Technip To Pay $338 Million To Settle SEC And DOJ Charges As Part Of Largest FCPA Settlement Ever

Technip, a global engineering, construction and services company based in Paris, France, has agreed to a settlement with the Securities and Exchange Commission and the Department of Justice of charges under the Foreign Corrupt Practices Act (“FCPA”). According to the government, Technip was part of a four company joint venture that bribed Nigerian government officials over a 10 year period to win construction contracts in Nigeria worth more than $6 billion. 

Technip will pay $98 million to settle the SEC’s charges and an additional $240 million penalty in separate criminal proceedings announced today by the DOJ. Previously, one of Technip’s joint venture partners, KBR, Inc., and its former parent Halliburton Co., settled to similar charges. The combined sanctions of $917 million represent the largest combined settlements ever paid to the U.S. resulting from an FCPA violation.
 
The government alleged that between at least 1995 and 2004, senior executives at Technip and other members of TSKJ, a four company joint venture that included KBR, Inc., devised and implemented a scheme to bribe Nigerian government officials to obtain multi-billion dollar contracts to build liquefied natural gas (“LNG”) production facilities. According to the government: From the inception of the joint venture, Technip and the other joint venture partners paid bribes to assist in obtaining the LNG contracts. The joint venture partners formed a “cultural committee,” comprised of senior sales executives at each company, to consider how to carry out the bribery scheme. To conceal the illicit payments, the joint venture entered into sham contracts with a shell company controlled by a U.K. solicitor and a Japanese trading company as conduits for the bribes. Total payments to the two agents exceeded $180 million.
 
In addition, the government alleges: Technip’s internal controls failed to detect or prevent the bribery, and the company’s records were falsified as a result of the bribery scheme. After Technip became a U.S. issuer in August 2001, it became subject to the FCPA, including the FCPA’s prohibitions on the payment of anything of value to foreign government officials in order to obtain or retain business. Although Technip was aware of these prohibitions, it did not implement adequate controls to ensure compliance with the FCPA. Instead, its due diligence was a “perfunctory exercise” conducted so that Technip would have some documentation in its files.
 
Without admitting or denying these allegations, Technip consented to the entry of a court order permanently enjoining it from violating the anti-bribery, recordkeeping and internal controls provisions in Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, and ordering Technip to disgorge $98 million in ill-gotten profits derived from the scheme and prejudgment interest. The proposed settlement is subject to court approval.
 
In the related criminal proceeding announced today, the DOJ filed a criminal action against Technip, charging one count of conspiring to violate the FCPA and one count of violating the anti-bribery provisions of the FCPA. Technip entered into a deferred prosecution agreement with the DOJ and agreed to pay a criminal penalty of $240 million.