Albemarle Corporation agreed Friday to pay the DOJ and SEC $218 million in penalties and disgorgement to resolve FCPA offenses related to bribing government officials at state-owned oil refineries around the world.
The Charlotte, North Carolina-headquartered chemical manufacturer entered into a three-year non-prosecution agreement with the Department of Justice, paying a $98.2 million criminal penalty and an administrative forfeiture of approximately $98.5 million.
The DOJ said it agreed to credit around $81.9 million of the forfeiture against disgorgement Albemarle has agreed to pay to the SEC.
In an internal administrative order, the SEC charged Albemarle with violating the FCPA’s anti-bribery, recordkeeping, and internal accounting controls provisions.
As part of the SEC settlement, Albemarle agreed to pay around $103.6 million in disgorgement and prejudgment interest. The SEC didn’t impose a separate penalty.
According to the DOJ, between 2009 and 2017, Albemarle, through its third-party sales agents and subsidiary employees, conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India. The company profited around $98.5 million from the scheme.
In Indonesia, the company used a third-party intermediary to obtain catalyst business with Indonesia’s state-owned oil company, even after that third-party intermediary had informed Albemarle that it was necessary to pay bribes to Indonesian officials, the DOJ said.
According to the SEC, Albemarle failed to devise and maintain a sufficient system of internal accounting controls to provide reasonable assurances that payments made to agents in Vietnam, Indonesia, India, China, and the United Arab Emirates were for legitimate services.
In India, an Albemarle subsidiary regional director warned a U.S.-based Albemarle sales executive that he thought the company’s India agent would pay bribes to keep the company off a “holiday list” that would prevent it from bidding on certain contracts. The regional director warned the sales executive by email and expressed his concern that the India agent would cause Albemarle to violate the FCPA, the SEC said.
According to the SEC, in August 2009, the U.S.-based sales executive signed a backdated consulting agreement between Albemarle Netherlands and the India agent. The agreement called for a three percent commission payment to the India agent, a rate three times higher than that paid to Albemarle’s existing agent for India. Shortly after Albemarle retained the India agent, the threat to place Albemarle on the “holiday list” was withdrawn.
“Companies are expected to adhere to the same ethical and legal standards whether they are doing business on U.S. soil or overseas. Albemarle’s eventual voluntary disclosure of fraud and subsequent efforts to remedy its business practices abroad are a step in the right direction for the company,” U.S. Attorney Dena J. King for the Western District of North Carolina said in Friday’s release.
As part of the NPA, Albemarle agreed to continue cooperating with the DOJ in any related ongoing or future criminal investigations, and agreed to continue to enhance its compliance program and provide reports to the DOJ regarding remediation and the implementation of compliance measures during the three-year term of the NPA.
According to FCPA Tracker, Albemarle first disclosed the investigation in an SEC filing in February 2018.