Panalpina’s Practices Fall Under the FCPA Spotlight

February 6, 2007 — The DOJ reports Vetco’s admission that payments to Nigerian Customs Officials violated the FCPA. The DOJ says, “These corrupt payments were paid through a major international freight forwarding and customs clearance company to employees of the Nigerian Customs Service, and coordinated largely through Vetco Gray Controls Inc.’s offices in Houston. . . . From at least September 2002 to at least April 2005, . . . [Vetco] authorized that agent to make at least 378 corrupt payments totaling approximately $2.1 million to Nigerian Customs Service officials to induce those officials to provide the defendants with preferential treatment during the customs process.”

April 26, 2007 — Tidewater Inc. announces an internal investigation of its Nigerian operations. “The Audit Committee commissioned the internal investigation in late February 2007 after management brought to its attention a settlement earlier that month of well-publicized criminal FCPA proceedings (the second in recent years) involving Vetco Gray Controls, a Houston-based oil service company with substantial operations in Nigeria. Tidewater’s management and the Audit Committee were concerned that the Company’s Nigerian affiliate used the same third-party agent for its temporary importations in Nigeria that was thought to be significantly implicated in the 2007 Vetco Gray proceedings.”

July 24, 2007 — Panalpina says some customers of its U.S. subsidiary have “been requested by U.S. authorities to produce documents related to the provision of its services to Nigeria for a specific customer and its contractor. This request was triggered by the plea agreement of such customer with the U.S. authorities for allegedly making improper payments to Nigerian officials to secure preferential customs treatment. . . . U.S. authorities have extended the scope of their review to Panalpina’s documents related to services into Nigeria, Kazakhstan and Saudi Arabia for a limited number of customers.”

July 25, 2007 — rigzone.com carries a Dow Jones Commodities News story, reporting that the DOJ sent letters on July 2, 2007 to eleven oil and oil-service companies, “asking them to detail their relationship with Panalpina . . . The Justice Department letter, which was read to Dow Jones, cited concerns about payments that may violate the U.S. Foreign Corrupt Practices Act. The oil and oil-service firms were asked to list the countries where Panalpina provided it with services in the past five years, and to specify what it paid for those services. Each firm also was asked to meet separately with federal prosecutors in Washington, D.C. A Justice Department spokesman didn’t respond to requests for comment.”

(emphasis added)

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As mentioned in an earlier post, similar internal investigations into Nigerian operations have now been announced by Tidewater, Nabors Industries, Transocean, GlobalSantaFe Corp., Noble Corp. and Global Industries.

View the DOJ News Release Here.

View the Tidewater News Release Here.

View the Panalpina News Release Here.

View the rigzone.com Story Here.