View as PDF
View as PDF
Extractive Industries/Mining/Oil & Gas
Rome, Italy
Nationality of Foreign Officials: Algeria
Summary of Allegations:
The Public Prosecutor of Milan also informed Eni on 4 February 2011, of a request for documents related to the Saipem/Sonatrach contract of June 2009 concerning ground engineering on the GK3 gas pipeline.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Iraq, Kuwait
Summary of Allegations:
A search warrant was issued to search the offices and homes of employees of the Eni Zubair group and one Saipem manager, on 21 June 2011. In Eni's Form 20-F filing with the SEC on 5 April 2012, the company states, "The accusation is of criminal conspiracy and corruption in relation with the activity of Eni Zubair in Iraq and of Saipem in the 'Jurassic' project in Kuwait. The Public Prosecutor of Milan as associated Eni Zubair, Eni and Saipem with the accusations as a result of the alleged illicit actions of their employees." Eni claims that neither Eni SpA nor Eni Zubair had anything to do with the illicit conduct, that it was disloyal, rogue employees who engaged in corrupt behavior. Eni therefore hired outside auditors to conduct an audit of related issues. Meanwhile, Eni's internal review revealed no problems, and so one of the suspect employees, who had been discharged by Saipem, was reemployed in a different capacity. On 2 March 2012, Saipem SpA was notified by the Public Prosecutor (of Milan) that the investigation would continue.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Kazakhstan
Summary of Allegations:
In November 2007, the company's subsidiary Agip KCO NV became the subject of an inquiry by the Public Prosecutor of Kazakhastan concerning bribes paid in connection to a contract awarded to the Overseas International Constructors GmbH. In April 2010, a settlement was proposed, but then on 4 March 2011, the Finance Police of Kazakhstan agreed to dismiss the matter altogether. However, the Public Prosecutor of Milan is investigating the matter, having requesting documents from Eni. The tax police of Milan asked to interview Eni managers connected with Agip KCO and the NCC and OIC consortia. This investigation is ongoing.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Libya
Summary of Allegations:
On 10 June 2011, the SEC served Eni with a subpoena for the collection of documents relating to Eni's activity in Libya between 2009 and 2011. No allegations more specific than "certain illicit payments to Libyan officials" have been made, but in December 2011, the SEC expanded the scope of the subpoenaed documents. According to Eni's SEC Form 20-F filed on 5 April 2012, the company is cooperating fully with the SEC.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Nigeria
Summary of Allegations:
Snamprogetti was part of the four-company "TSKJ" joint venture [Technip of France; Snamprogetti; KBR of the U.S.; and JGC Corporation of Japan] that was alleged to have paid hundreds of millions in bribes to Nigerian officials between 1995 and 2004 in order to secure four engineering, procurement and construction (EPC) contracts for the development of liquefied natural gas facilities on Bonny Island in Nigeria. The joint venture operated in Nigeria through three Portuguese special purpose corporations. The value of the contracts to TSKJ was over USD 6 billion.
Snamprogetti allegedly authorized the joint venture's hiring of two agents (Jeffrey Tesler and a Japanese trading company) through which improper payments were made to various Nigerian government officials, including top-level executive branch officials. The joint venture paid over USD 180 million to these two agents during the course of the bribery scheme.
During the time period at issue, Snamprogetti, which is headquartered in Amsterdam, was a wholly-owned subsidiary of Snamprogetti SpA, an Italian EPC company headquartered in Milan. Snamprogetti SpA was a wholly-owned subsidiary of Eni SpA. Snamprogetti was merged into Saipem SpA ("Saipem") in 2008. Eni holds a 43% stake in Saipem. Eni itself is 30% owned by the Italian government. Eni became a U.S. issuer in 1995.
Allegations of bribery unrelated to the TSKJ consortium have also arisen.
Approximate Alleged Payments to Foreign Officials: A portion of over USD 180 million paid to two agents
Business Advantage Allegedly Obtained: Four EPC contracts, valued at USD 6 billion
Agencies: African Development Bank
Results:
Year Resolved: 2014
Compliance Monitor:
Ongoing: No
Details:
On 2 June 2014, Snamprogetti agreed to pay the Africa Development Bank USD $5.7 million in penalties for bribery related to contracts for liquefied natural gas production plants on Bonny Island, Nigeria.
Agencies: Italy: Milan Public Prosecutor's Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
The long-running matter with the Milan Public Prosecutor's Office remains ongoing. On 31 July and 12 August 2009, complaints were served on Saipem/Snamprogetti, but procedural issues relating to the admission of evidence and the application of conflicting statutes of limitations prevented the case from moving forward. In a 26 January 2011 hearing, the public prosecutor served indictments on five former employees; preliminary hearings took place in May 2011. Then, on 2 February 2012, it was determined that the statute of limitations conflict between Italian law and the requirements of the OECD convention must be addressed, and at a subsequent hearing, on 8 March 2012, resolution of the issue was postponed until 5 April 2012. Meanwhile, information published in ENI's 20-F filed with the SEC on 5 April 2012 revealed that on 24 January 2012 the Judge for Preliminary Hearings set aside part of the proceedings, dismissing the case as against nine employees and former employees of Eni (relating to failure to pay excise duties). The tax authorities reduced the amount originally claimed by the public prosecutor to EUR 114 million in unpaid taxes.
Agencies: Kazakhstan: Public Prosecutor of Kazakhastan
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
The investigation is ongoing.
Agencies: Nigeria: Economic and Financial Crimes Commission
Results: Criminal Fine, Non-Prosecution Agreement, Prosecution of Individuals
Year Resolved: 2010
Compliance Monitor:
Ongoing: No
Details:
The press reported that Nigeria's Economic and Financial Crimes Commission ("EFCC") had arrested ten Halliburton employees in Nigeria during a raid of the offices of Halliburton Energy Services Nigeria Limited in Lagos on 25 November 2010. The EFCC also arrested one employee each from Saipem Contracting Nigeria and Technip Offshore Nigeria. On 7 December 2010, the EFCC reportedly filed corruption charges against Halliburton, former U.S. Vice President Dick Cheney (who was the CEO of Halliburton during the period at issue), Albert Stanley (former CEO of KBR), David Lesar (current CEO of Halliburton) and William Utt (current CEO of KBR). Technip, Snamprogetti and JGC Corp. were reportedly also charged on the same day. The case number is Federal Republic of Nigeria v. Halliburton and others, CV/435/10, High Court of Justice, Abuja Judicial Division (Abuja).
According to press reports, on 15 December 2010, Halliburton and the EFCC reached a USD 250 million settlement agreement to resolve the charges. Halliburton will pay USD 120 million in penalties and USD 130 million in frozen assets in Switzerland will be repatriated to Nigeria. In exchange, Nigeria dropped the charges. Former U.S. President George H. W. Bush and former Secretary of State James Baker reportedly assisted with the negotiations.
On 20 December 2010, Saipem announced that Snamprogetti had entered into a settlement agreement and non-prosecution agreement with the Federal Government of Nigeria to resolve the investigation. Snamprogetti agreed to the payment of a criminal penalty of USD 30 million, along with USD 2.5 million in reimbursement for legal costs and expenses incurred by the Nigerian authorities. Nigeria agreed to dismiss all charges against Snamprogetti and to renounce to any civil claims and criminal charges in any jurisdiction.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results: Civil Injunction, Criminal Fine, Deferred Prosecution Agreement, Disgorgement
Year Resolved: 2010
Compliance Monitor:
Ongoing: No
Details:
In February 2009 Halliburton and KBR settled FCPA charges related to its involvement in the scheme, resulting in USD 579 million in combined penalties. The DOJ and SEC have been investigating other joint venture partners since. On 28 June 2010, Technip settled with the DOJ and SEC for a total of USD 338 million in penalties.
On 7 July 2010, the DOJ filed a deferred prosecution agreement and two-count information against Snamprogetti in U.S. District Court for the Southern District of Texas, charging the company with one count of conspiracy and one count of aiding and abetting violations of the FCPA. Under the terms of the two-year deferred prosecution agreement, Snamprogetti agreed to pay a USD 240 million criminal fine and Snamprogetti, Saipem and Eni agreed to ensure that their compliance programs satisfied certain standards and agreed to cooperate with the DOJ's ongoing investigations.
On the same day, Snamprogetti and Eni reached a settlement of a related civil complaint with the SEC. Snamprogetti was charged with violating the FCPA's anti-bribery provisions, falsifying books and records and circumventing internal controls . Eni was charged with violating the FCPA's books and records and internal controls provisions. Without admitting or denying the SEC's allegations, the companies agreed to the entry of court orders permanently enjoining them from future violations of the respective securities law provisions. Snamprogetti and Eni agreed to jointly pay USD 125 million in disgorgement of profits and prejudgment interest.
At the conclusion of the two-year deferral period, on 19 September 2012, all charges against the Company in the U.S. were dropped, definitively concluding U.S. criminal proceedings against Snamprogetti Netherlands BV for conduct connected with the TSKJ consortium's work on Bonny Island. In a press release announcing dismissal of the charges, the Company listed its anti-corruption accomplishments, including the application of "groundbreaking anti-corruption control systems" and becoming "an international reference for best practices in anti-corruption. "
The DOJ and SEC will pursue FCPA violations committed by U.S. and foreign companies alike.
Information obtained by the DOJ and SEC from one cooperating company will likely be utilized to investigate and prosecute other entities implicated in the same or related conduct.