Brazilian aerospace company Embraer SA on Monday settled with US authorities for $205 million over bribery allegations in the Dominican Republic, Saudi Arabia, and Mozambique.
The company took in nearly $84 million in profits on aircraft sales after paying bribes, the US Justice Department and Securities and Exchange Commission announced jointly.
“Embraer paid millions of dollars in bribes to win government aircraft contracts in three different continents,” Assistant Attorney General Leslie Caldwell, head of the Justice Department’s criminal division, said in a statement.
The company will pay a $107 million fine to the Justice Department as well as give up $98 million in ill-gotten gains, or disgorgement, to the SEC. Embraer also agreed to retain an independent consultant to monitor its legal compliance for a period of three years.
However the SEC will offer Embraer up to $20 million in credit depending on the amount of disgorgement it pays to Brazilian authorities in a parallel legal proceeding, according to the SEC.
Brazilian authorities have also charged 11 people for their alleged involvement in bribes paid in the Dominican Republic. Saudi authorities have brought charges against two individuals, according to the Justice Department.
Under the US Foreign Corrupt Practices Act, it is illegal for companies and people to pay bribes to foreign officials to win business.Embraer fell under US jurisdiction because its shares are traded on the New York Stock Exchange.
The Justice Department said Embraer had admitted to a conspiracy to violate the FCPA and had wilfully failed to create internal accounting controls which could have prevented the corruption.
The alleged bribery included payments of $3.5 million to “an influential government official” in the Dominican Republic for a contract on the $92 million sale of eight aircraft to the local air force; $1.7 million to an official at a Saudi state enterprise for a $93 million sale of three aircraft; and $800,000 to a senior representative of a Mozambican state airline to win a $65 million sale.
The company also allegedly made $5.8 million in payments via a shell company in connection with a contract to sell three aircraft on to the Indian air force.
In a statement, Embraer said it had conducted an exhaustive internal investigation and was improving its internal controls for adhering to the law.
“The company acknowledges responsibility for the conduct of its employees and agents according to the facts ascertained in the investigation. Embraer deeply regrets this conduct,” the company said in a statement.
