Total to pay nearly $400m in alleged Iran bribery case

Author: Joe Kamalick


Total to pay nearly $400m in alleged Iran bribery case(Updates with Total comment)

WASHINGTON (ICIS)--French energy giant Total has agreed to pay nearly $400m (€312m) to resolve allegations that it violated US anti-corruption law by paying some $60m in bribes to Iranian officials between 1995 and 2004, the Department of Justice (DOJ) said on Wednesday.

The department also said that French authorities are seeking criminal prosecution of Total chairman and CEO Christophe de Margerie and two other individuals for alleged violation of France’s anti-bribery law and other statutes.

Under the agreement between Total and the DOJ, the US will defer prosecution of the oil and gas company for three years and then conclude the case - providing that Total further cooperates with the department and meets certain compliance requirements.

“These settlements, the outcome of which are customary in the United States, allow us to put an end to this investigation,” said Total CFO Patrick de la Chevardiere. “We look forward to continuing our work and in demonstrating our strong commitment to ensuring ethical and legal compliance with the laws around the world.”

In a criminal information document filed with a US District Court in Virginia, the department charged Total with one count of conspiracy to violate the anti-bribery provisions of the US Foreign Corrupt Practices Act (FCPA), one count of violating the internal controls provisions of the FCPA and an additional allegation that Total violated record-keeping provisions of the law.

On those three charges, Total has agreed to pay a penalty of $245.2m, and the firm agreed to hire an independent corporate compliance monitor for three years as part of an internal programme of controls to prevent and detect FCPA violations.

In addition to that penalty, Total agreed to pay $153m in “disgorgement and prejudgement interest” to the US Securities and Exchange Commission (SEC) and to comply with certain SEC-mandated compliance requirements.

Total comes under the jurisdiction of the SEC and the Justice Department because it trades on the New York Stock Exchange (NYSE).

According to the Justice Department, the bribery charges arise from Total’s effort in 1995 to re-enter the Iranian oil and gas market through a contract with the National Iranian Oil Company (NIOC) to develop Iran’s Sirri A and E oil and gas fields.

Total subsequently entered into a purported consulting agreement with the Iranian chairman of a state-owned engineering company, said the department, “in which Total would corruptly make payments to an intermediary designated by the Iranian official to secure NIOC signing a development agreement with Total for the Sirri A and E project, which NIOC did in July 1995”.

DOJ said that Total paid the Iranian official approximately $16m under the purported consulting agreement.

In addition, the criminal information charges that Total sought another NIOC development contract in 1997 for work in a portion of Iran’s South Pars gas field.

Under a second purported consulting contract, Total was said to have made unlawful payments of some $44m over the next seven years to secure a 40% interest in developing phases two and three of the South Pars field.

The department said that Total “mischaracterised the unlawful payments as ‘business development expenses’ when they were in fact bribes designed to corruptly influence a foreign official”.

($1 = €0.78)