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 CORRUPTION AND BRIBERY INTRODUCTION TO OIL AND GAS CORRUPTION AND BRIBERY EXPORT CONTROL

US, OECD and UK

代写留学生论文1970s USA – SEC investigation 400 companies – illegal payments around $300m

However, US trade disadvantage – so negots with OECD.

1997 33 countries signed up OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions

Starting point is therefore the US law: Foreign Corrupt Practices Act 1977.

5 points:

Corrupt Influence: intent to influence or induce

Payment or offer of payment: money or anything of value: actual payment not necessary

Business purpose: to obtain or retain business

Recipient: foreign officials or politicians or political parties

Payer: US territory or nationality: A foreign company or person is now subject to the FCPA if it causes, directly or through agents, an act in furtherance of the corrupt payment to take place within the territory of the United States.

Example: Vetco Gray:

2002: US and UK subsidiaries fined by US authorities $5.25m each in respect of $1m illegal bribes in Nigeria. Further $5.9 to be paid as interest and restitution. $10.5m civil penalty – to be deemed paid if the fines were paid.

2007: VG Controls Inc and VG Controls Ltd (UK company) and VG UK Ltd (UK company) fined respectively: $6m, $8m and $12m respectively and required to subject themselves to independent compliance audit. Fines in respect of payments of approx $2.1m spread over around 378 payment in Nigeria (around 5-6000 each). Not big payments. Paid through freight forwarding and customs clearance companies to speed up the transit of employee and equipment into Nigeria.

Two further points therefore:

Facilitation

Use of third parties
Facilitation payments are allowed: payments for permits, licenses, processing documents including visas and work permits, providing police protection and supply of amenities (water, electricity etc), loading and unloading cargo.(list from US Dept of Justice and Dept of Commerce guidelines)

Wonder where VG went wrong?

Use of third parties.

Can also argue the payment was lawful in the country it was made.

Sanctions: fines to company of $2m; individuals up to $100k and 5 years in jail (alt fine can be up to twice the benefit that was sought by making the corrupt payment)

Also

Loss of federal business (and likely state business too)

Loss of confidence of suppliers

Inability to participate in federal procurement programmes

Denial of export licenses

Also: eg from competitors, private action for 3x damages under the Racketeer Influences and Corrupt Organisations Act

Red Flags

Qualifications of partners
Business experience
Business Links
Connections
Reputation
Clientele
Payment patterns