Jump to content Jump to menu
Why Register?

Shearman FCPA Website: Cases Logo Shearman & Sterling LLP FCPA.Shearman.com: The One-Stop Resource on the Foreign Corrupt Practices Act

U.S. v. Statoil ASA

 
:
Statoil ASA
:
DOJ Criminal
:
October 12, 2006
:
U.S. v. Statoil ASA
:
U.S. v. Statoil, ASA, No. 1:06-cr-00960-RJH-1 (S.D.N.Y. 2006)
:
This case represents a clear example of the DOJ utilizing the FCPA's expansive jurisdiction to spur foreign law enforcement to be more active and to impose more dissuasive sanctions. Here, the DPA followed an earlier Norwegian enforcement action and provided that the fine be partially offset by money already paid to the Norwegian authorities.
:
Energy (Non-Utility)-Oil & Gas-Exploration/Production
:
Iran
:
2001; 2002
:
The head of the Iranian Fuel Consumption Optimizing Organization, a subsidiary of the National Iranian Oil Company, and an advisor to Iran's Minister of Oil. He is the son of a former president of Iran who led the Expediency Council, which mediates between Iran's politically-elected and clerically-controlled parts of Iran's government.
:
In 2002 and 2003, Statoil paid bribes to an Iranian government official to secure valuable oil and gas rights in Iran. In 2002, Statoil entered into a "consulting contract" with an offshore intermediary company, which called for the payment of more than $15 million over 11 years. The purpose of the contract was to induce the Iranian official to use his influence to assist Statoil in obtaining oil and gas projects in Iran. A senior Statoil executive (the "Senior Executive"), who reported directly to the CEO, and the CEO, were directly involved in approving the contract.

Statoil made two payments totalling $5.2 million pursuant to the contract and was awarded a development contract expected to yield millions of dollars in profits. The payments were characterized in Statoil's books and records as legitimate consulting fees.

In 2004, Statoil's internal audit department uncovered and reported the existence of the consulting contract (and the $5.2 million payments) to the company's CFO, who ordered an investigation into the matter. Statoil's security group and internal audit group subsequently prepared a report concluding that the company may have violated U.S. and Norwegian bribery laws, and recommended that the contract be terminated immediately. Despite that recommendation, Statoil's CEO and the Chairman its Board of Directors took no corrective action. The consulting contract was of subsequently disclosed in the Norwegian press, which led to the resignations of the Senior Executive, the CEO, and the Chairman, and gave rise first to the Norwegian inquiry by Okokrim, the Norwegian fraud investigation agency, and later to the DOJ's investigation and the SEC's inquiry.

On October 11, 2006, Statoil and the DOJ entered into a three year deferred prosecution agreement, in which Statoil acknowledged violating the anti-bribery and accounting provisions of the FCPA, agreed to pay a $10.5 million fine, agreed to the appointment of an independent compliance monitor, and agreed to adopt remedial compliance measures.

In November 2009, the DOJ announced that Statoil had satisfied the terms of the three year DPA and the charges against Statoil were dismissed with prejudice.
:
Anti-bribery (Issuer), Books and records (Issuer)
:
Compliance Monitor, Deferred-prosecution Agreement, Fine
:
As part of the deferred prosecution agreement, Statoil agreed to pay a fine of $10.5 million, to be offset by $3 million to reflect a penalty already paid to the Norwegian authorities.
:
10,500,000
:
0
:
Issuer
:
Foreign
:
Contract Procurement/Retention
:
Not stated.
:
Wire/check
:
Sales Agent/Consultant
:
5,200,000
:
Iran
:
Switzerland, United States
:
Despite the conduct involving a foreign corporation's activities in Iran, with no immediately apparent connection to the U.S. as a jurisdiction, the government included in the DPA's details of violations details about how Statoil had transferred $5.2 million to its consultant's bank account in Switzerland via two bank transfers through US bank accounts.
:
No
:
Norway