After three years of satisfying obligations under a deferred prosecution agreement, the charges against Statoil ASA for violating the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA) have been dismissed with prejudice. Statoil is an international oil company headquartered in Norway and listed on the New York Stock Exchange.
"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," said Assistant Attorney General Lanny A. Breuer. "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."
"This case shows that deferred prosecution agreements against corporations can work as an important middle ground between declining prosecution and obtaining the conviction of a corporation," said U.S. Attorney Prett Bharara. "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."
On Oct. 13, 2006, the Department of Justice filed a criminal information charging that in 2001 and 2002, Statoil sought to expand its business internationally and focused specifically on Iran as a country in which to secure oil and gas development rights. At the time, Iran was awarding contracts for the development of the South Pars field, one of the world’s largest natural gas fields. In 2001, Statoil developed contacts with and began negotiating with an Iranian government official who could influence the award of oil and gas contracts in Iran. Statoil then entered into a "consulting contract" with an offshore intermediary company. The purpose of that "consulting contract" – which called for the payment of more than $15 million over 11 years – was to induce the Iranian official to use his influence to help Statoil obtain a contract to develop portions of the South Pars field, and to open doors to future Iranian oil and gas projects. Two bribe payments totaling more than $5 million were made by wire transfer, and Statoil was awarded a South Pars development contract that was expected to yield millions of dollars in profit. The criminal information charged that Statoil violated the FCPA by making the corrupt payments, and also committed securities fraud by falsifying its books and records in characterizing the bribe payments as "consulting fees."
According to the deferred prosecution agreement, Statoil acknowledged making the corrupt payments, agreed to pay a $10.5 million penalty, and agreed to the appointment of an independent compliance consultant for a three-year period to review and periodically report on the company’s compliance with the deferred prosecution agreement and to conduct a comprehensive review of the controls, policies and procedures of Statoil related to compliance with the FCPA. Under the terms of the deferred prosecution agreement, the criminal information was to remain pending until it was either dismissed or prosecuted in order to allow Statoil to demonstrate its good conduct.
The Department of Justice has received the final report of the compliance consultant and determined that Statoil has fully complied with all of its obligations under the deferred prosecution agreement, including the obligation to adopt the compliance-related recommendations of the compliance consultant. Accordingly, on Nov. 18, 2009, the Department filed a motion with the court to dismiss with prejudice the criminal information against Statoil. Yesterday, in federal court in Manhattan, U.S. District Judge Richard J. Holwell granted that motion and dismissed the charges.
This case was handled by Deputy Chief Mark F. Mendelsohn of the Fraud Section as well as Assistant U.S. Attorney Ray Lohier and former Assistant U.S. Attorney Deborah Landis of the Southern District of New York. Fraud Section Trial Attorney Joseph Capone also provided assistance on this case.