Luxembourg Corp Voluntarily Discloses FCPA Violations, to Pay $8.9M
The Justice Department announced that Tenaris S.A. has voluntarily disclosed that it violated the Foreign Corrupt Practices Act and has agreed to pay a total of $8.9 million in non-prosecution agreements with DOJ and the Securities and Exchange Commission to resolve these violations.
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Tenaris Made Improper Payments to Uzbek Officials of State Oil & Gas Company
Tenaris is a publicly traded corporation headquartered in Luxembourg and a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world. Tenaris admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company. Tenaris also failed to record such payments accurately in its books and records, violating the FCPA accounting provisions subject to SEC enforcement.
Paid Agent to Obtain Public Contracts to Provide Oilfield Pipe & Related Services
In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage. Tenaris agreed to pay the agent 3.5% of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.
$3.5M Criminal Fine Reflects Substantial Reduction for Voluntary Disclosure
DOJ states that the $3.5 million criminal penalty for the FCPA violation in this case constitutes a substantially reduced monetary penalty and reflects its commitment to providing meaningful credit to Tenaris for its cooperation.
According to the agreement, Tenaris voluntarily disclosed its conduct to DOJ in a timely and complete manner, conducted an internal investigation, provided thorough, real-time cooperation to DOJ and the SEC, and undertook extensive remediation, including voluntary enhancements to its compliance program. As outlined in the agreement, Tenaris has agreed to fully cooperate with investigations by law enforcement authorities of the company’s corrupt payments and to adhere to a set of enhanced corporate compliance and reporting obligations.
Agreed to Pay $5.4M in Related SEC Case
In a related matter, Tenaris reached a settlement with the SEC in which Tenaris entered into a deferred prosecution agreement and agreed to pay $5,428,338 in disgorgement and prejudgment interest. Tenaris also agreed to comply with certain undertakings regarding its FCPA compliance program.
(See ITT's Online Archives or 05/10/11 news, 11051032, for BP summary of the facilitation payment exception to the FCPA's anti-bribery provisions.)