Nine years ago today, on November 4, 2010, was Panalpina Settlement Day which made history for the single largest number of companies to simultaneously settle Foreign Corrupt Practices Act (FCPA)-related violations. It was led by the global logistics firm Panalpina World Transport (Holding) Ltd., its US subsidiary, Panalpina, Inc., and five of its oil and gas services customers, including Royal Dutch Shell plc, Tidewater Marine International Inc., Pride International Inc., GlobalSantaFe Corporation and Noble Corporation all resolved charges with the Department of Justice (DOJ) and Securities and Exchange Commission (SEC), and another Panalpina customer settled with the SEC only. The total amount in fines and penalties paid was $156.5 million in criminal fines and about $80 million in civil disgorgement, interest and penalties for a total of $236.5 million. It was certainly a stunning day.

Panalpina Settlement Day showed the DOJ and SEC had now understood that if they found a corrupt third-party, who was engaging in bribery for one customer in an industry, that third-party might well be doing so for other customers in the same industry. For the logistics firm Panalpina, it was shipping goods and products into Nigeria for a number of US based oilfield service companies. The same became true for corrupt third-party agents in other industries such as telecom and tech.

However, all of these may well pale beside the corruption engaged in by Unaoil, the Monaco based group of affiliated companies who once employed over 1400 persons to help facilitate bribery schemes around the globe. The facts finally came to light last week when it was announced that the former Unaoil Chief Executive Officer (CEO), Cyrus Ahsani, and former Chief Operations Officer (COO), Saman Ahsani, pled guilty in March to arranging millions in bribes to officials in at least ten countries, additionally a former Unaoil Business Development Director pled guilty in August last year. All of this was announced in a DOJ Press Release. It is one of the most significant DOJ Press Releases regarding FCPA enforcement and may well portend a rush of enforcement actions, including additional guilty pleas from a very large number of persons and entities.

The breadth and scope of the international bribery and corruption perpetrated by Unaoil was stunning as it was audacious. Unaoil was literally the ‘go-to’ fixer to engage in bribery and corruption for a wide variety of energy companies. The countries where Unaoil engaged in bribery and corruption included “bribe payments to government officials in Algeria, Angola, Azerbaijan, the Democratic Republic of Congo, Iran, Iraq, Kazakhstan, Libya and Syria.”

But even more than the number of countries involved was the customer list of Unaoil. In the Information it listed 27(yes you read that right Twenty-seven) different entities that Unaoil paid bribes on behalf of in the above listed countries. By simply going through Unaoil’s customer list, the DOJ and SEC could make the Panalpina Settlement Day pale by comparison. This listed of 27 companies included two which have previously admitted violating the FCPA. They were Rolls Royce and SBM Offshore. While not named in the Information, another Unaoil client, TechnipFMC also pled guilty to FCPA violations this summer.

Yet beyond these three named entities there are 25 other companies, listed as Companies 1 through 25 which are identified in the Information. They are all identified by the location of their corporate headquarters, their industry and whether they are publicly traded or privately held. What’s more is that Unaoil engaged in bribery and corruption right up to 2016.

Further, the Press Release stated, “Additionally, court documents reflect Cyrus and Saman Ahsani laundered the proceeds of their bribery scheme in order to promote and conceal the schemes and to cause the destruction of evidence in order to obstruct investigations in the United States and elsewhere. Hunter participated in the conspiracy to violate the FCPA by, among other things, facilitating bribe payments to Libyan officials between about 2009 and 2015.”

With a scope of corruption this broad, it is not too surprising to see the international groups involved in the Unaoil investigation, which included “The governments of Australia, Canada, France, Guernsey, Italy, Monaco, the Netherlands, Portugal, Switzerland and UK provided significant assistance in this matter as did the U.S. Securities and Exchange Commission and Eurojust.” In the US, in addition to the DOJ, the FBI, IRS and US Postal Service were involved.

When it comes to fines and penalties it will be interesting to see if the One Pie, anti-piling on concept still applies. There has been significant cooperation by the various international and domestic enforcement agencies in this area and I would anticipate it would continue.

All of this means there are some major FCPA enforcement actions hanging out there. The Panalpina Settlement Day was a stunner back in 2010. The DOJ’s announcement of the guilty pleas of the Ahsani’s back in March but not unsealing it until last week, would clearly indicate they are cooperating with the DOJ. Further, they are not scheduled to be sentenced until March 2020 which indicates that more cooperation may well still be in the offing for them.

Like the Jho Low forfeiture agreement, announced last week, the announcement of these guilty pleas is huge. With Jho Low it was the largest forfeiture agreement ever. With Unaoil, it was the announcement of not simply one of the globe’s largest bribery scams but also the largest number of known entities that hired a third-party to engage in bribery and corruption on their behalf.

Over the next few blog posts, I will be exploring the Ahsanis’ Criminal Information to see what the bribery schemes were and how they were carried out.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2019

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