Gunvor Pays More Than $700M in U.S. and Switzerland Settling Bribery Cases

Singapore freight forwarders – Star Concord
04-Mar-2024

Swiss-based international commodities trading company Gunvor, which says it focuses on logistics solutions that safely and efficiently move commodities, has settled a long-running and complex bribery case with U.S. and Swiss regulators. The company will pay more than $661 million in the United States as part of a guilty plea and $98 million to Swiss authorities while it works to resolve additional investigations in Ecuador and Switzerland.

The company emphasized in announcing its plea agreement with the U.S. Justice Department and guilty plea which was entered in federal court in New York on March 1, that it had cooperated with the investigations and taken extensive steps to enhance its internal controls. The U.S. charged the company with violations of the Foreign Corrupt Practices Act saying there had been a wide-reaching conspiracy to violate the anti-bribery provisions.

“Over nearly a decade, Gunvor representatives bribed high-level government officials at Ecuador’s state-owned oil company to enter into business transactions with other state-owned entities that ultimately benefited Gunvor. As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits,” said Acting Senior Counselor Brent S. Wible of the U.S. Justice Department’s Criminal Division.

The company agreed to pay a fine of nearly $375 million and to forfeit an additional $287 million to the U.S. Under the terms of the agreement, up to half the fine will be credited against the resolution of parallel matters yet to be completed in Ecuador and Switzerland. In addition, the company also agreed with Switzerland to pay an additional approximately $98 million to resolve yet another investigation into Gunvor’s previous misconduct.

“As a company, Gunvor made mistakes at the time, for which we are sorry and that we have worked diligently to fix,” said Gunvor Group Chairman, Torbjörn Törnqvist. “Today, Gunvor upholds an industry-leading compliance program that we are committed to continuously enhance. Corruption has no place in our company and will never be tolerated.”

Gunvor highlighted that the investigations centered around activities that it believes began in 2011, acknowledging its compliance program had shortcomings that “allowed for corrupt activities.” The company contends that its compliance practices were improved over time and that in 2020 it helped them to identify concerns and suspend and later terminate its agents in Ecuador before it learned of the U.S. investigation. It also identified misconduct in Congo-Brazzaville that was resolved with the Swiss authorities in 2019.

In the U.S. court filing the company admits between 2012 and 2020 more than $97 million was paid to intermediaries knowing that some of the money would be used to bribe Ecuadorean officials. The monies were routed through U.S. banks to front companies in Panama and the British Virgin Islands and front companies for Gunvor won oil-backed loan contracts with Petroecuador without competitive bids. The company also received confidential information from Petroecuador. 

The U.S. Department of Justice acknowledges that the fines were reduced in part because of the company’s cooperation and its remedial measures. The department also considered the 2019 settlement with Switzerland which was for a parallel corrupt scheme to bribe officials in Congo-Brazzaville and Cote d’Ivoire to secure oil contracts. That scheme was believed to run between 2009 and 2012. 

The U.S. also previously secured convictions of four individuals, including two consultants and one employee each of Gunvor and Petroecuador. Between 2020 and 2022, the U.S. obtained guilty pleas from the individuals on charges related to money laundering. The Cayman Islands, Colombia, Panama, Portugal, and Singapore also aided in the prosecution of the cases.
 

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