Friday, October 23, 2020

Samsung Heavy Industries Settle Bribery Case For $75 million

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Samsung Heavy Industries Company Limited (SHI) has agreed to pay penalties totalling more than $75 million to resolve a U.S. government’s investigation into violations of the Foreign Corrupt Practices Act.

The Department of Justice says SHI paid millions of dollars to a Brazilian intermediary knowing that some of the money would be used to bribe high-level executives at Petrobras to obtain a lucrative shipbuilding contract.

According to admissions by Samsung Heavy Industries, beginning in 2007 and continuing until 2013, the company conspired with others to violate the Foreign Corrupt Practices Act by providing  approximately $20 million in commission payments to a Brazilian intermediary, knowing that portions of the money would be paid as bribes to officials at Petrobras in order to secure improper business advantages and to cause Petrobras to enter into a contract to charter a drill ship that SHI was selling to a Houston-based offshore oil drilling company, which facilitated Samsung Heavy Industries executing the sale of the drill ship.

SHI entered into a deferred prosecution agreement with the Department in connection with criminal information filed on Friday in the Eastern District of Virginia charging the company with conspiracy to violate the anti-bribery provisions of the Act. SHI has committed to pay $75,481,600, half to the United States within 10 business days of the agreement and the remaining 50 percent will either be paid to Brazilian authorities or to the United States if it is not paid to Brazil before November 25, 2020.

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As part of the deferred prosecution agreement, Samsung Heavy Industries has agreed to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance its compliance program; and to report to the Department on the implementation of its enhanced compliance program.

SHI received credit for its cooperation with the Department’s investigation and for taking remedial measures. For example, the company made significant enhancements to its compliance program, including hiring additional compliance staff, implementing enhanced anti-corruption policies and heightened due diligence controls over third party vendors, instituting mandatory anti-corruption training and improving whistleblower policies and procedures.

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