No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home FCPA

Modern Enforcement: Rolls-Royce’s $800M Global Settlement

by Philip Bezanson
February 10, 2017
in FCPA, Featured
Rolls-Royce building

Case Highlights Growing Trend in Collaborative Enforcement

This article by Bracewell white-collar attorneys details the resolution of parallel investigations by U.S., U.K. and Brazilian authorities. Rolls-Royce’s long-running scheme to bribe government officials across the globe in exchange for government contracts has resulted in a record enforcement action. Learn about what this could mean for future investigations.

By: Phil Bezanson, Glen Kopp and Carolyn Robbs Bilanko

Rolls-Royce plc, a UK-based company that manufactures engines and generators for the aerospace, defense, marine, and energy sectors, has agreed to pay over $800 million to resolve parallel investigations by U.S., UK, and Brazilian authorities into a long-running scheme to bribe government officials across the globe in exchange for government contracts.

According to a deferred prosecution agreement (DPA) unsealed on January 17, 2017, Rolls-Royce was required to admit that between 2000 and 2013, it conspired to violate the Foreign Corrupt Practices Act by paying more than $35 million in bribes through third parties to foreign officials in various countries in exchange for confidential information and contracts for Rolls-Royce and its affiliated entities. Specifically:

  • In Thailand, Rolls-Royce used intermediaries to pay $11 million in bribes to officials at state-owned and -controlled oil and gas companies that awarded seven contracts to the company during the same time period.
  • In Brazil, Rolls-Royce used intermediaries to pay $9.3 million in bribes to officials at a state-owned petroleum corporation that awarded multiple contracts to the company during the same time period.
  • In Kazakhstan, Rolls-Royce paid commissions of $5.4 million to multiple advisors, knowing that at least a portion of the payments would be used to bribe officials involved in a state-owned joint venture that was building a pipeline between Kazakhstan and China. Rolls-Royce also hired a local distributor, knowing that it was actually owned by a high-ranking official with decision-making authority over the company’s ability to continue operating in the market. During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.
  • In Azerbaijan, Rolls-Royce used intermediaries to pay $7.8 million in bribes to officials at the state-owned and -controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period.
  • In Angola, Rolls-Royce used an intermediary to pay $2.4 million in bribes to officials at a state-owned and -controlled oil company, which awarded three contracts to Rolls-Royce during the same time period.
  • In Iraq, Rolls-Royce supplied turbines to a state-owned and -controlled oil company. When Iraqi officials expressed concerns about the turbines and threatened to blacklist Rolls-Royce from doing future business in Iraq, Rolls-Royce’s intermediary paid bribes to the officials to persuade them to accept the turbines and not blacklist the company.

Under the DPA, Rolls-Royce agreed to pay nearly $170 million to the U.S. Department of Justice (DOJ) and to continue to cooperate with DOJ’s ongoing investigation of individuals. In determining this penalty, DOJ considered the following: (1) that Rolls-Royce did not disclose the criminal conduct to DOJ until after the media began reporting allegations of corruption and after the U.K. Serious Fraud Office (SFO) initiated an inquiry into the allegations; (2) the company’s cooperation with DOJ’s investigation; (3) the company’s significant remedial measures, including terminating business relationships with employees and third-party intermediaries who were implicated in the corrupt scheme, enhancing its due diligence compliance procedures regarding intermediaries, and implementing new and enhanced internal controls to address and mitigate corruption and compliance risks; and (4) parallel resolutions reached by the company with the SFO (under which Rolls-Royce paid almost $605 million) and Brazilian Ministério Público Federal (MPF) (under which Rolls-Royce paid almost $25.6 million). The criminal penalty assessed by DOJ—which is a 25-percent reduction from the bottom of the U.S. Sentencing Guidelines fine range—is intended to reflect those factors. Throughout its investigation, DOJ received substantial assistance from other organizations, including the U.S. Postal Inspection Service, the FBI’s International Corruption Squad in Washington, D.C., the SFO and MPF, and law enforcement offices in Austria, Germany, the Netherlands, Singapore, and Turkey.

The global resolution is noteworthy for several reasons. First, DOJ’s investigation of Rolls-Royce is another example of DOJ’s increased and more sophisticated efforts to coordinate with its counterparts abroad and other U.S. agencies at home to identify, investigate, and prosecute violations of anti-corruption laws. Second, the Rolls-Royce resolution fits the trend in recent years of government agencies targeting individuals: both DOJ and SFO’s investigations are ongoing, so prosecutions of individuals in connection with the case still may be announced. Third, it demonstrates the growing power of the SFO and its use of DPAs: the Rolls-Royce inquiry is the largest ever single investigation carried out by the SFO; it reportedly cost about $16 million and approximately 70 people participated, and it is the third use of a DPA since that option became available to U.K. prosecutors in 2014.

Finally, the Rolls-Royce resolution demonstrates the ever-higher dollar amount federal agencies are seeking from companies to settle charges of corruption: three of the four most expensive anti-corruption resolutions (Odebrecht, Rolls-Royce, and VimpelCom) took place in just the last 12 months. As noted above, the Rolls-Royce settlement would have been even higher if not for the company’s extensive cooperation during DOJ’s investigation. Rolls-Royce conducted a thorough internal investigation, gave multiple factual presentations to DOJ, produced witnesses for interviews, and agreed to continue such efforts for the next three years. Rolls-Royce cooperated similarly with the SFO, which cited the company’s cooperation as one of the principle reasons why the DPA was in the interests of justice. This continues a trend of government agencies more clearly explaining how they are tangibly rewarding companies for cooperating with government inquiries, and will help shape the standard of what is expected from companies under investigation in the future.


Tags: Anti-CorruptionDOJ
Previous Post

A Closer Look at Ingredion’s E&C Program: Technology

Next Post

Staying Audit-Ready as Regulators Make Compliance a Top Priority

Philip Bezanson

Philip Bezanson

Phil BezansonPhil Bezanson is a partner at Bracewell LLP in Seattle, where he represents corporate clients, senior management and boards of directors, as well as individual clients in internal investigations, securities enforcement, criminal defense and regulatory matters. Phil is a member of the Bracewell LLP team that has worked on recent high-profile and complex cases, including the Deepwater Horizon explosion; the George Washington Bridge lane closure; General Motors’ ignition switch investigations; “Pay to Play” cases in New York, New Mexico and Illinois; the stock options backdating cases; and a variety of matters involving the Foreign Corrupt Practices Act, accounting and public disclosure practices at publicly traded companies and trading desks at financial institutions.

Related Posts

doj-flag-sculpture

Fraud Section’s 2022: A Year of Individual Accountability, Cooperation With Foreign Authorities & Pushing Compliance Programs

by Morgan Lewis
March 15, 2023

The DOJ’s Fraud Section had a banner year in 2022, posting its highest number of convictions in a single year...

Incentives to report FCPA violations greater than ever for compliance officers

New DOJ Guidance Charts a Way Forward on Ephemeral Messaging

by Mary Shirley
March 8, 2023

New guidance from the DOJ on what makes an effective compliance program should be mandatory reading for every corporate integrity...

abac

1-2-3s of ABAC Compliance Programs

by Jag Lamba
March 1, 2023

Despite the proliferation of laws aimed at fighting bribery and corruption, a recent international report found that most countries are...

Hogan Lovells Global Corruption Outlook 2023_f

Global Bribery and Corruption Outlook 2023

by Corporate Compliance Insights
February 16, 2023

What's to come this year? Demands for heightened oversight of employees, subsidiaries and third parties 2023 Update Global Bribery and...

Next Post
man at desk giving a thumbs up

Staying Audit-Ready as Regulators Make Compliance a Top Priority

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT