Singapore Based Company and US Subsidiary pay bribery penalties
Keppel Offshore & Marine Ltd. (KOM), a Singapore-based shipyard operator and oil-rig builder, and its wholly-owned US subsidiary Keppel Offshore & Marine USA Inc. (KOM USA) have agreed to pay $422 million in penalties for violations against the US Foreign Corrupt Practices Act (FCPA). These penalties, which will be paid to authorities in the US, Singapore, and Brazil are the result of more than a decade of bribery payments made by KOM and KOM USA to Brazilian officials.
The bribe payments allowed KOM and KOM USA to amass profits of roughly $350 million from illicitly secured contracts in Brazil. According to the Department of Justice, from 2001 to 2014 the companies paid out more than $50 million in bribes to Brazilian officials. In order to obscure the payments, they were issued as commissions for consulting services and were passed through various shell companies and banks before reaching their intended recipients.
In addition to the imposed financial penalties, KOM will likely suffer reputational damage in Singapore. In general, Singapore is known for its intolerance toward corrupt business practices and has been routinely ranked by Transparency International as among the top 10 countries in the world with the lowest perceptions of corruption. KOM has already taken steps to repair the integrity of its corporate culture by terminating and/or sanctioning 17 employees involved in the misconduct, and implementing a stricter compliance system. Singaporean agencies continue to investigate the involved individuals.
An active and comprehensive compliance program is more important in business today than ever before. Agencies and authorities worldwide are enforcing stricter standards and are holding companies accountable for the actions of their employees. An effective compliance program is integral to promoting proper corporate conduct, as well as protecting one’s public perception and business relationships. Smith Brandon International has a wealth of experience in assisting companies establish their own compliance programs and can help you protect your business.
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