Honeywell to Pay Over $200 Million to Settle FCPA Charges Over Conduct in Brazil
Multinational conglomerate Honeywell will pay $202.7 million to resolve anti-corruption Foreign Corrupt Practices Act investigations with both U.S. and Brazilian authorities, the company said in a Dec. 19 press release. The conduct subject to the investigations involved Honeywell's operations in Brazil with the state-owned Petroleo Brasileiro (Petrobras) and an intermediary, Unaoil.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
As part of this payment, one of Honeywell's U.S. subsidiaries, Honeywell UOP, will pay over $160 million to lay parallel bribery investigations from the U.S. and Brazil to rest, DOJ announced. The subsidiary entered into a three-year deferred prosecution agreement with DOJ to settle the case, agreeing to continue cooperating with the agency in any future or ongoing criminal investigations "relating to this conduct." Honeywell UOP and Honeywell will also continue to boost their compliance programs and give reports to DOJ over the implementation of the compliance measures for the three-year period, though no monitor will be required for the company.
From 2010 to 2014, Honeywell UOP "conspired to offer" around a $4 million bribe to a "then-high-ranking" Petrobras executive in Brazil, DOJ said. The money was offered to "secure improper advantages in order to obtain and retain business from Petrobras in connection with" the subsidiary's efforts to win a $425 million contract to "design and build an oil refinery called Premium," DOJ said. To send the bribe, Honeywell UOP entered into an agreement with a sales agent. The subsidiary won the contract, netting the subsidiary around $105.5 million in profits.
Honeywell UOP will pay a criminal penalty of around $79 million, $39.6 million of which will be credited against "amounts the company has agreed to pay to authorities in Brazil" over related proceedings. The subsidiary will also pay around $81 million in "disgorgement and prejudgment interest as part of the resolution of a parallel investigation by the SEC," DOJ said.
Honeywell added that it resolved bribery charges "relating to a foreign subsidiary's contract with the intermediary, Unaoil, in Algeria, executed in 2011," and that the resolutions over Unaoil and Petrobras "entirely resolved the" two investigations. Honewell also said it "has meaningfully redesigned and continued to evolve its global ethics and compliance program to meet the evolving risk environment."
“Honeywell UOP offered to pay millions of dollars in bribes to a high-ranking executive at Brazil’s state-owned oil company to win a lucrative contract,” Assistant Attorney General Kenneth Polite said. “Today’s resolution once again demonstrates that in our relentless fight against corruption, the Department of Justice will work together with our partners, both domestic and foreign, to hold companies accountable for their criminal conduct.”