Embraer FCPA case study: part two

The recent Embraer FCPA resolution was truly global, both in the scope of the bribery and corruption as well as the investigation efforts themselves. In a statement, director of the SEC enforcement division Andrew J Ceresney said: “As alleged in our complaint, Embraer realised significant revenues by surreptitiously using third parties to mask bribes paid to government officials with influence over contracts it was competing to win.”

Most interestingly, chief of the SEC enforcement division’s FCPA unit Kara N Brockmeyer highlighted the truly international investigation and enforcement effort needed to bring the company to justice. She stated: “Embraer’s alleged misconduct spanned multiple continents, and it has taken significant ongoing coordination among international regulators and law enforcement agencies to uncover the company’s complex bribery schemes.”

The SEC statement also specifically noted the assistance of the following agencies and departments: the Brazilian Federal Prosecution Service, the Brazilian Federal Police, Brazil’s Comissão de Valores Mobiliários, the South African Financial Services Board, the Swiss Financial Market Supervisory Authority (FINMA), the Banco Central del Uruguay, the Spanish Comisión Nacional del Mercado de Valores, and the French Autorité des Marchés Financiers. This of course is all in addition to the Federal Bureau of Investigation (FBI) and the Justice Department (DOJ).

In addition, and as referenced last week, Brazil and the Kingdom of Saudi Arabia also brought criminal charges against former Embraer executives and employees. According to The Wall Street Journal: “Saudi Aramco reportedly confirmed that one of its employees took a bribe for arranging a deal with aircraft maker Embraer SA.” The article went on to note: “Saudi Aramco said the bribery allegations arose from the purchase of three Embraer 170 regional jets in 2010. The company said an internal audit ‘led to identifying certain violations’ and the launch of a formal investigation.”

The same article noted that Embraer “cooperated with international agencies conducting ‘similar investigations’ into Embraer deals.” Finally, and pointing to the ongoing cost of bribery and other corrupt business practices, “the oil and gas giant said it has now ‘ceased doing business’ with Embraer and added that it will take ‘appropriate legal measures’ against the aircraft company.” Regarding the employee involved, the company reported that he is no longer with the organisation and was ‘subjected to the maximum disciplinary actions’.

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