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Trafigura pleaded guilty to bribery charges brought by US prosecutors in Brazil, agreeing to pay $127 million in fines and forfeit profits, the latest in a series of corruption cases against the world's largest commodities trading companies.
Under the plea agreement, Trafigura will pay $80.5 million in fines and forfeit $46.5 million in profits after paying nearly $19.7 million in “corrupt kickbacks” to Brazilian officials in an attempt to obtain “improper advantages” in oil contracts between 2003 and 2014. . .
The company pleaded guilty to one count of conspiracy to violate the US Foreign Corrupt Practices Act, according to court documents.
Prosecutors said Trafigura provided bribes to retain its business with state-controlled oil company Petrobras, netting the Trafigura entities about $61 million in profits over a decade-long period from ill-obtained business with the Brazilian group.
Under the scheme, Trafigura and its co-conspirators agreed to make illicit payments of up to 20 cents per barrel of petroleum products purchased or sold to Petrobras, and to hide the bribes through shell companies, prosecutors said.
Nicole Argentieri, head of the US Justice Department's criminal division, said Trafigura had “bribed Brazilian officials to illegally obtain business” for more than a decade. She added in a statement: “Today’s guilty plea confirms that when companies pay bribes and undermine the rule of law, they will face significant penalties.”
“These historical events do not reflect Trafigura’s values nor the behavior we expect from every employee,” Jeremy Weir, Trafigura’s chief executive and chief executive officer, said in a statement, adding that he was “pleased that the Department of Justice has recognized the steps we have taken to invest in Trafigura.” Our compliance function.”
Petrobras did not immediately respond to a request for comment.
Trafigura in December revealed for the first time that it had set aside a $127 million provision in its 2023 accounts to resolve the Justice Department's investigation into past “improper payments” in Brazil.
The payments relate to Brazil's largest political corruption case known as Lava Jato, or Car Wash, a massive contracts-for-kickbacks scheme with Petrobras at its centre. Company executives were paid bribes in exchange for handing over contracts in a conspiracy that included a construction cartel. Its disclosure led to the imprisonment of dozens of politicians and businessmen.
Some of the payments were made in cash at Trafigura's office in Rio de Janeiro, according to court documents. To generate that money for the bribes — coded as “kickbacks” by those involved — a Trafigura executive used “illicit market money exchanges” in Brazil known as “doleros,” as well as conducting wire transfers.
In order to facilitate the delivery of the bribes, the conspirators sent an invoice from a Hong Kong company for purported consulting services related to the purchase of floor and wall tiles from Brazil for $390,240. Trafigura paid this amount to a co-conspirator, who then paid the funds to an account in Hong Kong for the eventual benefit of Petrobras officials.
The Justice Department gave Trafigura credit for its cooperation and remedial actions, but not for the voluntary disclosure.
Trafigura's plea marks the first time it has admitted wrongdoing in the Car Wash scandal, after rivals Glencore and Vitol admitted offering bribes in the country to settle wider corruption investigations into them.
In 2018, Brazilian prosecutors indicted two former Trafigura executives Mariano Marcondes Ferraz and Márcio Pinto de Magalhaes for allegedly paying bribes amounting to about $1.5 million.
The civil case against Trafigura in Brazil over the car wash scandal has been suspended, but part of the $127 million allocated could also be used for settlements with Brazilian authorities.
The case brings an end to the Justice Department's current public prosecution of Trafigura, although the group and its former COO Mike Wainwright still face charges in Switzerland over suspected bribery payments in Angola.
Other commodity trading houses have also been sanctioned by the Ministry of Justice for bribery and corruption in recent years. In 2022, Glencore pleaded guilty to multiple counts of bribery in Africa and Latin America to obtain oil and received fines of more than $1 billion.
Rival oil trader, Gunvor, also pleaded guilty earlier this month to bribery in Ecuador to secure oil contracts, resulting in more than $660 million in fines and forfeiture of profits. Oil trading company Vitol agreed to pay more than $160 million to authorities in the United States and Brazil in 2020 for bribery in Brazil, Ecuador and Mexico.
Additional reporting by Michael Buller
