Last week, on June 25, 2019, TechnipFMC agreed to settle FCPA violations with the Justice Department for $296 million that occurred in Iraq and Brazil.  TechnipFMC was created in 2017 through the merger of Technip, a French company, and FMC Technologies, a Houston-based company. The SEC’s investigation is still pending.

The combined FCPA settlement was the result of separate FCPA violations by each of the predecessor companies, Technip and FMC Technologies. Technip’s activities centered on bribery payments in Brazil, while FMC Technologies’ conduct in Iraq was uncovered as part of the larger and ongoing investigation of Unaoil, a Monaco-based company.

Technip is now an FCPA recidivist.  In 2010, Technip paid $338 million in criminal penalties and disgorgement for FCPA violations in Nigeria.  Technip was part of the infamous TSKJ joint venture, which was headed by KBR and included ENI from Italy.

In this recent enforcement action, TechnipFMC entered into a three-year deferred purchase agreement (HERE), conditionally charging Technip FMC with two counts to conspiracy to violate the FCPA.  DOJ did not impose a corporate monitor to TechnipFMC but required annual compliance reports.  Technip’s US subsidiary plead guilty to FCPA conspiracy and agreed to pay a $500,000 fine. (HERE and HERE).

Approximately $214 million of the criminal penalty will be paid to Brazilian authorities, leaving approximately $81.9 million to be paid to DOJ.

Technip has reached a resolution with the SEC but that resolution has not yet been announced.

Technip’s former consultant in Brazil, Zwi Skornicki, plead guilty to an FCPA violation for his conduct in Brazil.

Under the FCPA Corporate Enforcement Policy, TechnipFMC did not receive voluntary disclosure credit, but did receive credit for full cooperation during the investigation.  TechnipFMC received remediation credit for enhancements to its compliance program and disciplinary measures taken, including prohibiting the use of commercial consultants in Brazil.

Since TechnipFMC is a recidivist, DOJ included a 25 percent reduction in the criminal penalty from near the middle of the applicable guideline range rather than from the bottom of the range. 

Brazil: From 2003 until at least 2013, Technip conspired with Singapore-based Keppel Offsore & Marine, as a joint venture partner, and Zwi Skornicki, a former consultant, to pay $69 million in bribes.  Technip labeled the payments as “commissions” to Skornicki, who in turn, made the payments to government officials at Petrobas.  (In 2017, Keppel Offshore paid $422 million to resolve FCPA charges in the US, Brazil and Singapore).

Iraq: Beginning in 2008 and continuing until at least 2013, FMC bribed seven government officials in Iraq, through Unaoil, a Monaco-based intermediary company in order to secure metering technology services for oil and gas production in Iraq.  FMC effectuated the bribery scheme by having the intermediary make bribery payments directly to Iraqi officials, or by having the intermediary make such payments with the assistance of sub-agents.  The intermediary funded the bribery scheme and was repaid with commission payments from contracts successfully awarded to FMC.

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