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Trafigura has pleaded guilty to charges by US prosecutors of bribery in Brazil and has agreed to pay $127mn in fines and forfeited profits, in the latest in a series of corruption cases against the world’s largest commodity trading houses.
Under the plea agreement, Trafigura will pay $80.5mn in fines and $46.5mn in forfeited profits after paying approximately $19.7mn in “corrupt commissions” to the benefit of Brazilian officials in a bid to “secure improper advantages” on oil contracts between 2003 and 2014.
The company pleaded guilty to one count of conspiracy to violate the US Foreign Corrupt Practices Act, according to court documents.
Trafigura made the bribes to retain its business with state-controlled oil company Petrobras, prosecutors said, earning Trafigura entities about $61mn in profits during the decade-long period from illicitly obtained business with the Brazilian group.
Under the scheme, Trafigura and its co-conspirators agreed to make illicit payments of up to 20 cents per barrel of oil products bought from or sold to Petrobras, and to conceal the bribes via shell companies, prosecutors said.
Nicole Argentieri, head of the US Department of Justice’s criminal division, said Trafigura had “bribed Brazilian officials to illegally obtain business” for more than a decade. “Today’s guilty plea underscores that when companies pay bribes and undermine the rule of law, they will face significant penalties,” she added in a statement.
“These historical incidents do not reflect Trafigura’s values nor the conduct we expect from every employee,” Jeremy Weir, Trafigura’s executive chair and chief executive, said in a statement, adding he was “pleased the DoJ recognised the steps we have taken to invest in our compliance function”.
Petrobras did not immediately respond to a request for comment.
Trafigura in December revealed for the first time that it had made a provision of $127mn in its 2023 accounts to resolve a probe by the DoJ over past “improper payments” in Brazil.
The payments related to Brazil’s biggest political corruption case known as Lava Jato, or Car Wash, a vast contracts-for-kickbacks scheme with Petrobras at its centre. Company executives were paid bribes for handing out contracts in a conspiracy that involved a construction cartel. Its revelation led to the imprisonment of dozens of politicians and businessmen.
Some of the payments were made in cash at Trafigura’s office in Rio de Janeiro, according to court documents. To generate that cash for the bribes — coded as “commissions” by those involved — a Trafigura executive used “illicit-market money exchangers” in Brazil known as “doleiros”, as well as making wire transfers.
In order to facilitate delivery of the bribes, the co-conspirators sent an invoice from a Hong Kong company for purported consulting services related to buying floor and wall tiles from Brazil for $390,240. Trafigura paid that sum to one of the co-conspirators, who then paid the money into a Hong Kong account for the ultimate benefit of Petrobras officials.
The DoJ gave Trafigura credit for its co-operation and remedial measures, but not for voluntary disclosure.
Trafigura’s plea marks the first time that it has admitted to wrongdoing in the Car Wash scandal, following rivals Glencore and Vitol admitting to having made bribes in the country in order to settle broader corruption probes into them.
In 2018, Brazilian prosecutors charged two former Trafigura executives Mariano Marcondes Ferraz and Marcio Pinto de Magalhães for allegedly paying bribes of about $1.5mn.
The civil case into Trafigura in Brazil for the Car Wash scandal has been suspended but some of the $127mn set aside can also be used for settlements with the Brazilian authorities.
The case draws a line under the DoJ’s current public pursuits of Trafigura, although the group and its former chief operating officer Mike Wainwright still face charges in Switzerland about suspected bribery payments in Angola.
Other commodity trading houses have also been struck with penalties by the DoJ for bribery and corruption in recent years. In 2022, Glencore pleaded guilty to multiple counts of bribery in Africa and Latin America to access oil and received penalties of more than $1bn.
Rival oil trader Gunvor also pleaded guilty earlier this month over bribes in Ecuador to secure oil contracts, resulting in more than $660mn in fines and forfeited profits. Oil trader Vitol agreed to pay more than $160mn to authorities in the US and Brazil in 2020 for bribery in Brazil, Ecuador and Mexico.
Additional reporting by Michael Pooler