On May 24, 2022, the trading company Glencore signed a Leniency Agreement with the Brazilian Federal Prosecutor’s Office (MPF) and entered into Plea Agreements with the US Department of Justice (DOJ) and the US Commodity Futures Trading Commission (CFTC) to resolve investigations into corruption and market manipulation schemes in Glencore’s business operations in multiple countries. Moreover, Glencore has indicated that it will plead guilty to corruption charges filed by the UK Serious Fraud Office (SFO). Overall, Glencore expects to pay up to US$ 1.5 billion under the agreements with authorities in Brazil, the United States, and the United Kingdom.
In Brazil, Glencore signed a Leniency Agreement with the MPF within the scope of the Car Wash Operation. The leniency involves the payment of bribes, through intermediary agents, to Petrobras employees in exchange for undue advantages in fuels purchase and sale operations carried out by Petrobras in the foreign market.
Under the Leniency Agreement, Glencore agreed to pay approximately US$ 39.6 million directly to Petrobras, of which US$ 29.6 million will be paid as reimbursement of damages and reversal of undue advantages, US$ 9.8 million as a fine under the Administrative Improbity Law (Law N. 8,429/92) and US$ 145.9 thousand as a fine under the Anticorruption Law (Law 12,846/13). Furthermore, Glencore committed to improve its Compliance Program.
In the United States, Glencore International AG entered into a Plea Agreement and pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) due to the payment of bribes, through third-party intermediaries, to public officials in Brazil, Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, and the Democratic Republic of the Congo. Under the Plea Agreement, Glencore agreed to pay approximately US$ 700 million, of which US$ 428 million will be paid as a criminal fine and US$ 272 million as criminal forfeiture and disgorgement. Furthermore, Glencore will be subject to an independent compliance monitor for three years to improve its Compliance Program.
Glencore’s resolution with DOJ, having provided for the payment of US$ 700 million, entered the ranking of the 10 (ten) largest monetary sanctions imposed under the FCPA, surpassing the resolution of the French bank Société Générale S.A. that was concluded in 2018 and provided for the payment of US$ 585 million, which previously held the 10th position in the ranking.
As part of the resolution in the United States, the subsidiary Glencore Ltd. also entered into a Plea Agreement and admitted to engaging in schemes to manipulate fuel oil prices, agreeing to pay a fine of US$ 485.6 million to resolve market manipulation investigations conducted by the CFTC.
In the United Kingdom, the Serious Fraud Office (SFO) has charged the local subsidiary Glencore Energy UK Ltd. for violating UK Bribery Act, including for the corporate failure to prevent bribery offense under section 7 of the statute. In June 2019, the SFO launched Operation Azoth, which revealed that Glencore’s employees and intermediary agents paid bribes of approximately US$ 25 million to public officials in exchange for preferential access to fuel oil across Glencore’s operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria, and South Sudan. Glencore Energy will be sentenced on June 21, 2022. The company has indicated that it will plead guilty to all charges.
In addition, Glencore revealed that investigations by anticorruption agencies in Switzerland and the Netherlands are ongoing.
Despite the other Brazilian authorities (CGU and AGU) having not indicated to have been part of the resolution, Glencore’s agreements reinforce the trend for global and simultaneous resolution of cases involving transnational bribery and show strong cooperation between enforcement authorities in multiple jurisdictions.
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