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DOJ Catch of the Week: Trafigura Beheer

Posted  April 1, 2024

Last Thursday (March 28), the Department of Justice (DOJ) announced that Swiss-based international commodities trading company Trafigura Beheer B.V. pleaded guilty and agreed to pay roughly $126 million to settle charges of violating the Foreign Corrupt Practices Act (FCPA).  The DOJ’s action stemmed from Trafigura’s scheme to bribe Brazilian government officials to secure business with Brazil’s state-owned and controlled oil company, Petróleo Brasileiro S.A. – Petrobras.

The FCPA bars payments to foreign officials for any kind of business advantage, such as securing government contracts or other kinds of favorable business treatment.  The statute covers any form of consideration including gifts, meals, travel, and entertainment.  It also imposes strict record-keeping and internal control requirements to prevent falsifying company books and records to disguise foreign bribes.  Enforcing the FCPA is a perennial priority for DOJ and the Securities and Exchange Commission (SEC), the agencies with primary responsibility for enforcing the statute.

According to the government and court documents, Trafigura and its co-conspirators made bribes of up to 20 cents per barrel of oil products bought from or sold to Petrobras by Trafigura.  These payments were apparently concealed through shell companies and by funneling them through intermediaries who used offshore bank accounts to deliver cash to officials in Brazil.  The scheme resulted in Trafigura earning roughly $61 million in profits.

Notably, this was the second FCPA settlement in March against a Swiss-based commodities trading company.  On March 1, DOJ announced a $661 settlement with Gunvor S.A. to settle charges it violated the FCPA by bribing Ecuadorean officials to secure business with Ecuador’s state-owned oil company Petroecuador.  Together, these two settlements alone exceed the $748 million in total FCPA settlements last year.

The government used the settlement to reinforce its commitment to going after foreign bribery in whatever form it takes.  DOJ Criminal Chief Nicole M. Argentieri underscored the “significant penalties” companies will face for bribing foreign officials and how DOJ “remains determined to combat foreign bribery and hold accountable those who violate the law.”  Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division echoed this sentiment, reinforcing the “steep penalties for any company that tries to bribe government officials.”

It is not clear whether any whistleblowers were involved in helping the government go after Trafigura.  Typically, whistleblowers play an important role in uncovering FCPA violations, which are often difficult to detect because of the sophisticated schemes at play to disguise the illicit payoffs.  Depending on the nature of the violation and the agency involved in bringing the enforcement action, whistleblowers may be entitled to a sizeable portion of the government’s recovery under the False Claims Act or SEC Whistleblower Program.

So if you think you might have information relating to potential FCPA violations, please do not hesitate to contact us.  We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consult.