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Embraer continues investigation, can’t predict potential impact

Brazilian aircraft maker Embraer SA said Friday its FCPA investigation is ongoing and it’s still too early to tell what impact there might be from the fall out.

The company received a subpoena from the SEC in 2010 relating to possible FCPA violations. The DOJ is also investigating the company.

The focus initially was on three unnamed countries. Earlier this year, Embraer said it voluntarily expanded the investigation to two more countries. Last week’s disclosure referred to ‘additional countries’ but didn’t specifying their number.

Embraer SA, the world’s third largest commercial aircraft manufacturer, trades on the NYSE under the symbol ERJ.

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Here’s the full FCPA disclosure from the Form 6-K (Report of Foreign Private Issuer) filed by Embraer SA with the SEC on July 26,:

We received a subpoena from the SEC in September, 2010, 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, we retained outside counsel to conduct an internal investigation on transactions carried out in three specific countries.

Since then, in response to additional information, the Company has voluntarily expanded the scope of the internal investigation to include sales in additional countries and has reported on those matters to the SEC and the U.S. Department of Justice, which are the responsible authorities. The investigation remains ongoing and we will continue to respond to any additional information, as circumstances warrant. We, through our outside counsel, continue to cooperate fully with the SEC and the DOJ. The Company, with the support of our outside counsel, has concluded that it is still not possible to estimate the duration, scope or results of the internal investigation or the government’s review. In the event that the authorities take action against us or the parties enter into an agreement to settle the matter, we may be required to pay substantial fines and/or to incur other sanctions. The Company, based upon the opinion of our outside counsel, believes that there is no basis for estimating reserves or quantifying any possible contingency.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here. Content for this post was also provided by ethiXbase, the world’s largest source of anti-corruption enforcement and compliance information. 

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