Brazilian Oil Giant Pays US$853 Million Fine In Corruption Case

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Petrobras
Petrobras

Brazilian state-owned Petrobras oil company has paid $853.2 million in fines to the United States and Brazilian authorities, following a corruption investigation into its senior management as part of the non-prosecution agreement with the US Department of Justice (DOJ) and the Brazilian Federal Prosecutor’s Office, the company said on Monday.

The so-called Operation Car Wash, carried out in 2014 by the Brazilian authorities, revealed that certain Petrobras executives had been engaged in a money-laundering scheme. In 2018, the company signed a non-prosecution agreement with the DOJ and the Brazilian authorities, under which the company pledged to participate in a compliance program, internal control and anti-corruption procedure enhancements, as well as pay a $853.2 million fine to the US and Brazilian authorities.

“Pursuant to the coordinated agreements with DOJ and the US Securities and Exchange Commission (“SEC”), Petrobras paid US$ 853.2 million (10% as a criminal fine to DOJ, 10% as a civil fine to the SEC, and 80% for payments to the Brazilian authorities), committed to continue to improve its internal controls and compliance program, and agreed to cooperate with US agencies, including by submitting annual reports to DOJ,” Petrobras said in a statement.

The Brazilian company had “to enhance its integrity program and self-reporting to DOJ during the agreement’s three-year term” and has “fully complied with the agreement,” the press release said.

“Since 2018, Petrobras has continued to improve the effectiveness of its internal controls and consolidate structural and governance changes by strengthening its culture of ethics, integrity, and transparency,” the company said.

The anti-corruption investigation into the Petrobras money-laundering case began in 2014. The company’s senior management was accused of signing contracts and receiving a commission of 3% of the contract amount. These funds were later used to bribe politicians and officials. According to the Brazilian authorities, through overpricing and bribes, the participants in the money-laundering scheme gained up to $3.8 billion.

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