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Honeywell International agreed to pay $202.7 million to settle allegations that it paid bribes to gain government contracts in Brazil and Algeria.
According to the Department of Justice (DOJ) and the Securities and Exchange Commission, Honeywell UOP, a subsidiary of Honeywell International based in the United States, paid $4 million in bribes to an official at Brazil's state-owned oil firm Petrobras between 2010 and 2014. (SEC). Meanwhile, the SEC claimed that Honeywell Belgium representatives paid $75,000 in 2011 to win a deal with Algerian state-owned oil giant Sonatrach.
The SEC ordered Honeywell, a conglomerate with divisions in aerospace, energy, healthcare, life sciences, retail, and utilities, to pay $81 million for violating federal securities law's anti-bribery, books and records, and internal accounting controls provisions, according to a press release issued Monday. The corporation must pay a criminal penalty of about $79 million to the DOJ for breaching the Foreign Corrupt Practices Act's anti-bribery provisions (FCPA).
In addition, as part of a coordinated settlement, Honeywell struck deals with Brazilian authorities. The corporation claimed in a press release the fines, disgorgement, and prejudgment interest it will pay total $202.7 million.
UOP engaged a sales representative in Brazil to oversee the bidding process for a contract to design and build an oil refinery for Petrobras, according to the SEC's decision. The salesperson would be paid a percentage of the winning bid. He did not tell Honeywell that his job would require him to interact with a government official, despite the fact that UOP's Petrobras account manager was aware of this fact.
According to the SEC, UOP's first bid of $425 million was rejected by another Petrobras employee who was not involved in the bribery scheme. UOP submitted a revised bid of $348 million, which was accepted, based on advice from the Petrobras director taking bribes. The bid was cancelled prior to completion, resulting in a $61.5 million profit, which will be disgorged to the SEC as part of the settlement.
The Algerian bribery plot featured a "pass-through payment" from Honeywell Belgium to a Sonatrach employee, coordinated by an agent stationed in Monaco. Honeywell paid the Monaco agent $300,000, and he set up a shell company and used $75,000 of that cash to pay a bribe to an official who was "the cause of Honeywell's troubles with Sonatrach" during a renegotiation of a contract to execute technical modifications to an oil refinery, according to the SEC.
As part of the agreement, Honeywell will disgorge $3.1 million in profits gained in that sale to the SEC.
In the U.S. District Court for the Southern District of Texas, Honeywell agreed into a three-year deferred prosecution agreement (DPA) with the DOJ. The term "electronic commerce" refers to the sale of electronic goods. In addition, Honeywell entered into a one-year DPA with Brazilian authorities. Neither DPA contains a compliance monitor, the company said.
By cooperating with the DOJ's investigation, turning over the results of its internal investigation, producing relevant documents, allowing employees to be interviewed by the DOJ, and "proactively disclosing certain evidence of which the department was previously unaware," Honeywell received a 25% reduction in its fine. According to the DOJ, Honeywell also terminated and reprimanded workers participating in the bribery schemes and enhanced its compliance procedures.
“In the many years since the events occurred, the company has meaningfully redesigned and continued to evolve its global ethics and compliance program to meet the evolving risk environment,” Honeywell said in its statement. The company has engaged in “extensive remedial measures” that included strengthening its anti-corruption program, investing in compliance resources, and “continuing to enhance its compliance program and internal controls.”
Honeywell first revealed the probes into alleged FCPA violations in 2019.
By fLEXI tEAM
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