Petrobras pays $682M in Brazil as part of 2018 bribery settlement

  • Business & Finance

Brazilian oil major Petrobras has said it has paid $682.6 million as part of the non-prosecution settlements entered into last year with the U.S. and Brazilian authorities over the investigation into violations of the Foreign Corrupt Practices Act (FCPA).

Petrobras HQ in Rio de Janeiro; Image by Marinelson Almeida Silva/Flickr; shared under CC BY 2.0 license

Petrobras has this week said that it paid “the Commitment Assumption Agreement (“Agreement “), made with the Federal Public Prosecutor’s Office (” MPF “) and judicially approved on January 25, 2019, in the amount of US$ 682.6 million, corresponding to 80% of the value of the resolution reached with the Department of Justice (” DoJ “) and the Securities & Exchange Commission (” SEC “) in the United States.”

As reported in September 2018, Petrobras had agreed to pay a combined total of $853.2 million in penalties to resolve bribery investigation, without actually admitting any wrongdoing.

Under the agreements reached Petrobras is to pay $85.3 million to the DOJ and the same amount of $85.3 million to the SEC. The agreements fully resolve the investigations of U.S. authorities.

The remaining $682.6 million, which Petrobras has now paid, will be deposited by Petrobras into a special fund in Brazil to be used in accordance with the terms and conditions of the consent agreement, including for various social and educational programs to promote transparency, citizenship, and compliance in the public sector.

Petrobras said: “The agreement establishes that half of the amount deposited will be reverted to a patrimonial fund managed by an independent foundation (to be set up), which will invest in projects, initiatives and institutional development of suitable entities, which reinforce the culture of respect for legality and democratic values, in a nonpartisan way, through the promotion of participatory citizenship and that promote the awareness of the Brazilian population about the importance of integrity in the public and private environment, among other similar purposes, according to MPF guidelines and without interference of Petrobras.”

The other half may be used to pay potential unfavorable decisions against the company on proceedings commenced by investors or settlements, the Brazilian oil firm added.

In addition, the Agreement reinforces Petrobras’s commitment to continuously improve its compliance program.

“Finally, it is important to clarify that this Agreement does not amount to a confession or acknowledgment by Petrobras of liability for losses alleged by third parties, nor of the very existence of any loss they have experienced,” Petrobras said.

Former execs involved in bribery

As previously reported, and as shared by the U.S. DoJ, according to Petrobras’s admissions, while the company’s American Depository Shares traded on the New York Stock Exchange, members of the Petrobras Executive Board were involved in facilitating and directing millions of dollars in corrupt payments to politicians and political parties in Brazil, and members of Petrobras’s Board of Directors were also involved in facilitating bribes that a major Petrobras contractor was paying to Brazilian politicians.

“During this period, for example, a Petrobras executive directed the payment of illicit funds to stop a parliamentary inquiry into Petrobras contracts, and the executive also directed payments received from Petrobras contractors to be corruptly used to pay millions of dollars to the campaign of a Brazilian politician who had oversight over the location where one of Petrobras’s refineries was being built,” the DoJ said last year.

Petrobras has accepted responsibility under U.S. criminal law for the acts of certain former Petrobras executives and officers that gave rise to violations of books and records and internal controls provisions.

“Executives at the highest levels of Petrobras—including members of its Executive Board and Board of Directors—facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators,” said Assistant Attorney General Benczkowski following the settlement in September 2018.

Petrobras has stressed the malpractices took part between 2002 and 2012, and has also said that that none of the certain former Petrobras executives involved in the scheme are today associated with or employed by the company.

Offshore Energy Today Staff

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