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Technipfmc Deferred Prosecution Agreement

TechnipFMC Deferred Prosecution Agreement: What It Means and Why It Matters

In July 2019, the global oil and gas company TechnipFMC entered into a Deferred Prosecution Agreement (DPA) with the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) over allegations of bribery and corruption in several countries. The company agreed to pay a total of $301.3 million in penalties, disgorgement, and prejudgment interest, as well as implement stringent compliance measures.

This is a significant development in the ongoing crackdown on foreign bribery and corruption by the DOJ and the SEC, and a warning to companies that operate globally to ensure their compliance programs are robust and effective.

What is a Deferred Prosecution Agreement?

A Deferred Prosecution Agreement is an agreement between a company and the government that allows the company to avoid criminal prosecution if it meets certain conditions. These conditions typically include admitting to the wrongdoing, paying a penalty, cooperating with the government`s investigation, and implementing a rigorous compliance program.

DPAs are designed to encourage companies to self-report, cooperate, and remediate, while also allowing the government to hold them accountable for their misconduct.

What Were the Allegations Against TechnipFMC?

The allegations against TechnipFMC centered around the company`s use of third-party agents and consultants to bribe government officials in Brazil, Iraq, Kazakhstan, and Nigeria to secure contracts and gain advantages in the bidding process. The company also allegedly made false statements to the SEC and its investors about these payments.

According to the DOJ, TechnipFMC`s corrupt practices resulted in profits of approximately $69 million, which the company was required to disgorge as part of the DPA.

Why Does the TechnipFMC DPA Matter?

The TechnipFMC DPA is significant for several reasons. First, it demonstrates the continued focus of the DOJ and the SEC on foreign bribery and corruption, particularly in the oil and gas industry. Second, it underscores the importance of having a robust compliance program in place that can prevent and detect misconduct, as well as remediate it quickly if it occurs.

Third, it serves as a warning to other companies that operate globally that the consequences of failing to comply with laws and regulations can be severe, both in terms of financial penalties and reputational damage.

Finally, the TechnipFMC DPA also highlights the potential benefits of self-reporting, cooperating, and remediating in the face of allegations of wrongdoing. By entering into the DPA, the company was able to avoid criminal prosecution and limit the damage to its business and reputation.

In conclusion, the TechnipFMC Deferred Prosecution Agreement is a significant development in the ongoing effort to combat foreign bribery and corruption. It should serve as a reminder to companies that operate globally to prioritize compliance and take proactive steps to prevent and detect misconduct. Failure to do so can result in severe penalties, both financial and reputational, that can have significant long-term consequences for the business.