Press Release: SEC Sanctions Statoil for Bribes to Iranian Government Official; 2006-174; Oct. 13, 2006
summary
Statoil ASA paid $5.2 million in bribes to an Iranian official via a sham consulting contract to secure an oil contract and future business, leading to a $21 million total penalty (including $10.5M disgorgement to SEC and $10.5M criminal fine to DOJ, with $3M offset by Norway) and mandatory compliance reforms.
paragraph
Statoil ASA, a Norway-based oil company listed on the NYSE, violated the Foreign Corrupt Practices Act by paying $5.2 million in bribes to an Iranian government official through a fraudulent consulting contract with an offshore intermediary. The payments, made in 2002–2003, secured Statoil a major oil and gas development contract and provided access to nonpublic bid information, while the company circumvented internal controls and falsified books and records by misclassifying the bribes as legitimate fees. Without admitting guilt, Statoil agreed to pay $10.5 million in disgorgement to the SEC and a $10.5 million criminal penalty to the DOJ, with $3 million of the DOJ penalty satisfied by a prior Norwegian fine, and committed to retaining an independent compliance consultant and ceasing all FCPA violations.
narrative
Statoil ASA, a Norway-based multinational oil company listed on the NYSE, violated the Foreign Corrupt Practices Act by paying $5.2 million in bribes to an Iranian government official between June 2002 and January 2003 through a sham consulting contract with an offshore intermediary in Turks and Caicos. The payments were disguised as legitimate fees to circumvent internal controls and falsify books and records, enabling Statoil to obtain nonpublic bid information and influence the award of a major oil and gas development contract in October 2002. Although Statoil suspended further payments after June 2003, the initial bribes had already secured improper business advantages worth hundreds of millions of dollars. In October 2006, the SEC imposed a $10.5 million disgorgement order and required Statoil to cease and desist from FCPA violations and retain an independent compliance consultant. Simultaneously, the U.S. Department of Justice secured a $10.5 million criminal penalty under a deferred prosecution agreement, with $3 million offset by a prior penalty paid to Norwegian authorities, resulting in a total financial sanction of $17.5 million. Statoil cooperated fully with the investigation and implemented remedial measures, though it neither admitted nor denied the allegations. The SEC and DOJ credited Statoil’s cooperation and compliance reforms as mitigating factors in the settlement.
Classified fcpa(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Parties
further paymentsSecurities and Exchange Commission
Keywords
statoiliraniangovernment officialofficialbribes iranianiranian governmentgovernmentiranian officialoilmillionbribesorderpaymentssanctions statoilstatoil bribes
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 5
- $10.50M $10.5 million $10M–$100M
- $5.20M $5.2 million $1M–$10M
- $5.00M $5 million $1M–$10M
- $1.00M $1 million $1M–$10M
- $200K $200,000 $100K–$1M
Entities 2
- person further payments
- agency Securities and Exchange Commission
Triples 10
- Securities And Exchange Commission sanctioned Statoil
- Statoil paid bribes to an Iranian government official
- Statoil violated the Foreign Corrupt Practices Act
- Statoil paid disgorgement of $10.5 million
- Statoil agreed to pay a criminal penalty of $10.5 million
- Statoil obtained a contract to develop a significant oil and gas field in Iran
- Statoil made initial payments of $5.2 million
- Statoil suspended further payments
- Statoil violated the books and records provisions of the federal securities laws
- Statoil cooperated with the Commission's investigation
PDF (from attached: pdf)
Text layers
Extracted body text (4,369c)
SEC Sanctions Statoil for Bribes to Iranian Government Official FOR IMMEDIATE RELEASE 2006-174 Washington, D.C., Oct. 13, 2006 - The Securities and Exchange Commission today announced the institution of a settled enforcement action against Statoil, ASA, a Norway-based and New York Stock Exchange listed multinational oil company, for violations of the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign government officials. The Commission's Order finds that Statoil paid bribes to an Iranian government official in return for his influence to assist Statoil in obtaining a contract to develop a significant oil and gas field in Iran and to open doors to additional projects in the Iranian oil and gas industry. Without admitting or denying the Commission's allegations, Statoil consented to entry of an administrative Order that requires Statoil to pay disgorgement of $10.5 million. The Order also requires Statoil to cease and desist from committing violations of the antibribery, internal controls and books and records provisions of the FCPA and to retain an independent compliance consultant to review and report on Statoil's compliance with the FCPA. In a related criminal proceeding announced today, Statoil has agreed to pay a criminal penalty of $10.5 million pursuant to a deferred prosecution agreement with the United States Department of Justice and the United States Attorney's Office for the Southern District of New York. Three million of the $10.5 million penalty is deemed satisfied by a penalty previously paid to the Norwegian criminal authorities. "The Foreign Corrupt Practices Act makes it unlawful for public companies to pay bribes to a foreign government official," said Mark K. Schonfeld, Director of the Commission's Northeast Regional Office. "The Commission is charged with enforcing this anti-corruption law against public companies in order to maintain a level playing field and encourage fair play and competition." The Order finds that: In June 2002 and January 2003, Statoil paid bribes to an Iranian government official intending to (i) induce the Iranian Official to use his influence with the Iranian state-run oil company; (ii) influence the Iranian state-run oil company's decision about whether to award Statoil a development contract; and (iii) secure improper advantage for Statoil by positioning it to obtain future business in Iran, potentially worth hundreds of millions of dollars. Statoil agreed to pay the Iranian official through a vaguely defined consulting contract with an offshore intermediary company organized in Turks and Caicos and owned by a third party located in London, England. The consulting contract obligated Statoil to make initial payments of $200,000 and $5 million, and ten subsequent annual payments of $1 million each. Statoil made the initial payments of $5.2 million to the Iranian official, but in June 2003, Statoil suspended further payments. In return for the payments, the Iranian official used his influence to assist Statoil in obtaining business in Iran by, for example, providing Statoil employees in Iran nonpublic information concerning oil and gas projects in Iran and showing Statoil copies of bid documents of competing companies that were otherwise not available to Statoil. In October 2002, Statoil obtained the contract to develop a significant oil and gas field. During the relevant time period, Statoil employees circumvented Statoil's internal controls and procedures that were in place to prevent illegal payments, and Statoil lacked sufficient internal controls. In addition, by mischaracterizing the payments as legitimate consulting fees, Statoil violated the books and records provisions of the federal securities laws. Statoil cooperated with the Commission's investigation and took a number of remedial steps as outlined in the Commission's Order. The Commission appreciates the assistance in this investigation of the United States Department of Justice, Fraud Division, and the United States Attorney's Office for the Southern District of New York. # # # Contacts: Helene T. Glotzer, Associate Regional Director, 212-336-0078 Bruce Karpati, Assistant Regional Director, 212-336-0104 Additional materials: Administrative Proceeding; Release No. 34-54599 http://www.sec.gov/news/press/2006/2006-174.htm Home | Previous Page Modified: 10/13/2006
OCR text (4,369c · plain-text · 99% conf)
SEC Sanctions Statoil for Bribes to Iranian Government Official FOR IMMEDIATE RELEASE 2006-174 Washington, D.C., Oct. 13, 2006 - The Securities and Exchange Commission today announced the institution of a settled enforcement action against Statoil, ASA, a Norway-based and New York Stock Exchange listed multinational oil company, for violations of the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign government officials. The Commission's Order finds that Statoil paid bribes to an Iranian government official in return for his influence to assist Statoil in obtaining a contract to develop a significant oil and gas field in Iran and to open doors to additional projects in the Iranian oil and gas industry. Without admitting or denying the Commission's allegations, Statoil consented to entry of an administrative Order that requires Statoil to pay disgorgement of $10.5 million. The Order also requires Statoil to cease and desist from committing violations of the antibribery, internal controls and books and records provisions of the FCPA and to retain an independent compliance consultant to review and report on Statoil's compliance with the FCPA. In a related criminal proceeding announced today, Statoil has agreed to pay a criminal penalty of $10.5 million pursuant to a deferred prosecution agreement with the United States Department of Justice and the United States Attorney's Office for the Southern District of New York. Three million of the $10.5 million penalty is deemed satisfied by a penalty previously paid to the Norwegian criminal authorities. "The Foreign Corrupt Practices Act makes it unlawful for public companies to pay bribes to a foreign government official," said Mark K. Schonfeld, Director of the Commission's Northeast Regional Office. "The Commission is charged with enforcing this anti-corruption law against public companies in order to maintain a level playing field and encourage fair play and competition." The Order finds that: In June 2002 and January 2003, Statoil paid bribes to an Iranian government official intending to (i) induce the Iranian Official to use his influence with the Iranian state-run oil company; (ii) influence the Iranian state-run oil company's decision about whether to award Statoil a development contract; and (iii) secure improper advantage for Statoil by positioning it to obtain future business in Iran, potentially worth hundreds of millions of dollars. Statoil agreed to pay the Iranian official through a vaguely defined consulting contract with an offshore intermediary company organized in Turks and Caicos and owned by a third party located in London, England. The consulting contract obligated Statoil to make initial payments of $200,000 and $5 million, and ten subsequent annual payments of $1 million each. Statoil made the initial payments of $5.2 million to the Iranian official, but in June 2003, Statoil suspended further payments. In return for the payments, the Iranian official used his influence to assist Statoil in obtaining business in Iran by, for example, providing Statoil employees in Iran nonpublic information concerning oil and gas projects in Iran and showing Statoil copies of bid documents of competing companies that were otherwise not available to Statoil. In October 2002, Statoil obtained the contract to develop a significant oil and gas field. During the relevant time period, Statoil employees circumvented Statoil's internal controls and procedures that were in place to prevent illegal payments, and Statoil lacked sufficient internal controls. In addition, by mischaracterizing the payments as legitimate consulting fees, Statoil violated the books and records provisions of the federal securities laws. Statoil cooperated with the Commission's investigation and took a number of remedial steps as outlined in the Commission's Order. The Commission appreciates the assistance in this investigation of the United States Department of Justice, Fraud Division, and the United States Attorney's Office for the Southern District of New York. # # # Contacts: Helene T. Glotzer, Associate Regional Director, 212-336-0078 Bruce Karpati, Assistant Regional Director, 212-336-0104 Additional materials: Administrative Proceeding; Release No. 34-54599 http://www.sec.gov/news/press/2006/2006-174.htm Home | Previous Page Modified: 10/13/2006