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Issues To Consider From The Trafigura Enforcement Action

Issues

This previous post covered the net $100.2 million FCPA enforcement action against Trafigura concerning conduct in Brazil.

This post highlights additional issues to consider.

Timeline

Trafigura was under FCPA scrutiny since at least early 2019 (see here from the prior post).

Thus, from start to finish the company was under scrutiny for approximately 5 years.

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The FOREIGN Corrupt Practices Act

Globe

Since 2021, the DOJ has resolved 19 corporate Foreign Corrupt Practices Act enforcement actions.

The “Foreign” in Foreign Corrupt Practices Act refers to the location of the bribe recipient (as in “foreign” non-U.S. officials).

However, the “Foreign” in Foreign Corrupt Practices Act might as well refer to the location of the bribe payor as well – in other words the location of the company resolving the FCPA enforcement.

As highlighted below, of the 19 DOJ corporate FCPA enforcement actions since 2021, 14 of the 19 enforcement actions (74%) have involved foreign companies.

Set forth below are the 19 corporate DOJ FCPA enforcement actions since 2021 along with a general description of the company involved.

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Next Up … Trafigura

Trafigura

First it was Sargeant Marine in 2020 (see here for the prior post).

Then it was Vitol in 2020 (see here for the prior post).

Then it was Glencore in 2022 (see here for the prior post).

Then it was Freepoint Commodities in 2023 (see here for the prior post).

Then it was Gunvor in 2024 (see here for the prior post).

Next up in the list of commodities trading (or related) companies to resolve an FCPA enforcement action is Trafigura (a company which has been under FCPA and related scrutiny for years). After accounting for various credits for related foreign law enforcement actions, the net FCPA settlement amount is approximately $100.2 million (a criminal fine amount of $53.66 million and a forfeiture amount of $46.51 million).

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Gunvor Resolves Net $474.4 Million FCPA Enforcement Action

gunvor

In 2021, Raymond Kohut (a Canadian citizen who lived in the Bahamas and worked in business development for Gunvor Group Ltd., a Switzerland based commodities firm) pleaded guilty in connection with an Ecuador bribery scheme. (See here for the prior post).

Last week, the DOJ returned to the same core conduct in announcing a Foreign Corrupt Practices Act enforcement action against Gunvor.

The net FCPA settlement amount was $474.4 million (a $187.3 million criminal fine and a $287.1 million forfeiture amount).

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Yet Additional FCPA Enforcement Actions Concerning Ecuador’s Seguros Sucre

seguros

From time to time, there are certain Foreign Corrupt Practices Act enforcement actions in which the core allegations just seem to “keep on giving” and spawn several related enforcement actions.

A prime example were the many FCPA (and related) enforcement actions involving Haiti Teleco from approximately ten years ago (see here) and the many recent enforcement actions concerning Venezuela’s PDVSA.

Enforcement actions concerning Ecuador’s Seguros Sucre S.A. (“Seguros Sucre”), an alleged state-owned insurance company and “instrumentality” of the Ecuadorian government, are beginning to add up as well. In 2022 U.K.-based reinsurance broker, Jardine Lloyd Thompson Group Holdings Ltd. (JLT) resolved a $29 million FCPA enforcement action (see here for the prior post) and eight individuals have been criminally charged (and several have pleaded guilty) in connection with the same underlying conduct.

The latest enforcement action was yesterday’s announcement by the DOJ that Tysers Insurance Brokers Limited (Tysers – formerly known and doing business during the relevant time period as Integro Insurance Brokers Limited an international reinsurance broker based in the United Kingdom) and H.W. Wood Limited (an international reinsurance broker based in the United Kingdom) resolved a Foreign Corrupt Practices Act enforcement action for “participation in a corrupt scheme to pay bribes to Ecuadorian government officials.”

The net settlement amount in the Tysers enforcement action is $46.5 million and the net settlement amount in the H.W. Wood enforcement action is $508,000 based on inability to pay.

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