Regarding the above headline, technically, as noted in this Bloomberg report, the DOJ and SEC are investigating China Petroleum & Chemical Corporation (Sinopec – a Chinese state-owned entity) with shares traded on a U.S. exchange for bribery in Nigeria.
However, given that the DOJ and SEC consider certain state-owned entities like Sinopec to be “instrumentalities” of a foreign government, the above headline is accurate.
This previous post highlighted how there has never been an FCPA enforcement against a Chinese-based issuer, but this is likely just a matter of time as the previous post noted that Sinovac Biotech [a Beijing based company with shares traded on NASDAQ] is currently under FCPA scrutiny.
Add Sinopec to the list.
The Bloomberg report states:
“U.S. authorities are investigating China Petroleum & Chemical Corp. over allegations that the state-controlled oil producer paid Nigerian officials about $100 million worth of bribes to resolve a business dispute, according to people familiar with the probe.
Investigators from the SEC and DOJ are looking into allegations that outside lawyers acting as middlemen for the company, known as Sinopec, funneled illicit payments from its Swiss unit to the Nigerians through banks in New York and California, said the two people, who didn’t want to be named discussing an active investigation.
[Note: Because Sinopec is a foreign issuer, the above “U.S. nexus” is important because a foreign issuer can only be subject to the FCPA’s anti-bribery provisions to the extent – generally speaking – there is a U.S. nexus. Different story when it comes to the FCPA’s books and records and internal controls provisions]
The alleged payments were intended to resolve a $4 billion dispute between the Chinese oil company’s Addax Petroleum unit in Geneva and the Nigerian government over drilling and other capital costs, tax breaks and a division of royalties between Addax and the Nigerian National Petroleum Corporation the people said.
The U.S. probes are in their early stages, and no action is imminent, one of the people said. The SEC is handling its inquiry through its Los Angeles office, and the Justice Department investigation is being led by the U.S. attorney’s office in that city, the person said. At least one Washington-based prosecutor from the Justice Department unit that investigates potential violations of the Foreign Corrupt Practices Act has traveled to Los Angeles to conduct interviews, the people said.”