Latest FCPA Enforcement Action from DOJ and SEC Demonstrates Need for Compliance Program Review

On Friday, June 25, 2021, Amec Foster Wheeler Energy Limited (Amec), a London-based global engineering company, entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). The DPA stems from the DOJ’s filing of information accusing Amec of conspiring to violate the anti-corruption provisions of the Foreign Corrupt Practices Act (FCPA). According to Amec’s admissions in the DPA, between 2011 and 2014, Amec conspired with third parties, including a Brazilian consultant and an Italian sales agent affiliated with a Monaco-based middleman, to pay bribes to decision-makers. of a Brazilian public company. oil company — Petrobras. The bribes were paid to win a contract of around $ 190 million from Petrobras to design a gas-chemical complex in Brazil. Amec paid around $ 1.1 million in bribes under the Brazilian contract and made at least $ 12.9 million in profit from the resulting business.

As part of the DPA, the DOJ imposed a criminal fine of $ 18,375,000 on Amec. In addition, Amec and its parent company, John Wood Group PLC, have agreed to improve their compliance programs and report to the government on the implementation of their enhanced compliance programs.

Simultaneously with the DPA, on the basis of the same corruption scheme, the United States Securities and Exchange Commission (SEC) accused the American subsidiary of Amec, Amec Foster Wheeler Ltd., of violating the anti-corruption provisions , FCPA books and records and internal accounting controls. In its settlement with the SEC, Amec agreed to pay approximately $ 22.8 million, which included repayment of profit and pre-judgment interest. The settlement includes potential set-offs for amounts that Amec agrees to pay to officials in the UK and Brazil, but includes a potential minimum payment to the SEC of $ 10.1 million.

What is remarkable about the enforcement actions against Amec was not only that its dealings with third party agents resulted in FCPA violations, but that Amec had internal compliance controls in place that sought to prevent these specific problems. In its administrative order, the SEC said that “the bribes were paid through third party agents, including an agent. who failed Foster Wheeler’s due diligence process for potential commercial agents, but was allowed to continue “unofficially” to work on the project. (emphasis added)

Amec also continued to use a third-party agent who she said had lost influence on the project, noting that despite her loss of influence, the agent “can make our lives difficult if we don’t pay.” [them]. “Regardless of the reason it continued to pay the agent, Amec made approximately $ 13 million in profit from the agents’ misconduct in securing the Petrobras project for Amec.

As recently demonstrated in the DOJ and SEC’s FCPA 2020 US Foreign Corrupt Practices Law Resource Guide, the DOJ and the SEC remain committed to prosecuting corruption cases abroad. Like many FCPA violators before him, Amec has been held liable for bribes paid by third-party intermediaries. Unlike others, Amec had a compliance program in place that subjected these intermediaries to due diligence. In the end, Amec’s compliance program proved to be ineffective, as despite the failure of due diligence and red flags identified, the middleman was always retained and bribes -vin have been paid.

The message to businesses is clear: Having compliance programs and internal accounting controls is, in itself, insufficient. Compliance programs should be subject to periodic checks, audits, tests and improvements to ensure that they remain effective.

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