Trafigura pleads guilty, to pay $127M over FCPA violations in Brazil

The company pleaded guilty to one count of conspiracy to violate the FCPA and was assessed a criminal penalty of approximately $80.5 million and forfeiture of about $46.5 million, the DOJ announced in a press release Thursday. The agency agreed to credit about $26.8 million of the criminal fine against amounts Trafigura pays to resolve related investigations by Brazilian authorities.

Trafigura disclosed in December it expected to pay $127 million related to the matter, which primarily occurred more than a decade ago.

The details: Between approximately 2003 and 2014, Trafigura and its co-conspirators paid bribes to Petrobras officials to obtain and retain business with the Brazilian state-owned oil company, according to the DOJ.

The bribes, which were concealed through the use of shell companies and intermediaries using offshore bank accounts, netted Trafigura profits of approximately $61 million, the agency noted.

Compliance considerations: Trafigura received credit for its cooperation and acceptance of responsibility, despite the company having prior history related to a 2006 entry-of-goods guilty plea and 2010 conviction for violating Dutch environmental laws by discharging petroleum waste in Côte d’Ivoire.

The DOJ said it positively considered the company’s timely updates, production and translation of certain documents, and provision of certain employees for interview. Trafigura’s remedial measures included enhancing its risk-based policies and procedures for anti-corruption; investment of additional resources in employee training and compliance testing; and discontinuing the use of third-party agents for business origination, which it did in 2019.

The company was faulted early in the investigation for failing to preserve and produce certain documents and evidence, being slow to exercise disciplinary measures against certain employees found to have violated company policy, and requiring the DOJ to expend its own resources to develop additional admissible evidence before reengaging on cooperation.

The criminal fine total reflected a 10 percent reduction off the fifth percentile of the applicable guidelines fine range.

Company response: “These historical incidents do not reflect Trafigura’s values nor the conduct we expect from every employee,” said Trafigura Chief Executive Jeremy Weir in a statement. “They are particularly disappointing given our sustained efforts over many years to embed a culture of responsible conduct at Trafigura.

“We are pleased the DOJ recognized the steps we have taken to invest in our compliance function. … Continuous improvement of our compliance program and high standards of ethical behavior will remain priorities for the group.”