MDO | ALERTS

MDO | ALERTS

Rolls-Royce to Pay $800 Million for FCPA 

and Other Corruption Violations

 

■ ■ ■  January 26, 2017

 

Last week, the U.S. Department of Justice (DOJ) announced that Rolls-Royce plc, a manufacturer and distributor of power systems in the aerospace, defense, marine and energy sectors, agreed to pay the U.S. $170 Million as part of an $800 million global resolution for violations of the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws investigated by the U.K. and Brazil.

 

 According to the DOJ, Rolls-Royce violated the anti-bribery provision of the FCPA by paying more than $35 million in bribes through third parties to government officials in 12 countries to secure government contracts.  For example, in Thailand, the company paid approximately $11 million in bribes to government officials at state-controlled oil and gas companies in exchange for seven contracts.  In Brazil, Rolls-Royce paid over $9 million in bribes to officials at Petrobas, the Brazilian state-owned oil company, in exchange for multiple contracts. In Kazakhstan, the company paid over $5 million in commissions to advisors knowing that a portion of it would be used to bribe officials with influence over a state-owned joint venture that awarded the company multiple contracts.  Other countries affected by the Rolls-Royce bribery scheme included Angola, Azerbaijan, China, India, Indonesia, Iraq, and Russia.

 

"This successful parallel investigation is a tremendous example of the central importance of working cooperatively alongside our international partners to achieve a fair and meaningful resolution," said FBI's Criminal Investigative Division, Assistant Director in Charge Paul M. Abbate.

 

This case demonstrates the continued multinational investigation and enforcement collaboration among U.S. and foreign government agencies against bribery. It also reflects the importance for companies conducting business internationally to conduct adequate due diligence and implement effective controls to ensure that advisors, agents, and other third parties are not used as intermediaries to bribe government officials.

 

With record-setting fines being levied in the billions of dollars, coupled with the DOJ and SEC's increased resources and aggressive multinational enforcement, it is more critical than ever for companies to establish and assess Anti-Corruption Compliance Programs. MDO Partners assists companies with designing, implementing, and assessing such compliance programs to help mitigate the risks of violating the FCPA and other anti-corruption laws. Our attorneys and advisors have extensive experience advising clients on the FCPA and effective Anti-Corruption Compliance Programs in over 30 countries.

About MDO Partners

 

MDO Partners is a boutique law firm that focuses on Corporate, International, and Real Estate Law, as well as Global Compliance and Business Ethics. The firm is comprised of a solid team of attorneys and advisors with more than 100 years of combined experience who are committed to the business goals and best interests of their clients. The firm delivers value-added services of the highest caliber and serves as a trusted advisor to its clients with a practical and business-savvy approach. For more information on MDO Partners, please visit www.mdopartners.com

 

If you have questions or comments regarding this Alert, please contact the attorney listed below.

 

Richard Montes de Oca

Managing Partner

305.704.8452

rmontes@mdopartners.com

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