Technip Enters into DPA with DOJ, Pays $338 Million Settlement

Technip Enters into DPA with DOJ, Pays $338 Million Settlement

On June 28, 2010, the U.S. Department of Justice (DOJ) announced that it had entered into a deferred prosecution agreement (DPA) with French construction and engineering company Technip SA ("Technip"). Technip settled FCPA-related charges by agreeing to pay a $240 million criminal penalty and engaging a monitor.1 Additionally, the Securities and Exchange Commission (SEC) charged that Technip violated the books and records and internal controls provisions of the Act in the bribery scheme.2 In settling the civil SEC complaint, Technip agreed to pay an additional $98 million in disgorgement of profits.3

A criminal information, filed in the U.S. District Court for the Southern District of Texas, charged Technip with one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA's anti-bribery provision.4 These charges arose from the company's role in a four-company joint venture that paid over $100 million in bribes to Nigerian government officials over the course of a decade in order to secure construction contracts, valued at over $6 billion, to build liquefied natural gas facilities on Nigeria's Bonny Island.5 The joint venture consisted of Technip, Kellogg, Brown and Root, Inc. (KBR), Italy's Snamprogetti, and JGC Corporation, once known as Japan Gasoline Co., Ltd. According to the information, the joint venture hired agents who paid bribes to high-level Nigerian government officials in return for the construction contracts for the Bonny Island project.6

KBR, a former subsidiary of Halliburton, and Halliburton previously agreed to pay almost $600 million in fines related to the same scheme in 2009.7 In addition, in September 2008, KBR's former CEO, Albert "Jack" Stanley pleaded guilty to conspiring to violate the FCPA for his role in the bribery scheme.8

Under the DPA, Technip agreed to retain an independent corporate compliance monitor, implement a stringent anti-corruption program that requires the inclusion of audit rights and full compliance terms in all contracts with agents and business partners, and cooperate with the government's ongoing investigation. If Technip abides by the terms of the agreement, the DOJ will seek the criminal information's dismissal upon the agreement's expiration in approximately two years.9

Technip's sanctions, when added to those of its joint venture partners in the Bonny Island project that have resolved their portions of the government investigations, total $917 million - the largest FCPA-related aggregate settlement in history.10

The editors would like to thank Karen Woody and Margaret Ryznar, associates at Cadwalader, for their contribution to this FCPA Alert, as well as Keith Gerver for editing assistance.
1 Deferred Prosecution Agreement, United States v. Technip SA, Criminal No. 4:10-431 (S.D. Tex. June 28, 2010).
2 SEC Charges Technip with FCPA Violations, U.S. SECURITIES AND EXCHANGE COMMISSION, June 28, 2010, available at http://www.sec.gov/news/press/2010/2010-110.htm.
3 Id.
4 Information, United States v. Technip SA, Criminal No. 4:10-431 (S.D. Tex. June 28, 2010).
5 Id.
6 Id.
7 Press Release, Kellogg Brown & Root LLC Pleads Guilty to Foreign Bribery Charges and Agrees to Pay $402 Million Criminal Fine, DEPARTMENT OF JUSTICE (Feb. 11, 2009), available at http://www.justice.gov/opa/pr/2009/February/09-crm-112.html.
8 Press Release, Former Officer and Director of Global Engineering and Construction Company Pleads Guilty to Foreign Bribery and Kickback Charges, DEPARTMENT OF JUSTICE (Sept. 3, 2008), available at http://www.justice.gov/opa/pr/2008/September/08-crm-772.html.
9 Deferred Prosecution Agreement, supra note 2.
10 SEC Charges Technip with FCPA Violations, supra note 3.

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