Swiss Authorities ordered SBM to pay US$7M fine for failing to prevent bribes to Govt. officials in West African countries

Oct 26, 2022 News

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…over US$22M was used to bribe officials

Kaieteur News – In October 2021, the Switzerland Authorities ordered three subsidiaries of Dutch oil-services company SBM, to pay a US$7 million fine for failing to prevent bribery to Government officials in West African countries in order to secure lucrative contracts.

SBM Offshore is a company that has already established its presence in Guyana. In fact, SBM is the company designing the floating, production, storage and offloading (FPSO) vessels for American oil giant ExxonMobil’s projects in Guyana. The Switzerland Office of the Attorney General of Switzerland (OAG) had found that SBM, from 2006 to the start of 2012, had paid more than US$22 million in bribes to public officials in countries like Angola, Equatorial Guinea and Nigeria.

Notably, the SBM subsidiaries paid principally in Angola, Equatorial Guinea, and to a lesser extent in Nigeria. The monies were paid through intermediaries, under the cover of sham contracts. “These criminal practices were part of a system specifically set up to pay substantial bribes to foreign public officials with the aim of securing contracts for the SBM Offshore group,” the OAG statement said.

The U.S Department of Justice had reported that SBM paid at least US$180 million to state-owned companies in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. Brazil’s Ministério Público Federal, the Netherlands Public Prosecution Service and Switzerland’s Office of the Attorney General and Federal Office of Justice, all provided evidence during a U.S investigation into SBM’s bribery scandal.

Notably, the money the Swiss Government ordered SBM to pay for failing to prevent bribery was for the bribes paid in Nigeria. According to the Swiss OAG, it was impossible to levy similar claims on the Angola and Equatorial Guinea charges, as the company had already paid compensation for these in Dutch and US proceedings. In fact, it was for similar reasons the Swiss Authorities did not pursue SBM over bribes paid in Brazil.

Kaieteur News on Monday highlighted that in September 2018, the former Chief Executive Officer (CEO) and a former Sales and Marketing Executive of Dutch oil services company, SBM were both jailed for bribing foreign public officials in exchange for lucrative oil services contracts. In the US, former SBM Executives were jailed for their involvement in bribing Government officials in countries like Brazil, Angola and Equatorial Guinea.

According to the U.S. Department of Justice, former CEO of SBM Offshore, Anthony “Tony” Mace, then 66, of the United Kingdom, and a former Board Member of SBM’s U.S. based subsidiary, were sentenced to serve 36 months in prison and fined US$150,000. In addition, former Sales and Marketing Executive at SBM, USA, Robert Zubiate, then 66, of Agoura Hills, California, was sentenced to serve 30 months in prison and fined US$50,000.

In November 2017, Mace and Zubiate each pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to bribe foreign Government officials in Brazil, Angola and Equatorial Guinea. According to admissions made in connection with his plea agreement, Mace acknowledged that prior to him becoming CEO, other employees of SBM entered into an agreement to pay bribes to foreign officials, including at Brazil’s state-controlled oil company, Petróleo Brasileiro S.A. (Petrobras), Angola’s state-owned oil company, Sociedade Nacional de Combustíveis de Angola, E.P. (Sonangol), and Equatorial Guinea’s state-owned oil company, Petroléos de Guinea Ecuatorial (GEPetrol).

The former CEO admitted too that he joined the conspiracy by authorizing payments in furtherance of the bribery scheme and deliberately avoided learning that those payments were bribes. In particular, Mace maintained a spreadsheet reflecting payments to five individuals.  He acknowledged that even though he was aware there was a high risk those individuals were Equatorial Guinean officials, he nevertheless authorized SBM to make payments of over US$16 million to those individuals.

As it relates to the Brazilian Government Officials, Mace stated that he further continued a practice that was instituted before he became CEO, by splitting payments to SBM’s Brazilian intermediary by paying a portion of the intermediary’s commission to an account in Brazil and another portion of the agent’s commission to accounts in Switzerland, held in the name of shell companies.

Again, Mace deliberately avoided learning that the ultimate recipients of the payments that he authorized to the shell companies were Petrobras officials, he admitted. According to admissions made in connection with Zubiate’s plea, from between 1996 and 2012, Zubiate and others, used a third party Sales Agent to pay bribes to foreign officials at Petrobras, in exchange for those officials’ assisting SBM and SBM USA with winning lucrative offshore oil projects from Petrobras.  Zubiate also admitted engaging in a kickback scheme with the bribe paying Sales Agent for SBM and its SBM USA office.

On the local front, SBM Offshore has been the preferred shipbuilder for Guyana’s FPSO vessels since 2015. To date, the company has built the FPSOs for the Liza Destiny, the Liza Unity, and Payara – each costing approximately US$1B, US$1.2B, and US$1.6B respectively. Kaieteur News recently reported that SBM Offshore is making moves to further deepen its Guyanese roots, as it recently issued a Request for Information (RFI) from qualified companies, to develop a gated community and recreational facility for its employees.

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