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SBM Offshore secures ground-breaking Brazilian settlement

Por: Global Investigations ReviewImprimirVisualizar em PDF

SBM Offshore's US$340 million deal with Brazilian authorities is the first time that a leniency agreement has been signed by both administrative and criminal enforcers.

The deal, which was announced on 15 July, resolves allegations that the Dutch oil services company won contracts by bribing officials at Brazil's state-controlled oil company Petrobras. The alleged corruption occurred between 1996 and 2012.

SBM entered into the leniency agreement with four other parties: the Attorney General's Office, federal public prosecutors, Petrobras and the Ministry of Transparency. The latter has assumed the responsibilities of Brazil's now-defunct administrative anti-corruption authority, the Office of the Comptroller General (CGU).

As part of the deal, SBM will hand over US$328 million to Petrobras, of which US$149 million will be paid as a fine and the rest will be deducted from existing contracts between the two companies.

A further US$13.6 million is to be paid to the Ministry of Transparency and money laundering authority The Council for Financial Activities Control.

SBM will now be allowed to bid for new contracts with Petrobras, and the Brazilian oil company will not sue for damages.

José Neto at Pinheiro Neto Advogados in Brasília, who represents SBM, told GIR that the task of successfully negotiating a leniency deal for the first time with multiple different authorities was "exhausting".

He said: "We wanted to have everyone in the room to have full closure.

"It took us a long time to get everyone in the room. It was very frustrating at some points."

Neto said the deal was agreed in May, but signing was delayed following the decision of Brazil's Senate to begin an impeachment trial of then-president Dilma Rousseff for alleged budgeting misconduct. The Senate impeachment vote delayed the deal for two months, Neto said.

Rousseff's suspension from office pending trial sparked major upheavals in Brazil's anti-corruption enforcement regime. Her replacement, Michel Temer, who is the current acting president of Brazil, replaced the CGU with a new government department, the Ministry of Transparency.

Upheaval in the Brazilian government aside, Neto told GIR it was difficult to negotiate consensus between five different parties with different objectives. At different points in the negotiation process, each of the five parties seemed ready to refuse the leniency deal.

In December, prosecutors in Rio De Janeiro charged SBM's CEO, Bruno Chabas; the company's chief compliance officer, Sietze Hepkema; and its former Brazilian unit head, Philippe Levy, accusing the executives of concealing information about the Dutch company's bribery scheme to help wrongdoers avoid detection.

The allegations were resolved in January when Chabas and Hepkema agreed to settle, paying US$77,000 each.

The SBM leniency deal is significant as it shows that such settlements are possible between federal prosecutors and administrative anti-corruption authorities. 

In an interview with GIR in October, one of the lead prosecutors in the Operation Car Wash investigation into Petrobras corruption allegations, Deltan Dallagnol, said it's very difficult to negotiate leniency deals with the CGU.

"Part of the difficulty is that we have a lot of investigations that are confidential, and that we cannot share with the CGU," he said. "And we cannot tell the CGU why we do not want to make an agreement with a company if these reasons are confidential."

However, in the SBM Offshore settlement, GIR understands that the two agencies were able to work well together. Neto said: "There were tensions [between the CGU/Ministry of Transparency and prosecutors] certainly, but it would not be correct to say that these were too problematic.

"At the end of the day they worked as a team, not enemies."

SBM's Brazilian leniency deal comes after the company reached a US$240 million settlement with the Dutch Public Prosecutor's Office in November 2014, resolving Petrobras-linked corruption allegations.

The company also announced at the time that it had secured a declination from the US Department of Justice (DoJ). SBM had alerted both US and Dutch authorities to potential misconduct at an early stage.

However, in February 2016 SBM announced that the DoJ had reopened its bribery investigation into the company.

Commenting on the US investigation, a spokesperson for SBM told GIR: "We are cooperating with the DoJ and are seeking a swift resolution."


Pinheiro Neto Advogados

Partners José Alexandre Buaiz Neto in Brasília, and Francisco Maranhão in Rio de Janeiro. Assisted by Clarissa Passarinho and Gabriela Abdalla.dvogada

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