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Tenaris pays SEC $78 million to settle recidivist FCPA offenses

Oil and gas pipe manufacturer Tenaris paid the SEC $78 million Thursday to resolve charges that it violated the Foreign Corrupt Practices Act by providing improper payments to a Petrobras official in Brazil.

In an internal administrative order, the SEC charged the Luxembourg-based company with violating the FCPA’s anti-bribery, books and records, and internal accounting controls provisions.

Without admitting or denying the SEC charges, Tenaris agreed to pay $53 million in disgorgement and pre-judgment interest and a civil penalty of $25 million.

According to the SEC, between 2008 and 2013, Tenaris’ Brazilian subsidiary paid around $10.4 million in bribes to an unnamed official at Petrobras, the Brazil state-owned oil and gas giant.

To conceal the bribes, the Petrobras official hired an associate who arranged the formation of an Uruguayan shell company, the SEC said.

According to the SEC, fake contracts were executed with the Uruguayan company for purported past and future consultancy and advisory services.

The Petrobras official used the bribe money to buy real estate and artwork, among other things, the SEC said.

In 2011, Tenaris entered into a Non-Prosecution Agreement with the Department of Justice and a Deferred Prosecution Agreement with the SEC stemming from alleged bribes paid in Uzbekistan. It was the first-ever SEC DPA.

In a company statement Thursday, Tenaris said the DOJ informed it that the agency had “closed its parallel inquiry into this matter” without taking action.

“As the SEC recognized in its Order, Tenaris has implemented a range of process improvements and remediation actions as part of its continuous focus on enhanced compliance,” the company said in the statement.

Tenaris first disclosed the investigation in November 2016, according to data from FCPA Tracker.

As part of Thursday’s settlement, Tenaris also agreed to report to the SEC every six months for the next two years about its ongoing remedial efforts.

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