In June, the Office of the Comptroller General (CGU) and the Office of the Attorney General (AGU) signed two new leniency agreements.

The first, signed on June 7, 2021, involved the companies Sicpa do Brasil e Indústria de Tintas e Sistemas Ltda. and Ceptis Indústria e Comércio de Tintas e Sistemas S.A., due to the payment of undue advantages to public officials between 2009 and 2015. Under the leniency agreement, the companies, both from the same economic group, have committed to compensate BRL 762 million to the public treasury, which will be allocated entirely to the Union and the Brazilian National Mint.

The payment to the Brazilian National Mint relates to the fact that the companies were the target of Operation Vices, conducted by the Federal Police, which indicated payment of bribes to a tax auditor of the Federal Revenue for the bid rigging of a billionaire contract with the Brazilian National Mint in 2008, in order to favor the companies. The amount includes fines provided by the Brazilian Clean Companies Act (Federal Law 12,846/13) and the Administrative Improbity Law, in addition to compensation for the damage caused.

After internal investigations pointed to the practice of irregularities, the business group voluntarily disclosed to the authorities in order to negotiate the settlement. In addition to the payment of the fine, under the terms of the leniency agreement, the companies committed to improve their compliance programs.

The second leniency agreement was concluded on June 25 by Amec Foster Wheeler Energy Limited and Amec Foster Wheeler Latin America, subsidiaries of the John Wood Group PLC. In addition to the CGU and AGU, this settlement was a result of international cooperation and, therefore, similar agreements were also entered into with the Federal Prosecutor’s Office (MPF), the U.S. Department of Justice (DoJ), the Security Exchange Commission of the United States of America (SEC) and the Serious Fraud Office of the United Kingdom (SFO).

The leniency agreement relates to unlawful conducts that occurred under a project entered into with Petrobras, which occurred before Amec PLC acquired Foster Wheeler AG in November 2014, and prior to Wood’s acquisition of both companies in October 2017.

Within the scope of the leniency agreement, the companies committed to pay the total amount of BRL 86,196,063.32 million (USD 17,492,149.14) in Brazil. The amount corresponds to the sum between reimbursement to Petrobras, fine for violation of the Administrative Improbity Law and the fine for violation of the Brazilian Clean Companies Act, as follows: (i) BRL 67,273,820.43 for Petrobras; (ii) BRL 13,454,764.11 corresponding to the fine provided for in the Administrative Improbity Law, and (iii) BRL 5,467,478.78 related to the fine provided for in the Anticorruption Law, which will be reverted to the Union. The companies shall also have to pay amounts to the American and British authorities.[1] It should be noted that Wood’s effective cooperation in the investigation was considered for the analysis related to the credit received.

As in the leniency agreement entered into with Sicpa, in addition to the payment of the agreed amounts, the subsidiary companies of the Foster Wheeler Group committed to enhance its governance and compliance policies.

Copies of the leniency agreements have not yet been published by the Brazilian authorities, however the DPA entered into with the DoJ, is available here and the DPA with the SFO can be accessed here.

 

 

[1] The Deferred Prosecution Agreement (DPA) of the companies with the DoJ establishes the payment of a financial penalty in the total amount of USD 18,375,000.00, of which USD 7,656,250.00 is due to the US Treasury; US$ 6,125,000.00 will be allocated to the payment of the penalties to the Brazilian authorities, and US$ 4,593,750.00 to the payment of the penalties to the British authority, pursuant to the resolution of their respective agreements. In addition to the US$ 4,593,750 granted by the American authority, the DPA signed with the British authority, SFO, also establishes the payment of £46,033,891.98 to the British Consolidated Fund as financial penalty, and almost £50,000,000.00 as disgorgement, in addition to the restitution of £210,610.00 to Nigeria for violations committed in the country.</small