Braskem in $957m penalty over illicit bribes to Brazilian government officials

Braskem manufactures green PE packaging for the F&B industry. Pic: Braskem.

Brazilian-based petrochemical manufacturer Braskem has agreed to pay $957m to settle charges it created false books and records to conceal millions of dollars in illicit bribes to Brazilian government officials to win or retain business.

The US SEC (Securities and Exchange Commission) complaint alleged Braskem made approximately $325m in profits through bribes paid through intermediaries and off-book accounts managed by a private company that was Braskem’s largest shareholder. 

Global settlement

Bribes were also paid to a government official at Brazil’s state-controlled petroleum company, as well as Brazilian legislators and political party officials.

In a global settlement with the SEC, the Department of Justice, and authorities in Brazil and Switzerland, Braskem agreed to pay $325m in disgorgement, including $65m to the SEC and $260m to Brazilian authorities. 

It also agreed to pay more than $632m in criminal penalties and fines, and must retain an independent corporate monitor for at least three years. 

Federal Bureau of Investigation

As alleged in our complaint, Braskem lacked the internal controls to prevent its use of third parties, off-book accounts and other intermediaries to bribe government officials in Brazil during an eight-year period,” said Stephanie Avakian, deputy director, the SEC Enforcement Division. 

Braskem’s misconduct was exposed through the investigative work of authorities in three countries.” 

The SEC’s investigation is continuing. It is being conducted by Ernesto Palacios and Thierry Olivier Desmet of the FCPA Unit, with assistance from David S. Johnson and Fernando Torres, and supervised by Kara Brockmeyer, chief of the FCPA Unit. 

The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud Section, the Federal Bureau of Investigation, the Brazilian Federal Prosecution Service, the Brazilian Federal Police, and the Office of the Attorney General in Switzerland.

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