Brazilian aircraft-company Embraer said this week that it is seeking to finalize agreements with the Department of Justice and the Securities and Exchange Commission to resolve allegations of criminal and civil violations of the Foreign Corrupt Practices Act.
According to Embraer, the company received a subpoena in September 2010 from the SEC and associated inquiries from the Department of Justice concerning possible non-compliance with the FCPA in relation to certain aircraft sales outside of Brazil. In response, the company retained outside counsel to conduct an internal investigation of sales in three countries.
In light of additional information, Embraer said it voluntarily expanded the scope of the internal investigation to include sales in other countries and reported these matters to U.S. authorities.
“We expect that the final agreements, if they are finalized, will be consistent with our prior disclosure made on July 29,” the company stated. That disclosure mentioned a deferred prosecution agreement and the appointment of an independent monitor to assess the company's compliance with the terms of any agreement that may be reached.
“We will continue to cooperate with all relevant authorities.”
Embraer said it’s also seeking to finalize agreements with the Brazilian Federal Public Prosecutor’s Office (Ministério Público Federal) and the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários) for the settlement of the allegations of non-compliance with certain Brazilian laws.
In July 2016, Embraer said that it has “embarked on a comprehensive effort to improve and expand our compliance program worldwide” in light of the internal investigation. “This multi-year task involved reexamining every aspect of our compliance systems, and where appropriate, redesigning or adding to them,” the company said.
Some of the key enhancements include:
Creation of a compliance department;
Appointment of a chief compliance officer, reporting to Embraer’s general counsel, which, for these matters, reports directly to the risk and audit committee;
The development of a program to monitor engagement of and payments to third parties;
Improvements to compliance policies, procedure and controls;
Enhancement of anonymous and other reporting channels; and
Development of a comprehensive training and education program designed to maintain and reinforce a strong compliance culture at all levels of Embraer globally.
Embraer said it “will continue to promote enhancements and update its compliance program.”