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A Jersey-based PLC's UK subsidiary is the first company to be prosecuted by the SFO for paying bribes

03/11/2022

Glencore Energy UK Limited [Glencore], a subsidiary of Jersey-based Glencore PLC, is the first company to be the subject of a criminal prosecution by the UK Serious Fraud Office for paying bribes and has pleaded guilty to five such offences.

GLENCORE ENERGY UK LTD's controlling entity is

Glencore's UK unit pleaded guilty to

  • Five counts of bribery concerning
    • $26.9mn in payments to officials in Cameroon, Nigeria and the Ivory Coast, and
  • Two counts of failing to prevent bribery concerning
    • There are just under $2mn of payments to Equatorial Guinea and South Sudan agents.

The UK fines were reduced by a third because

  • Glencore pleaded guilty to each offence.
  • The company will also have to pay £4.5mn of the SFO's legal costs.

Other jurisdiction

  • Also, Glencore has pleaded guilty to two separate US criminal cases and agreed to pay about $1.1bn in criminal fines and forfeiture.
  • Prosecutors in the US and UK agreed to focus on different periods of offending to avoid double jeopardy.
  • Glencore said it continues cooperating with separate Swiss and Dutch corruption investigations.
  • There is no news from the home state of Jersey

The story

A UK subsidiary of the mining and commodities group was handed a £182.9mn fine on Thursday, November 3 2022 at Southwark Crown Court along with a confiscation order of £93.5mn, which it must pay within 30 days.

Mr Justice Peter Fraser said

  • The company had committed "corporate corruption on a widespread scale, deploying very substantial amounts of money in bribes".
  • "Fraudulent activity was endemic" within the company's west Africa oil trading desk based in London.

The fine comes after Glencore Energy UK pleaded guilty in June to seven counts of bribery, spanning countries from Nigeria to Cameroon between 2011 and 2016 following a Serious Fraud Office probe into one of the world's biggest commodity traders.

Mr Justice Peter Fraser said

  • "Bribery is a highly corrosive offence, it quite literally corrupts people and companies and spreads like a disease,"
  • "Any bribes are serious but when those bribes are measured in the millions of US dollars or euros . . . then the figures speak for themselves."

Glencore this year also pleaded guilty to related charges in the US and set aside $1.5bn to pay fines in the US, Brazil and the UK. The company agreed to pay roughly $1.1bn to US authorities and $40mn to Brazilian prosecutors.

The SFO probe focused on Glencore's west Africa desk in its London office,

The probe revealed that the company had paid more than $28mn in bribes via employees and agents to secure preferential access to oil, including increased cargoes, valuable grades and preferable dates of delivery.

Its actions were approved across its oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan.

Two Glencore employees transported $800,000 in cash by private jet to South Sudan in August 2011, according to a case summary provided by the SFO, a month after the country gained independence.

The money was ostensibly for a new office but was, in fact, used to pay bribes for oil.

Mr Justice Peter Fraser said

  • Glencore had benefited from its criminal conduct to the tune of £93.5mn, which should be confiscated.

A middleman paid by Glencore also flew money across Africa on private jets to a Glencore oil trader, who used it to bribe officials in Cameroon, the SFO's barrister revealed on Wednesday.

That trader also withdrew money from a Swiss "cash desk" to dispense money to be used for bribery, withdrawing millions of euros listed as "office expenses".

Mr Justice Peter Fraser said

  • The "spurious" reasons given for withdrawals represented the "most blatant of conduct".
  • "The facts demonstrate not only sustained criminality but sophisticated devices to disguise it".
  • He said the fine must be "sufficiently large to have a financial impact . . . otherwise there is a risk that companies such as Glencore will see penalties for bribery as . . . merely a potential extra cost of doing business".

Source

https://www.comsuregroup.com/news/glencore-jerseys-uk-subsidiary-company-pleads-guilty-to-bribery-offences/

https://www.ft.com/content/8da90aca-ca1e-441a-8926-b252c5e93a15

JERSEY UNITED KINGDOM