SBM Offshore FCPA case ends, Swiss investigation begins

In November 2017, SBM Offshore and its wholly owned U.S. subsidiary SBM Offshore USA agreed to a $238 million criminal penalty in connection with a widespread bribery scheme involving foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan, and Iraq in violation of the FCPA. SBM USA also pleaded guilty in connection with the resolution.

Three years later, SBM Offshore said Monday the DPA signed with the Department of Justice ended without extension. In that same statement, however, the company revealed three of its subsidiaries received a notification from Bundesanwaltschaft (the Office of the Attorney General of Switzerland) concerning suspicion that the subsidiaries “failed to take the necessary measures to prevent the execution of corrupt payments” during the period from 2005-12.

SBM Offshore said the notification refers to the legacy settlements the company concluded in the Netherlands in 2014 and Brazil in 2018, as well as the DPA with the United States. “The suspicion regarding the compliance controls’ shortcoming relate to payments covered by these agreements,” the company said.

“The completion of our reporting to the Department of Justice marks the strength of the control measures the company put in place,” SBM Offshore Chief Governance and Compliance Officer Erik Lagendijk said in a statement. “We did not expect this development in Switzerland as Swiss authorities have been involved in the matter from the time of the settlement in the Netherlands in 2014. We will engage with the Swiss public prosecutor and seek clarification.”

Recent compliance enhancements

In its 2019 annual report, the company provided further details on the extent to which its compliance program has matured. “Overall, the compliance program is deemed to be transitioning from ‘compliance culture’ to the ‘beyond compliance’ level, although certain elements of the compliance program, notably the focus on responsible leadership behavior, fall within the ‘value-led business’ maturity level,” SBM Offshore said.

In 2019, the company achieved the following, among other developments:

Implementation of the digital SBM Offshore compliance platform: Systematic deployment of the third-party management process (due diligence and continuous monitoring), the annual compliance certification process, and e-learning dissemination to designated staff and completion monitoring.

Extension of two-day compliance leadership program: First introduced in 2018, the “Leading Responsibly” program is aimed at “newly hired business leaders and the next level of top leaders, with the objective to strengthen abilities to manage compliance risks today and tomorrow.”

Deployment of new employee face-to-face training program: A new training program covering conflicts of interest, fraud, confidential information, and speaking up on compliance-related matters has been deployed to further support the code of conduct.

Strengthening staffing of group risk & compliance function (GRCF): The GRCF has been expanded “with a compliance officer in Brazil and a data analyst in Amsterdam, to progress to data-driven compliance.”

Compliance risk assessments: Country risk assessments on high-risk and new-entry countries are being performed, including the risks associated with compliance. Compliance risks in Brazil are also being continuously assessed, and a “dedicated fraud risk assessment to identify opportunities for risk control enhancements” is also being performed.

Compliance third-party monitoring: Enhancements include execution of the 2019 third-party monitoring and audit plan; digitalization of third-party management to optimize the due diligence process, including potential M&A targets, and enable continuous monitoring; and the review of joint venture payment controls.