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Albemarle Settles DOJ and SEC FCPA Cases for $218 Million (Part I of III)

Albemarle Corporation (Albemarle), a specialty chemicals manufacturing company located in Charlotte, North Carolina, agreed to pay more than $218 million to settle FCPA investigations with DOJ and the SEC stemming from bribery payments in Vietnam, Indonesia and India.

Albemarle entered into a three-year non-prosecution agreement (“NPA”) with DOJ and agreed to pay a penalty of approximately $98.2 million and an administrative forfeiture of approximately $98.5 million. 

In its first FCPA settlement applying its Compensation Incentives and Clawbacks Pilot Program announced in March 2023, DOJ agreed to a $763,453 penalty reduction for bonuses that Albemarle withheld from qualifying employees.

In a parallel proceeding, Albemarle agreed to pay approximately $103.6 million in disgorgement and prejudgment interest.  DOJ agreed to credit approximately $81.9 million to the forfeiture payment against disgorgement Albemarle agreed to pay the SEC.

Between 2009 and 2017, Albemarle paid bribes to various foreign officials through its third-party sales agents and subsidiaries employees to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India. Albemarle earned ill-gotten profits equal to approximately $98.5 million from its bribery activities. 

.Applying its revised and enhanced Corporate Enforcement Policy, DOJ entered into a NPA with Albemarle rather than a deferred prosecution agreement (“DPA”), and awarded Albemarle  a 45 percent discount from the bottom of the sentencing guideline range.

In reaching this beneficial resolution, DOJ cited several factors, including: Albemarle’s voluntary disclosure of its illegal conduct prior to DOJ’s knowledge of the bribery scheme, but noted that such disclosure was not “reasonably prompt” as defined in the CEP and U.S. Sentencing Guidelines § 8C2.5(g)(1). DOJ cited the fact that Albemarle first learned of allegations of bribery in Vietnam 16 months before its initial disclosure to DOJ.  Albemarle confirmed the bribery activity in Vietnam 9 months before its initial disclosure to DOJ.

Additionally, Albemarle received credit for: (i) promptly providing information obtained through its internal investigation; (ii) making regular and detailed presentations to DOJ; (iii) proactively identifying information previously unknown to DOJ; (iv) promptly responding to DOJ requests; (v) voluntarily making foreign-based employees available for interviews in the United States; (vi) collecting and producing voluminous relevant documents and translations to the DOJ; and (vii) producing documents to DOJ from foreign countries in ways that did not implicate foreign data privacy laws.

With respect to remediation efforts, DOJ cited Albemarle’s extensive remedial measures including: (i) initiating remedial measures based on its internal investigation prior to beginning of DOJ’s investigation; (ii) disciplining employees involved in the misconduct, including terminating 11 employees and withholding bonuses from 16 employees; (iii) strengthening its anti-corruption compliance program by investing in compliance resources, expanding its compliance function with experienced and qualified personnel, and taking steps to embed compliance and ethical values at all levels of its business organization; (iv) transforming its business model and risk management process to reduce corruption risk in its operation and to embed compliance in the business, including implementing a go-to-market strategy that resulted in eliminating the use of sales agents throughout the company, terminating hundreds of other third-party sales representatives, such as distributors and resellers, and shifting to a direct sales business model; (v) providing extensive training to its sales team and restructuring compensation and incentives so that compensation is no longer tied to sales amounts; (vi) using data analytics to monitor and measure its compliance program’s effectiveness; and (vii) engaging in continuous testing, monitoring, and improvement of all aspects of its compliance program.

Pursuant to the NPA, Albemarle has agreed to continue to cooperate with DOJ in any ongoing or future criminal investigations relating to this conduct. In addition, Albemarle agreed to continue to enhance its compliance program and provide reports to DOJ regarding remediation and the implementation of compliance measures for the three-year term of the NPA.

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