Embraer’s Open-Ended Investigation

Brazil-based Embraer S.A., the world’s third largest commercial aircraft manufacturer, updated its FCPA disclosure this week.

In its Form 6-K (Report of Foreign Private Issuer) filed with the SEC on June 11, Embraer said:

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The Company received a subpoena from the SEC, which inquired about certain operations concerning sales of aircraft abroad. In response to this SEC-issued subpoena and associated inquiries into the possibility of non-compliance with the U. S. Foreign Corrupt Practices Act (“FCPA”), the Company retained outside counsel to conduct an internal investigation on transactions carried out in three specific countries.

The investigation remains ongoing and the Company, through its outside counsel, continues to cooperate fully with the authorities responsible for reviewing the matter (SEC and US Department of Justice). Management, with the support of the Company’s outside counsel, has concluded that, as of March 31, 2012, it is still not possible to estimate the duration, scope or results of the investigation. In the event that an illegal activity is identified or the parties enter into an agreement to bring finality to the matter, the Company may be required to pay substantial fines, as provided in the FCPA. Management, based upon the advice of the Company’s outside counsel, believes that, as of March 31, 2012, there is no basis for estimating a provision or quantifying any possible contingency.

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