Archive for the ‘FCPA’ Category

Oil and Gas Sector Most “Vulnerable” to the UK Bribery Act

Photo by Neubie. Some rights reserved.

Poor things.

According to research from Ernst & Young, those in the oil and gas sector are the most likely to be impacted by the UK’s Bribery Act 2010, which is slated to go into effect on July 1, 2011.

The Act, which “reforms the criminal law to provide a new, modern and comprehensive scheme of bribery offences that will enable courts and prosecutors to respond more effectively to bribery at home or abroad,” has been described as “the toughest anti-corruption legislation in the world,” putting the US Foreign Corrupt Practices Act  (FCPA) to shame. (Squire Sanders recently published an Alert detailing three major areas that will be criminalized by the UK Act that are not currently covered by the FCPA.)

Ernst & Young is quick to point out that the oil and gas sector’s “vulnerability” to prosecution doesn’t mean that “individuals and companies within the oil and gas sector are intrinsically more corrupt.” Rather, points out a spokesperson, “it is the nature and locations of their businesses that exposes them to additional risk.”

The findings were based on analysis of prior convictions in various sectors under the FCPA. Interested in perusing disclosures related to (possible, probable and persecuted) FCPA violations in the oil and gas sector? Check out this search on knowledgemosaic’s SEC Filings page.

Here’s a teaser:

NOBLE CORP | Form 10-Q | 5/6/2011

In 2007, we began, and voluntarily contacted the SEC and the U.S. Department of Justice (“DOJ”) to advise them of, an internal investigation of the legality under the United States Foreign Corrupt Practices Act (“FCPA”) and local laws of certain reimbursement payments made by our Nigerian affiliate to our customs agents in Nigeria. In 2010, we finalized settlements of this matter with each of the SEC and the DOJ. In order to resolve the DOJ investigation, we entered into a non-prosecution agreement with the DOJ, which provides for the payment of a fine of $2.6 million, as well as certain undertakings, including continued cooperation with the DOJ, compliance with the FCPA, certain self-reporting and annual reporting obligations and certain restrictions on our public discussion regarding the agreement. The agreement does not require that we install a monitor to oversee our activities and compliance with laws. In order to resolve the SEC investigation, in 2010, we agreed to the entry of a civil judgment against us. Pursuant to the agreed judgment, we agreed to disgorge profits of $4.3 million, pay prejudgment interest of $1.3 million and refrain from denying the allegations contained in the SEC’s petition, except in other litigation to which the SEC is not a party. We also agreed to an injunction restraining us from violating the anti-bribery, books and records, and internal controls provisions of the FCPA, and we waived a variety of litigation rights with respect to the conduct at issue. The agreed judgment does not require a monitor. Our ability to comply with the terms of the settlements is dependent on the success of our ongoing compliance program, including our ability to continue to manage our agents and supervise, train and retain competent employees, and the efforts of our employees to comply with applicable law and our code of business conduct and ethics.

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