Switzerland’s top legal authority has ordered three Swiss subsidiaries of the Netherlands-based SBM Offshore to pay a penalty of more than $7 million after failing to take reasonable organisational measures to prevent the bribery of foreign public officials in Angola, Equatorial Guinea and Nigeria.
The Office of the Attorney General of Switzerland (OAG) has sentenced and ordered the trio of companies to pay 7 million Swiss francs ($7.6 million), including a near-maximum fine of 4.2 million Swiss francs.
“Multiple and serious deficiencies"
According to the OAG, as a result of “multiple and serious deficiencies” in their internal organisation between 2006 and the start of 2012 the three companies failed to prevent the bribery of public officials in Angola, Equatorial Guinea and Nigeria.
The three subsidiaries SBM Holding Inc. SA, Single Buoy Moorings Inc. and SBM Production Contractors Inc. together form the financial operations centre of the SBM Offshore group, said the OAG.
This “summary penalty order” issued against the three companies was dated 18 November but its details were only publicised today.
This is the latest stage in proceedings conducted by the OAG that led to a judgment issued on 6 July 2020 by the Criminal Chamber of the Federal Criminal Court in which a former executive — Didier Keller — of the SBM Offshore group and of SBM Holding Inc. SA was convicted under a simplified procedure of bribing foreign public officials in Angola.
Switzerland’s summary penalty order is also connected with settlements reached, primarily by SBM Offshore NV, in the Netherlands in 2014, in the US in 2017 and in Brazil in 2018.
"Willingness to prosecute"
“It shows the OAG’s willingness to prosecute and penalise companies engaging in cross-border corruption from Switzerland, even when part of the allegations concerned has already been the subject of settlements abroad,” said the attorney general’s office.
According to the OAG’s investigation, between 2006 and the start of 2012, bribes totalling more than $22 million and close to €1 million ($1.56 million) were paid to public officials in Angola, Equatorial Guinea and, to a lesser extent, Nigeria.
“The money came from bank accounts held by SBM Holding Inc. SA,” said the OAG, “and were channelled with the aid of intermediaries acting through shell companies, under the cover of sham contracts concluded with the three Swiss companies now convicted".
“These criminal practices,” according to the OAG, “were part of a system specifically set up to pay substantial bribes to foreign public officials with the aim of securing contracts for the SBM Offshore group".
"Non-existent corruption measures"
OAG said “the extent and duration of the acts of corruption committed within the three companies now convicted, and throughout the SBM Offshore group, show that, during the period under investigation, the assessment of the risk of corruption, the measures and procedures for preventing corruption and the related controls, in particular in relation to the activities of intermediaries, were either non-existent, or wholly inadequate".
The OAG remarked that these failures “appear all the more serious” because the intermediaries used by the three companies now convicted were “supposed to provide services in relation to the oil and gas industry, which is particularly exposed to the risk of corruption, and in connection with contracts involving companies owned by states notoriously prone to endemic corruption".
Companies shared offices and staff
“The lack of organisation thus established was common to all three of the companies convicted, which shared the same offices and, in part, the same staff and managers,” added the attorney general’s office.
Under Swiss law, the maximum fine that could have been imposed on the SBM companies is 5 million Swiss francs.
SBM’s fine was downgraded form this maximum, said the OAG, because of the time elapses since the bribes were paid, and the measures that the SBM Offshore group has taken since 2012 to bring an end to corrupt practices.
The remaining “compensatory” payment of 2.8 million Swiss francs relates to bribes paid to officials in Nigeria. Under Swiss law, a compensatory claim may be ordered if the assets liable to forfeiture are no longer directly available.
However, the OAG said it was not possible to order compensatory claims in connection with the bribes paid in Angola and Equatorial Guinea because the related profits made by the SBM Offshore group were already included in the amounts paid within the frame of the settlements reached in the Netherlands and the US in 2014 and in 2017 respectively.
“According to the relevant legal principles, it is not possible to order twice the forfeiture of assets stemming from the same bribes,” added the attorney general’s office.
Separately, the AOG noted that it has closed proceedings related to suspicions of inadequate organisation connected with the bribery of foreign public officials in Brazil on the grounds that SBM Holding Inc. SA was a party to the settlement concluded in Brazil in 2017 connected with the same facts.
Commenting on the matter, SBM’s chief governance and compliance officer Erik Lagendijk said SBM has changed, pointing out that “today and for many years now, the company has been implementing substantial measures to ensure that it operates with integrity and fully in line with laws, regulations and with its compliance standards. These measures were also recognised by the Swiss Public Prosecutor Office".
“The termination of the investigation and penalty now also close this old issue in Switzerland on a full and final basis,” he added.
An OAG spokesperson added: "I can confirm that the summary penalty order issued by the Office of the Attorney General of Switzerland and communicated today does indeed mark the conclusion of the investigations against the three subsidiaries concerned."
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