In its resolution with the Department of Justice, Honeywell UOP, a U.S.-based subsidiary of Honeywell International, entered a three-year deferred prosecution agreement related to charges of conspiracy to violate the Foreign Corrupt Practices Act. It will pay a $79 million criminal penalty, $40 million of which the DoJ said it will credit against amounts the company will pay to prosecutorial authorities in Brazil.
In its resolution with Brazilian authorities, Honeywell UOP entered into leniency agreements with the Federal Prosecution Service (MPF), the Comptroller General of Brazil (CGU), and the Attorney General of Brazil (AGU).
Honeywell will not be required to have a monitor. Instead, it will provide reports on its anti-corruption compliance program to the Brazilian authorities and DoJ for one and three years, respectively, according to Honeywell.
In a parallel resolution with the Securities and Exchange Commission, Honeywell UOP agreed to pay $81 million in disgorgement and prejudgment interest. The SEC’s order provides for an offset of up to $38.7 million of any payments made to Brazilian authorities. Therefore, the company’s minimum payment to the SEC would be $42.4 million, the SEC said.
Case Facts
According to Honeywell UOP’s admissions and court documents, between 2010 and 2014, the company offered at least $4 million in bribes to a high-ranking Petrobras executive in Brazil in exchange for an approximately $425 million contract from Petrobras to design and build the Premium oil refinery. The funding and payment of the bribe was made through a sales agent
“In exchange for the bribe, and after obtaining business advantages, including inside information and secret assistance, from the Petrobras executive, Honeywell UOP won the contract,” the DoJ said. “Honeywell UOP earned approximately $105.5 million in profits from the corruptly obtained business.”
DoJ Resolution
The DoJ said it reached its resolution with Honeywell UOP based on several factors, including, among others, the “nature and seriousness of the offense.” Among the measures Honeywell UOP received full cooperation credit for included, among other things:
- Proactively disclosing certain evidence of which the DoJwas previously unaware;
- Providing information obtained through its internal investigation, which allowed the department to preserve and obtain evidence as part of its own independent investigation;
- Making detailed presentations to the DoJ;
- Voluntarily facilitating interviews of employees; and
- Collecting and producing voluminous relevant documents and translations to the DoJ, including documents located outside the United States.
Furthermore, the DoJ said, the company “promptly engaged in extensive remedial measures including, among other things, terminating and disciplining certain employees involved in the misconduct and strengthening its compliance program.” Honeywell UOP also has agreed to continue to cooperate with the DoJ in any ongoing or future criminal investigations relating to this conduct.
In addition, Honeywell UOP and its parent company, Honeywell International, agreed to continue to enhance its compliance program and provide reports to the DoJ regarding the implementation of compliance measures for the term of the DPA.
SEC Case
Honeywell’s resolution with the SEC resolves allegations relating to the conduct in Brazil, as well as conduct relating to a foreign subsidiary’s contract with the intermediary, Unaoil, in Algeria, executed in 2011. According to SEC’s order, in 2011, employees and agents of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to obtain and retain business with the Algerian state-owned entity Sonatrach.
“For years, Honeywell neglected to implement sufficient internal accounting controls to mitigate against known corruption risks in countries like Brazil and Algeria,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “This failure created an environment in which Honeywell employees and agents could and did facilitate bribes.”
However, the SEC in its order acknowledged that Honeywell “strengthen[ed] its ethics and compliance organization.”
Honeywell Response
In responding to the settlement, Honeywell said, “In the many years since the events occurred, the company has meaningfully redesigned and continued to evolve its global ethics and compliance program to meet the evolving risk environment.”
“We are pleased to have this legacy matter behind us, as these events in no way reflect the current leadership, culture and values that Honeywell has come to establish over a decade since this activity occurred,” said Honeywell Chief Executive Officer Darius Adamczyk. “We stand behind our recognized world-class ethics and compliance program and all Honeywell employees are expected to abide by all laws in the countries in which we operate and conduct themselves with the highest levels of integrity at all times.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.