Deep Dive into the Gunvor FCPA Settlement

Corruption Crime & Compliance

You have to give the Justice Department credit - after two slow enforcement years, DOJ is starting off 2024 with a relative "bang;" first, DOJ reached a large settlement with SAP in January, and now, DOJ has reached a blockbuster settlement with Gunvor S.A. for $661 million. Gunvor is one of the world's largest commodities trading companies. DOJ's settlement represents a "return" to its long-standing aggressive approach to FCPA enforcement. DOJ did not permit Gunvor to enter into a deferred or non-prosecution agreement. Instead, DOJ required Gunvor to plead guilty to one count of FCPA conspiracy. Following the plea agreement, the court sentenced Gunvor to pay a criminal monetary penalty of $374,560,071 and to forfeit $287,138,444 in ill-gotten gains. The sentence includes credits of up to one-quarter of the criminal fine each for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorean authorities into the same misconduct so long as the payments are made within one year. The Office of the Attorney General of Switzerland simultaneously announced a parallel resolution of its investigation into Gunvor’s misconduct that involved the payment of approximately $98 million by Gunvor to Swiss authorities. Gunvor's conduct stretched over nearly a decade and involved systemic bribery payments to officials of the Ecuadorian Ministry of Hydrocarbons and Petroecuador, the Ecuadorian state-owned oil company, in exchange for valuable contracts to acquire oil products. In total, Gunvor earned more than $384 million in profits from the business it corruptly obtained related to Petroecuador. In this episode, Michael Volkov reviews the Gunvor FCPA settlement.

• Gunvor's recent $661 million FCPA settlement with DOJ for bribery in Ecuador signifies a return to aggressive enforcement. The plea agreement and forfeiture highlight the consequences of anti-corruption violations for global companies.
• Prior individual enforcement actions preceded Gunvor's corporate resolution, showcasing a pattern in FCPA cases. The company's cooperation, including document production and internal investigation, played a crucial role in the resolution.
• Gunvor's implementation of remedial measures post-bribery scheme reflects a commitment to compliance. Enhancements to ethics programs and controls demonstrate a proactive approach to mitigating risks and ensuring regulatory compliance.
• The bribery scheme involving corrupt third parties and shell companies underscores the importance of robust monitoring and due diligence. Gunvor's delayed response to red flags highlights the need for swift action in high-risk activities.
• Gunvor's cooperation with the investigation, including sharing facts and facilitating interviews, showcases a commitment to transparency and accountability. Collaboration with authorities is essential in resolving compliance issues and maintaining credibility.

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