Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, May 17, 2011
Tenaris S.A. Agrees to Pay $3.5 Million Criminal Penalty to Resolve Violations of the Foreign Corrupt Practices Act

WASHINGTON – Tenaris S.A., a publicly traded corporation headquartered in Luxembourg, has agreed to pay a $3.5 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), and has entered into a non-prosecution agreement with the Department of Justice, announced Assistant Attorney General Lanny A. Breuer for the Justice Department’s Criminal Division.

 

Tenaris, a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world, admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company, and failed to record such payments accurately in Tenaris’s books and records. In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage. Tenaris agreed to pay the agent 3.5 percent of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.

 

According to the agreement, Tenaris voluntarily disclosed this conduct to the department in a timely and complete manner, conducted an internal investigation, provided thorough, real-time cooperation to the department and the U.S. Securities and Exchange Commission (SEC), and undertook extensive remediation, including voluntary enhancements to its compliance program. The criminal penalty in this case constitutes a substantially reduced monetary penalty and reflects the department’s commitment to providing meaningful credit to Tenaris for its extraordinary cooperation with the department. As outlined in the agreement, Tenaris has agreed to fully cooperate with investigations by law enforcement authorities of the company’s corrupt payments and to adhere to a set of enhanced corporate compliance and reporting obligations.

 

FCPA enforcement action documents can be found at www.justice.gov/criminal/fraud/fcpa . Information about the Principles of Federal Prosecution of Business Organizations can be found at www.justice.gov/usao/eousa/foia_reading_room/usam/title9/28mcrm.htm

 

In a related matter, Tenaris reached a settlement today with the SEC in which Tenaris entered into a deferred prosecution agreement and agreed to pay $5,428,338 in disgorgement and prejudgment interest. Tenaris also agreed to comply with certain undertakings regarding its FCPA compliance program.

 

The case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy, formerly a Trial Attorney in the Criminal Division’s Fraud Section.  The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC and the FBI’s Houston Field Office during the course of this investigation .

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