Swiss Justice Convicts Three Companies for Corruption in Africa

“Corruption was so common it was like brushing your teeth or drinking a glass of water.” For example, a former employee in court summarized the ‘simple’ business model of SBM Offshore, a company specializing in maritime equipment for the oil industry. In Angola, Nigeria or Equatorial Guinea, the Dutch company obtained contracts “by paying bribes” from its three Swiss subsidiaries.

As he announced in a press release, the Public Prosecutor’s Office of the Confederation (MPC) has just condemned these three entities in Marly, in the canton of Friborg, which are “the operational financial center” of the group. The three companies have admitted their guilt and the criminal conviction, which has come into effect, can no longer be challenged.

Sanctioned for lack of organization, these companies clearly did not take “all organizational measures” to prevent corruption from being perpetrated within them between 2006 and 2012. Swiss courts have found that payments totaling just over 23 million francs were made to Angolan, Nigerian and Equatorial Guinean officials.

Great not scary

For these mistakes, they will have to pay a total of 7 million francs, divided between a 2.8 million confiscation of illegal profits and a 4.2 million fine. This fine approaches the maximum amount set by the legislator at 5 million for a company. A level often criticized by the OECD, which does not find it very deterrent, especially in terms of the amounts such multinationals brew. SBM Offshore employs more than 4,500 people, including 50 in Marly, and achieved an operating margin of more than $1 billion last year.

This sanction actually seems quite low compared to the amounts that SBM Offshore pays to enter into agreements with authorities in Brazil, the United States and the Netherlands, amounting to a total of $839 million. Since it is not possible to seize “twice the value of the same corrupt payments”, the Swiss authorities had to settle for the remains by seizing “only” 2.8 million.

The MPC wants to see the positive and is pleased to have been able to condemn the company despite the existence of these agreements concluded abroad, which was not a matter of course for the federal prosecutor Grégoire Mégevand. He had to determine exactly the role that the Swiss subsidiaries played in this “systemic corruption” where the group engaged in and discarded most of the elements retained abroad.

The former boss also convicted

In addition, and this is what encouraged it to sue the three subsidiaries, the MPC had managed to convict in July 2020 the former leader of the group, a now retired Frenchman, who had admitted his guilt by participating in the payment of approximately $6.8 million to executives of Angola’s national oil company, Sonangol. In return, they accepted that companies operating in the country “choose” SBM Offshore to provide them with floating production units, enabling the extraction of crude oil at sea. Most notably, the illicit funds passed from Credit Suisse to UBS and Portuguese banks controlled by relatives of former Angolan president José Eduardo dos Santos, in power between 1979 and 2017.

Several former executives of the group have also been prosecuted or convicted abroad. In the UK, it was the former vice president who was sanctioned for contracts made in Iraq, involving illegal payments through Swiss accounts through a Monegasque brokerage firm, Unaoil, which the press called “the factory of corruption” after a data breach that happened. in 2016. This resounding affair had prompted Rolls-Royce to pay the sum of $809 million to avoid legal proceedings.

“Serious violations” and repentance

To the MPC, SBM Offshore’s shortcomings seem “all the more serious” as it was unable to ignore the risks posed by the oil industry, one of the most exposed to the risk of corruption. Knowing this, it has not hesitated to deploy its full arsenal of corrupt instruments, such as offshore companies, intermediaries, opaque accounts and agreements made with unscrupulous officials, in countries where corruption has been established as a rule. In doing so, the three Swiss subsidiaries, which shared the same premises and sometimes the same employees, tried to hide the “criminal practices”, the MPC still notes.

Today, the multinational, active in 11 countries, devotes a large part of its annual report to compliance and reports its “zero tolerance for corruption”. It tells on more than 40 pages what measures have been taken to prevent the recurrence of such scandals.

On its website, SBM Offshore responded to this condemnation and welcomed the conclusion of this “old affair”. The head of compliance and governance, Erik Lagendijk, indicates that the firm has taken substantial measures for several years to ensure that its activities are conducted with integrity and in accordance with the law. Requested by Weatherthe company adds that it has stopped using intermediaries to obtain contracts.

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