Rolls Royce will pay $810 million and get a deferred prosecution agreements from the UK Serious Fraud Office and the U.S. Justice Department to settle allegations into bribery and corruption.
In the UK, an indictment, which has been suspended for the term of the agreement, covers twelve counts of conspiracy to corrupt, false accounting and failure to prevent bribery.
The conduct spans three decades and involves Rolls-Royce’s Civil Aerospace and Defence Aerospace businesses and its former energy business and relates to the sale of airplane engines, energy systems and related services.
The conduct took place across seven jurisdictions – Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.
In the United States, Rolls Royce was represented by Bruce Yannett of Debevoise in New York.
In Thailand, Rolls-Royce admitted to using intermediaries to pay approximately $11 million in bribes to officials at Thai state-owned and state-controlled oil and gas companies that awarded approximately seven contracts to Rolls-Royce during the same time period.
In Brazil, Rolls-Royce used intermediaries to pay approximately $9.3 million in bribes to bribe foreign officials at a state-owned petroleum corporation that awarded multiple contracts to Rolls-Royce during the same time period.
In Kazakhstan, between approximately 2009 and 2012, Rolls-Royce paid commissions of approximately $5.4 million to multiple advisors, knowing that at least a portion of the commission payments would be used to bribe foreign officials with influence over a joint venture owned and controlled by the Kazakh and Chinese governments that was developing a gas pipeline between the countries.
In 2012, the company also hired a local Kazakh distributor, knowing it was beneficially owned by a high-ranking Kazakh government official with decision-making authority over Rolls-Royce’s ability to continue operating in the Kazakh market. During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.
In Azerbaijan, between approximately 2000 and 2009, Rolls-Royce used intermediaries to pay approximately $7.8 million in bribes to foreign officials at the state-owned and state-controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period.
In Angola, between approximately 2008 and 2012, Rolls-Royce used an intermediary to pay approximately $2.4 million in bribes to officials at a state-owned and state-controlled oil company, which awarded three contracts to Rolls-Royce during this time period.
In Iraq, from approximately 2006 to 2009, Rolls-Royce supplied turbines to a state-owned and state-controlled oil company. Certain Iraqi foreign officials expressed concerns about the turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq.
In response, Rolls-Royce’s intermediary paid bribes to Iraqi officials to persuade them to accept the turbines and not blacklist the company.
A judge ruled in a public hearing at the Royal Courts of Justice that the agreement’s terms were “fair, reasonable and proportionate” and that the agreement was in the interests of justice.
The resolution is the largest ever enforcement action against company in the UK for criminal conduct.
Rolls-Royce has also reached an agreement with the US Department of Justice and a leniency agreement with Brazil’s Ministério Público Federal.
In total, these agreements result in the payment by Rolls Royce of approximately $810 million – including $615 million to the UK, $170 million to the US and $25 million to Brazil.
“Bribery harms the reputation of the UK as a safe place to do business,” said SFO Director David Green. “I welcome this agreement, a significant enforcement action by the SFO, using relatively new statutory powers in respect of an important British company. It allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business.”
It was third use of a deferred prosecution agreement since the power became available to prosecutors in 2014.