Fines for three Swiss subsidiaries of SBM Offshore for PEP bribes

Bern, 23.11.2021 - The Office of the Attorney General of Switzerland (OAG) has sentenced three Swiss subsidiaries of the multinational group SBM Offshore and ordered them to pay an amount of over CHF 7 million, including a fine of CHF 4.2 million.

These three companies failed to take all the reasonable organisational measures required to prevent the bribery of foreign public officials in

• Angola,
• Equatorial Guinea and
• Nigeria

In a summary penalty order dated 18.11.2021, the OAG sentenced the Swiss companies SBM Holding Inc. SA, Single Buoy Moorings Inc. and SBM Production Contractors Inc. SA and ordered them to pay an amount of over CHF 7 million, including a fine of CHF 4.2 million.

As a result of multiple and serious deficiencies in their internal organisation, between 2006 and the start of 2012 the three companies failed to prevent the bribery of public officials in Angola, Equatorial Guinea and Nigeria (Art. 102 para. 2 Swiss Criminal Code [SCC] in conjunction with Art. 322septies SCC).

The Swiss subsidiaries make up the financial operations centre of the SBM Offshore group, which specialises in the design, construction and supply of maritime systems and equipment for the petroleum and gas industry.

Context

The summary penalty order dated 18.11.2021 is the latest stage in proceedings conducted by the OAG that led to a judgment issued on 6 July 2020 by the Criminal Chamber of the Federal Criminal Court (SK.2020.8) in which

• A former executive of the SBM Offshore group and of SBM Holding Inc. SA was convicted under a simplified procedure of bribing foreign public officials in Angola (Art. 322septies SCC).

This summary penalty order is also connected with settlements reached, primarily by SBM Offshore N.V., in the

• Netherlands in 2014,
• United States of America in 2017 and
• Brazil in 2018.

It shows the OAG’s willingness to prosecute and penalise companies engaging in cross-border corruption from Switzerland, even when part of the allegations concerned has already been the subject of settlements abroad.

Systemic corruption 

The OAG’s investigation revealed that between 2006 and the start of 2012, bribes totalling more than USD 22 million and close to EUR 1 million were paid to public officials in Angola, Equatorial Guinea and, to a lesser extent, Nigeria.

The money came from bank accounts held by SBM Holding Inc. SA and were channelled with the aid of intermediaries acting through shell companies, under the cover of sham contracts concluded with the three Swiss companies now convicted.

These criminal practices were part of a system specifically set up to pay substantial bribes to foreign public officials with the aim of securing contracts for the SBM Offshore group.

The extent and the duration of the acts of corruption committed within the three companies now convicted, and throughout the SBM Offshore group, show that, during the period under investigation, the assessment of the risk of corruption, the measures and procedures for preventing corruption and the related controls, in particular in relation to the activities of intermediaries, were either non-existent, or wholly inadequate.

These failures appear all the more serious in that the intermediaries used by the three companies now convicted were supposed to provide services in relation to the oil and gas industry, which is particularly exposed to the risk of corruption, and in connection with contracts involving companies owned by States notoriously prone to endemic corruption.

The lack of organisation thus established was common to all three of the companies convicted, which shared the same offices and, in part, the same staff and managers.

Fine, compensatory claim and partial abandonment of proceedings

Under Article 102 paragraph 3 SCC, the level of fine imposed on a company that has been found criminally liable is based primarily on the seriousness of the offence, the lack of organisation, the damage caused and the financial capacity of the offender. The maximum fine under the law is CHF 5 million (Art. 102 para. 1 in fine SCC).

The three

1. SBM Holding Inc. SA,
2. Single Buoy Moorings Inc. and
3. SBM Production Contractors Inc. SA

Have therefore been ordered to pay a fine of CHF 4.2 million, which in particular takes account of lapse of time since the bribes were paid, and the measures that the SBM Offshore group has taken since 2012 to bring an end to corrupt practices.

In addition, SBM Holding Inc. SA, Single Buoy Moorings Inc. and SBM Production Contractors Inc. SA have been ordered to pay a compensatory claim of CHF 2.8 million in connection with the bribes paid to officials in Nigeria. Under Article 71 paragraph 1 SCC, a compensatory claim may be ordered if the assets liable to forfeiture are no longer directly available.

However, it was not possible to order compensatory claims in connection with the bribes paid in Angola and Equatorial Guinea, because the related profits made by the SBM Offshore group were already included in the amounts paid within the frame of the settlements reached in the Netherlands and the United States of America in 2014 and in 2017 respectively.

According to the relevant legal principles, it is not possible to order twice the forfeiture of assets stemming from the same bribes.

Finally, it should be noted that in a separate order partially abandoning proceedings dated 18.11.2021, the OAG closed the proceedings relating to suspicions of inadequate organisation connected with the bribery of foreign public officials in Brazil, on the grounds that SBM Holding Inc. SA was a party to the settlement concluded in Brazil in 2017 connected with the same facts (see Art. 319 para. 1 let. e and 8 para. 2 let. c of the Criminal Procedure Code [CrimPC]).

Proceedings were also abandoned to the extent that they were directed against unknown perpetrators, as the investigation was unable to establish that any other acts of bribery of foreign public officials had been committed within the Swiss companies of the SBM Offshore group between 2006 and 2012 (see Art. 319 para. 1 let. a CrimPC).

The summary penalty order and the order partially abandoning proceedings dated 18.11.2021 may be inspected on request, subject to the usual conditions, at the OAG’s Legal Services Division (rechtsdienst@ba.admin.ch).

https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-86009.html