An investigation of the UK Serious Fraud Office (SFO) into a subsidiary of one of the world’s largest commodity traders, the Operation Azoth, was launched as yearly as in June 2019 in close cooperation with Dutch and Swiss prosecuting authorities and with the support of the US law enforcement authorities that were conducting a parallel investigation*.
As per the information provided by the investigators, between 2011 and 2016, the company paid over $28 million to officials of State oil companies in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan in exchange of profitable contracts and other preferences, including the possibility to supply oil on the most favourable dates, to have access to the best grades etc. In particular, in Nigeria, Equatorial Guinea and Ivory Coast, Glencore created funds of “service fees” to pay bribes by covering fictitious services of local agents and intermediaries, while senior officials from the West African subsidiary had been bringing money in cash issued by the Swiss headquarters of Glencore under the guise of funds to cover the opening of branches to Cameroon and South Sudan for ages.
The investigation concluded with the company being charged with accusations under five items for having violated article 1 of the UK Bribery Act of 8 April 2010 (UKBA) on bribing another person and article 7 of the same on the failure to prevent bribery.
Glencore admitted to the charges back in late July and concluded a Guilty Plea, which was approved by the Southwark Crown Court on 3 November 2022. Under the Guilty Plea, the company is to pay £281 million, including a fine of £182,9 million, £93,5 million under confiscation order, and £4,5 million to cover the prosecution costs.
In spite of the fact that due to the guilty plea the fine was reduced by a third, the total amount of sanctions imposed on Glencore is a record one for judicial corporate law enforcement. Moreover, since the adoption of the UKBA it was for the first time that a company was charged directly with bribery besides the failure to prevent bribery by the persons associated with it.
However, the investigation conducted by the UK authorities did not conclude with it: the SFO stresses that it is carrying out proceedings against 11 former senior officials of Glencore.
*Earlier this year Glencore International AG, a parent company of Glencore UK Ltd., was held liable by the US Department of Justice (DOJ) for bribery of foreign officials in Brazil, Venezuela, the Democratic Republic of Congo, Cameroon, Ivory Coast, Nigeria and Equatorial Guinea and conspiracy with a view to manipulating commodity prices, and by the US Commodity Futures Trading Commission (CFTC) for bribery aimed at manipulating oil prices.
The CFTC proceedings concluding with the agreement of the company to compensate the illicitly acquired funds of $320 715 066 and to pay a civil penalty of $865 630 784; the total amount of penalties was reduced to $852 797 810 taking account of the payments made under the US DOJ proceedings. Having concluded a Plea Agreement with the DOJ concerning the accusations of foreign bribery, Glencore pledged to pay a criminal fine of $262 590 214 and compensate the illicitly acquired funds of $181 457 195. The amount of fine was reduced by $136 236 140, as the company was to pay a fine under the proceedings in the UK, and by $29 694 819, with the compensation reduced by $90 728 597 due to the sanctions imposed by the CFTC.
It is noteworthy that the agreement concluded by the DOJ with Glencore was the first to envisage the obligation of the head of compliance of the corporate perpetrator to prove the quality of its compliance programme, which was sharply criticized by the media and practitioners.
