Innospec Limited appeared at Southwark Crown Court today and pleaded guilty to bribing employees of Pertamina (an Indonesian state owned refinery) and other Government Officials in Indonesia in order to secure sales of a fuel additive, TEL. Lord Justice Thomas has reserved his sentencing remarks. However in open Court he stated that there would be financial penalty of $12.7 million imposed on Innospec.
This case is part of the first “global settlement” reached with a co-operating Company and has been resolved in cooperation with US government authorities – DOJ, SEC and OFAC. The company, Innospec Limited, is a subsidiary of Innospec Inc., a NASDAQ listed company based in the U.S., and is a manufacturer of a lead based anti knock fuel additive called tetraethyl lead (“TEL”). Innospec Limited is based in Ellesmere Port, Cheshire and is believed to be the last manufacturer of TEL. TEL cannot be sold in Europe or the USA for motor vehicles on health and environmental grounds, however the company continued the production and sale of TEL in regions where it remained lawful, such as Indonesia.
The company indicated it would plead guilty to this offence at the first opportunity.
- First for both the SFO and DOJ – In a first for both the SFO and DOJ, these prosecuting authorities have agreed to the appointment of a joint monitor, to be acceptable in both the UK and US. The company has also agreed to pay the costs of a monitor for up to three years.
- Related Proceedings – This plea was reached as a result of the SFO, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Securities and Investments Commission (“SEC”) and the DOJ (together the “government authorities”) resolving this case by co-operating together to investigate and prosecute the company’s conduct in both Indonesia and Iraq. The SFO acknowledges and expresses its appreciation for the extensive coordination with the DOJ; SEC & OFAC to allow companies to voluntarily disclose previous corrupt practices and dispose of this conduct in its totality.
- Breach of UN sanctions – The company was prosecuted by the DOJ for offences in relation to the breach of United Nations sanctions from 2000 to 2003, as they applied to contracts in the UN Oil For Food programme. As part of the U.S. plea agreement for this conduct, the company agreed to pay a $14.1 million criminal fine.
- Regulatory Action – As a consequence of Innospec Inc’s listing on the NASDAQ, the parent company is regulated by the SEC. Innospec Inc has settled a civil complaint filed by the SEC, charging the parent company with violating the Foreign Corrupt Practices Act’s anti-bribery and books and records provisions relating to conduct in Iraq. A fine of $11.2 million in profits will be paid to the SEC.
- Finally – the company has agreed to pay an administrative fine of $2.2 million to OFAC, relating to matters regarding the US embargo against Cuba.
http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/03192010.pdf
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