anti-corruption laws, we are making sure that your competitors do not gain an unfair advantage when competing for business overseas,” Alice Fisher, assistant attorney general of the US, told an American Bar Association conference in Washington, DC, in October. “And we are ensuring the integrity of our markets at home so that investors will continue to invest in your companies,” she said.
In 2001, when Statoil began looking for opportunities to develop oil and gas resources in Iran, it entered into a consulting contract with an Iranian official who claimed to have influence with the Iranian oil ministry. According to Fisher, Statoil made payments to the official through a New York bank totaling $5.2 million. “Statoil failed to properly account for these payments in its books and records, and Statoil senior management circumvented the company’s internal controls in order to pay the bribes,” she said.
To resolve this matter, Fisher said, Statoil has acknowledged its criminal conduct, agreed to a $10.5 million criminal penalty and entered into a three-year deferred prosecution agreement, which includes a requirement that Statoil hire an FCPA compliance consultant.
Meanwhile, the US Senate recently approved the UN Convention Against Corruption, which was signed by 140 countries. The convention requires those countries to criminalize bribery of domestic and foreign public officials.