SEC Charges Honeywell with Bribery Schemes in Algeria and Brazil

FOR IMMEDIATE RELEASE
2022-230

Washington D.C., Dec. 19, 2022 —

The Securities and Exchange Commission today announced charges against Honeywell International Inc. for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes that took place in Brazil and Algeria. The company has agreed to pay more than $81 million to settle the SEC’s charges.

The SEC’s order finds that Honeywell, a U.S.-based global manufacturer of aerospace, building technologies, and automation products, engaged in a bribery scheme involving intermediaries and employees of its U.S. subsidiary to obtain business from the Brazil state-owned entity Petrobras. Specifically, the order finds that, in 2010, Honeywell offered at least $4 million in bribes to a high-ranking Brazilian government official in connection with the bidding process at Petrobras. The SEC’s order also finds that, in 2011, employees and agents of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to obtain and retain business with the Algerian state-owned entity Sonatrach.

“For years, Honeywell neglected to implement sufficient internal accounting controls to mitigate against known corruption risks in countries like Brazil and Algeria,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “This failure created an environment in which Honeywell employees and agents could and did facilitate bribes.”

Honeywell consented to the SEC’s order that it violated the anti-bribery, books and records, and internal accounting controls provisions of the Securities Exchange Act of 1934. The SEC’s order provides for an offset of up to approximately $38.7 million of any payments made to Brazilian authorities. Therefore, the company’s minimum payment to the SEC would be approximately $42.4 million.

In a parallel case, Honeywell also entered into a deferred prosecution agreement and agreed to pay more than $78 million to settle criminal charges brought by the U.S. Department of Justice. Honeywell also agreed to settle additional charges brought by the Brazilian government.

The SEC’s investigation was conducted by Catherine W. Brilliant and Maria F. Boodoo of the FCPA Unit and was supervised by Ansu N. Banerjee. The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud Section, the FBI, and the Controladoria-Geral Da União/Advocacia-Geral da União and the Ministério Público Federal in Brazil.

SEC Charges Rio Tinto plc with Bribery Controls Failures

FOR IMMEDIATE RELEASE
2023-46

Washington D.C., March 6, 2023 —

The Securities and Exchange Commission today announced charges against global mining and metals company, Rio Tinto plc, for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bribery scheme involving a consultant in Guinea. The company has agreed to pay a $15 million civil penalty to settle the SEC’s charges.

The SEC’s order finds that, in July 2011, Rio Tinto hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables. Eventually the mining rights were retained, and the consultant was paid $10.5 million for his services, which Rio Tinto never verified. The SEC’s investigation uncovered that the consultant, acting as Rio Tinto’s agent, offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights. Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct. The mine has not been developed by Rio Tinto.

“Even well-designed controls need committed managers to be effective,” said Charles E. Cain, Chief of the SEC Division of Enforcement’s FCPA Unit. “Here, deficient controls were no match for managers determined to hire a consultant whose only ostensible qualification was a personal relationship with a senior government official.”

Rio Tinto consented to the SEC’s order without admitting or denying the findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934 and agreed to pay a $15 million civil penalty.

The SEC’s investigation was conducted by Sana Muttalib and was supervised by Ansu N. Banerjee. The SEC appreciates the assistance of Australian Securities & Investments Commission, the Australian Federal Police, and the United Kingdom Serious Fraud Office.

SEC Charges Frank’s International with FCPA Violations in Angola

ADMINISTRATIVE PROCEEDING
File No. 3-97397

April 26, 2023 – The Securities and Exchange Commission today announced settled charges against Frank’s International N.V., now known as Expro Group Holdings N.V., for violating the anti-bribery, books and records, and internal accounting controls provisions of the Foreign Corrupt Practices Act. Frank’s International was a Dutch corporation and global oilfield services provider. The SEC found that Frank’s International’s subsidiaries used an agent to pay bribes in connection with Angolan contracts.

According to the SEC’s order, from approximately January 2008 through October 2014, Frank’s International’s subsidiaries paid commissions to an Angolan sales agent when its subsidiary employees knew that there was a high probability that the agent would use the commissions to bribe Angolan government officials. The order further alleges that the agent diverted some of those funds to an Angolan government official to influence the award of contracts to Frank’s International’s subsidiaries. According to the order, Frank’s International lacked adequate internal accounting controls related to the retention and payment of its agents that interacted with foreign government officials.

The SEC’s order finds that Frank’s International violated the anti-bribery, books and records, and internal accounting controls provisions of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. Without admitting or denying the findings, Frank’s International has agreed to cease and desist from committing or causing any future violations of these provisions. The company has also agreed to pay disgorgement plus prejudgment interest totaling $4,998,721 and a $3,000,000 civil penalty.

The SEC’s investigation was conducted by Jason Rose and Maria F. Boodoo and supervised by Samantha Martin.

SEC Gartner, Inc. – A research and consulting services company agreed to pay over $2.45 million to resolve charges that it violated the anti-bribery

ADMINISTRATIVE PROCEEDING

• Gartner, Inc. – A research and consulting services company agreed to pay over $2.45 million to resolve charges that it violated the anti-bribery, books and records, and internal accounting control provisions of the FCPA in connection with a corrupt arrangement with a South African consulting firm to obtain and retain contracts from the South African Revenue Service. (5/26/2023)

Albemarle Corp. to Pay SEC More Than $103 Million to Settle FCPA Violations

FOR IMMEDIATE RELEASE
2023-209

Washington D.C., Sept. 29, 2023 —

The Securities and Exchange Commission today announced that Charlotte-based Albemarle Corporation, a global specialty chemicals company, agreed to pay more than $103.6 million to settle the SEC’s charges that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).

According to the SEC’s Order, despite significant red flags, Albemarle used agents from at least 2009 through 2017 that paid bribes to obtain sales of refinery catalysts to public-sector oil refineries in Vietnam, India, and Indonesia and to private-sector oil refineries in India. In addition, the Order finds that Albemarle violated the FCPA’s recordkeeping requirements and failed to devise and maintain a sufficient system of internal accounting controls to provide reasonable assurances that payments made to agents in Vietnam, Indonesia, India, China, and the United Arab Emirates were for legitimate services.

“Despite repeated and glaring bribery-related red flags, Albemarle failed for many years to implement sufficient internal accounting controls relevant to the use of agents by its global refining solutions business to make sales to state-owned customers around the world,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “This failure set the stage for wide-ranging misconduct.”

Albemarle consented to the SEC’s Order finding that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Securities Exchange Act of 1934. Albemarle has agreed to cease and desist from committing or causing any future violations of these provisions and to pay disgorgement of more than $81.8 million plus prejudgment interest of more than $21.7 million, totaling more than $103.6 million.

In a parallel action, the U.S. Department of Justice announced today it has entered into a non-prosecution agreement in which Albemarle agreed to pay a $99 million criminal fine and to a forfeiture of approximately $98 million, of which $81.8 million will be satisfied by the company’s payment of disgorgement pursuant to the SEC Order.

The SEC’s investigation was conducted by Christine Neal, M. Shahriar Masud, and Brittany Prelogar of the SEC’s FCPA Unit, with assistance from Fernando Campoamor. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division’s Fraud Section, the IRS-Criminal Investigation, the Anti Corruption Centre of the Dutch Fiscal Intelligence and Investigations Service, the Netherlands Public Prosecution Service for Serious Fraud and Environmental Crime, the Australian Securities and Investments Commission, the Securities and Exchange Board of India, and the Indonesia Financial Services Authority.

SEC Charges Global Software Company SAP for FCPA Violations

German multinational agrees to monetary sanctions of nearly $100 million to settle SEC’s bribery charges

FOR IMMEDIATE RELEASE
2024-4

Washington D.C., Jan. 10, 2024 —

The Securities and Exchange Commission today announced charges against global software company SAP SE for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan. The company agreed to monetary sanctions of nearly $100 million in disgorgement and prejudgment interest to settle the SEC’s charges.

The SEC’s order finds that SAP, whose American Depositary Shares are listed on the New York Stock Exchange, violated the FCPA by employing third-party intermediaries and consultants from at least December 2014 through January 2022 to pay bribes to government officials to obtain business with public sector customers in the seven countries mentioned above. According to the SEC’s order, SAP inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted. The SEC’s order finds that SAP failed to implement sufficient internal accounting controls over the third parties and lacked sufficient entity-level controls over its wholly owned subsidiaries.

“Our order holds SAP accountable for misconduct that spanned seven jurisdictions and persisted for several years and serves as a stark reminder of the need for global companies to be attuned to both the risks of their business and the need to maintain adequate entity-level controls over all their subsidiaries,” said Charles E. Cain, Chief of the SEC Division of Enforcement’s FCPA Unit.

In 2016, the SEC charged SAP with books and records and internal accounting controls violations in connection with a bribery scheme in Panama.

SAP consented to the SEC’s order finding that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Securities Exchange Act of 1934. SAP agreed to cease and desist from committing or causing any violations of these provisions and to pay disgorgement of $85 million plus prejudgment interest of more than $13.4 million, totaling more than $98 million, which will be offset by up to $59 million paid by SAP to the South African government in connection with its parallel investigations into the same conduct.

The SEC’s action is part of a coordinated global settlement that includes the United States Department of Justice (DOJ) and criminal and civil authorities in South Africa. In its parallel case, SAP agreed to pay the DOJ a $118.8 million criminal fine and to a forfeiture of approximately $103 million, of which $85 million will be satisfied by the company’s payment of disgorgement pursuant to the SEC’s order.

The SEC’s investigation was conducted by Sana Muttalib and Sonali Singh and was supervised by Ansu N. Banerjee of the SEC’s FCPA unit.