Snamprogetti Netherlands deferred prosecution agreement and ENI SEC settlement (2010)

The deferred prosecution agreement

DOJ said Snamprogetti Netherlands B.V. was a Dutch company based in Amsterdam and a wholly owned subsidiary of Snamprogetti S.p.A. of Milan ¹. DOJ filed a two-count information charging conspiracy and aiding and abetting FCPA violations ¹. The government's later motion gives the statutes as 18 U.S.C. 371 for count one and 15 U.S.C. 78dd-2 for count two ³.

The agreement was signed by Snamprogetti, by Saipem S.p.A. for its wholly owned subsidiary, and by ENI S.p.A. for its former wholly owned subsidiary ². The term was two years from the filing of the information, with a possible one-year extension after a knowing violation ². Saipem and ENI guaranteed payment of the penalty jointly and severally ².

DOJ said ENI and Saipem agreed to compliance standards for their programmes and to cooperate in ongoing investigations ¹. The DOJ release does not describe an independent monitor for Snamprogetti ¹.

What Snamprogetti admitted

Paragraph 2 of the agreement says "Snamprogetti admits, accepts, and acknowledges that it is responsible under U.S. law for the acts of its employees, subsidiaries, and agents as set forth in the Statement of Facts" ². It says "the facts described in Attachment A are true and accurate" ².

DOJ said Snamprogetti, KBR, Technip and an engineering company based in Yokohama, Japan, formed a joint venture that won four contracts from Nigeria LNG Ltd. from 1995 to 2004, valued at more than US$6 billion ¹. DOJ said the venture paid about US$132 million to a Gibraltar company controlled by Jeffrey Tesler and more than US$50 million to a Japanese trading company ¹. DOJ said, according to court documents, Snamprogetti intended some of those payments to fund bribes to Nigerian officials ¹.

The SEC case against Snamprogetti and ENI

The SEC charged Snamprogetti with anti-bribery, records and internal controls violations ⁵. It charged ENI with books and records and internal controls violations, saying ENI became a U.S. issuer in 1995 ⁵. The SEC alleged that ENI did not apply its internal controls on agents to its former subsidiary ⁵.

The SEC alleged that after a US$2.2 billion contract in December 1995, about US$60 million went to the UK agent's Swiss account over 52 months and passed to Nigerian officials ⁵. It alleged that after a change of government in 1999, a US$32.5 million bribe was negotiated in London and a US$1.2 billion contract was awarded days later ⁵.

Both companies consented to permanent injunctions without admitting or denying the SEC's allegations ⁵. They agreed to pay US$125 million in disgorgement jointly and severally ⁵.

Nigerian proceedings

As reported by Helen Wright of KHL Group on 22 December 2010, Snamprogetti Netherlands, a Saipem subsidiary, agreed to pay Nigeria US$30 million in criminal penalties and US$2.5 million in legal costs, US$32.5 million in total ⁶. The same report described the settlements as non-prosecution agreements with Nigeria's federal government ⁶. This page has not read a Nigerian government or Saipem document on that settlement.

Status and related cases

On 10 August 2012 DOJ moved before Judge Keith P. Ellison to dismiss the information with prejudice ³. The motion said Snamprogetti paid the penalty "within 10 days of the execution of the DPA on July 7, 2010" ³. It said Snamprogetti, Saipem and ENI "fully cooperated" and that the defendants did not oppose the motion ³. The DOJ case page lists an order granting the motion, filed on 17 September 2012 ⁴.

DOJ said total criminal and civil penalties in the Bonny Island investigations had reached US$1.28 billion by July 2010 ¹. See the records for Kellogg Brown & Root and Halliburton, Technip, JGC and Marubeni.