A Norwegian contractor of Petrobras has announced the results of an internal investigation into its connections with Brazil’s Petrobras, concluding it is more likely than not that irregular payments were made during contract negotiations with Petrobras. Because Petrobras American Depository Receipts trade on the New York Stock Exchange and it is subject to reporting requirements, Sevan Marine may have violated the Foreign Corrupt Practices Act (FCPA).
Sevan Marine designs and makes cylinder platforms for offshore drilling and floating production. The company’s shares trade on the Oslo stock exchange. As such, it would not normally be subject to the reach of the SEC and the DOJ through the FCPA unless it is operating in the United States. However, because Petrobras is both a state-owned enterprise and itself covered under the FCPA, authorities may choose to bring an enforcement action against the company under a conspiracy theory or another option.
Sevan Marine is not the first company to be implicated in the Petrobras scandal. Transocean, a fleet of mobile offshore drilling units that trades on the New York Stock Exchange under the symbol RIG, is among the companies that may have violated the FCPA through payments to executives of Petrobras to obtain contracts. A Petrobras executive in Brazil testified that he received payments from an agent of the company for a rig-operation contract.
Corruption in Brazil has been a major story over the past year, since the billion dollar Petrobras scandal broke in the media. Other companies are now investigating the possibility of corruption internally if they won contracts in connection with either the FIFA World Cup or the 2016 Summer Olympics. Brazil, last I checked, was second in the geographic rankings for the country that served as the source of the most FCPA investigations. China is #1, by a large amount.
Questions about this or other FCPA issues? We have put together an informational guide for FCPA whistleblowers that may answer your question. If you have need additional information, contact one of our FCPA whistleblower attorneys. We can also assist you in reporting your evidence of bribery by a publicly traded company or other covered entity to the Securities and Exchange Commission. Please contact an attorney via our contact form or call 1-800-590-4116.