On Friday, the Department of Justice announced a major Foreign Corrupt Practices Act (FCPA) settlement with Keppel Offshore & Marine Ltd., a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary Keppel Offshore & Marine USA Inc. The companies agreed to pay a combined total penalty of more than $422 million to resolve charges by the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil. It is one of the largest FCPA settlements on record.See DOJ Press Release.
According to guilty pleas from the company and certain executives, from at least 2001 through 2014, Keppel paid roughly $55 million in bribes to officials at the Brazilian state-owned oil company Petrobras and to the then-governing political party in Brazil, in order to win 13 contracts with Petrobras and another Brazilian entity. Keppel concealed the bribe payments through “commissions” it paid to an intermediary, disguising them as legitimate consulting payments, but which were simply passed through as payments to the Brazilian officials and the Brazilian political party.
Under the settlement, Keppel will pay a total criminal fine of $422 million, with a criminal penalty due to the United States of roughly $106 million. In related proceedings, the company settled with the Ministério Público Federal in Brazil and the Attorney General’s Chambers in Singapore. The United States will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving roughly $211 million and Singapore receiving up to $106 million. The U.S. criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range because of what the government considered Keppel’s substantial cooperation and efforts to take extensive remedial actions, including terminating or disciplining implicated employees.
In announcing the settlement, the government trumpeted its collaboration with foreign authorities in enforcing the foreign bribery laws: “the Criminal Division is committed to working with our international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.” The case is the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil.
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