US drops FCPA probe against Statoil

US authorities have dropped their foreign bribery case against Norwegian energy giant Statoil, after the satisfactory completion of a three-year deferred prosecution arrangement.

In 2006, the US Department of Justice charged the Norwegian gas and oil producer of violating the US Foreign Corrupt Practices Act (FCPA) by making a bribe of more than US$5 million, through an intermediary, to an Iranian official with the purpose of influencing the award of oil and gas contracts in the Middle East country.

The company was charged with making corrupt payments, as well as committing securities fraud by falsifying its books and mislabelling the illicit payments as “consulting fees”. As part of a settlement, Statoil acknowledged that the bribes were paid, was fined US$10.5 million, and had to submit to periodic reviews on the company’s compliance controls as they related to the FCPA for a period of three years.

Under the deferred prosecution deal, the criminal charges against it were to remain pending until it was dismissed or followed through by prosecution, depending on whether the company was able to demonstrate good conduct.

In a statement, Statoil said that it had fulfilled its obligations under this deferred prosecution agreement, and the criminal charges against the company have been dismissed. As such, the company’s controls, policies, and procedures related to compliance with FCPA will no longer be subject to review by external compliance consultants, it said.

“Three years of diligent efforts by Statoil to address past misconduct and serious compliance failures have led to the dismissal of foreign bribery charges against the company. Bribing foreign government officials and then attempting to disguise the payments cannot be standard operating procedure. Companies that have robust compliance programs risk far less than companies that take their chances on possible FCPA violations,” said US assistant attorney general Lanny Breuer.

US Attorney Prett Bharara said the case showed that deferred prosecution agreements worked, and they served as an important middle ground between declining to prosecute and getting a conviction. “The deferred prosecution in this case helped restore the integrity of Statoil’s operations and preserve its financial viability while at the same time ensuring that it improved what was obviously a failed compliance and anti-corruption program,” he said.