Netherlands: Settlements In Brief: Odebrecht, Teva Pharmaceutical And Rolls Royce Settle Bribery Cases

Enforcement actions by criminal and supervisory authorities are settled regularly. In light of these developments, companies are advised to take appropriate measures. This month we highlight some notable settlements which were signed in several countries. In the first case, two Brazilian construction and petrochemical companies, Odebrecht S.A. and Braskem S.A., settled with the Securities and Exchange Commission, the US Department of Justice, and Brazilian and Swiss prosecutors for violation of US anti-bribery rules as well as books and records provisions. The total settlement sum of USD 3.5 billion is the largest ever penalty in a foreign bribery case. In the second case, the Israeli generic drugs manufacturer Teva Pharmaceutical settled with the SEC and DOJ to resolve charges of making improper payments to government officials in several countries, in violation of US anti-bribery provisions. With this settlement, Teva becomes the first Israeli company to appear in the list of the top ten biggest cases under the Foreign Corrupt Practices Act. The settlement also emphasises US authorities' long reach in fighting bribery abroad. In the final case, UK-based engineering group Rolls-Royce settled with Brazilian, US and UK authorities for allegations of a long-running bribery scheme. The GBP 671 million fine is the largest ever levied by the UK's Serious Fraud Office.

The amount of settlements rushed through these two months can be connected to the end of the FCPA Pilot Program in April 2017. The new US administration must now decide whether or not to extend the Program.

Odebrecht S.A. and Braskem S.A. pay largest ever penalty in foreign bribery case

Odebrecht and its affiliate Braskem settled with American, Brazilian and Swiss authorities for allegations of an international bribery and political kickback scheme on 21 December 2016. Both Odebrecht and Braskem were charged with conspiring to violate the FCPA in the period from 2006 to 2014, and agreed to settle for a combined total amount of at least USD 3.5 billion. According to the DOJ, the final amount of the settlement with Odebrecht will be determined based on an analysis of their ability to pay.

Odebrecht, which operates in over 25 countries, has admitted to paying approximately USD 800 million to Brazilian government officials and legislators in exchange for USD 3.34 billion in ill-gotten benefits. For over a decade Odebrecht and its co-conspirators allegedly engaged in a secret internal financial scheme designed to bribe government officials, their representatives and political parties in more than 12 countries. As part of the scheme, Odebrecht and its co-conspirators created and funded a secret business structure within the company that was used for the approval and disbursement of bribe payments to government officials. This 'Division of Structured Operations' was founded in 2006 and utilised an entirely separate off-book communication system that allegedly concealed their activities. Odebrecht's finance department, as well as certain Odebrecht affiliates, funded this alleged scheme using wire transfers through one or more off-shore entities.

Under this settlement, around 80% of Odebrecht's monetary penalty will go to the Brazilian authorities, who led the way in the investigation. The US and Swiss authorities will both receive an amount equivalent to 10% of the total sum. The SEC did not bring a case against Odebrecht because the agency does not have jurisdiction in this matter.

According to the DOJ, Odebrecht failed to voluntarily disclose the conduct that led to the investigation, but will receive 25% credit for its cooperation with the US Fraud Section. According to the US plea agreement, Odebrecht must improve its anti-corruption compliance programme and has agreed to the imposition of an independent compliance monitor to reduce the risk of repeat misconduct. Odebrecht has reassured authorities of its continued cooperation with law enforcement, including a commitment to discipline or terminate the employment of the individuals responsible for the misconduct.

According to the SEC, Braskem S.A has also admitted paying bribes in order to secure lucrative construction contracts in Brazil. Braskem – whose ADRs trade on the New York Stock Exchange – agreed to pay a total global criminal penalty of USD 957 million and USD 325 million in disgorgement of profits, including USD 65 million to the SEC and USD 260 million to Brazilian authorities. The DOJ agreed to credit the criminal penalties paid to Brazilian and Swiss authorities as part of its agreement with Braskem. The US will receive USD 94.8 million, 15% of Braskem's total settlement.

The DOJ reached these solutions with Odebrecht and Braskem based on several factors, including; the nature and seriousness of the offence, which involved sophisticated schemes to bribe government officials using the highest levels of the companies; the lack of an effective compliance and ethics program; and credits for the cooperation of both companies. Odebrecht and Braskem also took remedial measures, including the enhancement of their anti-corruption compliance protocols and disciplining or terminating the employment of individuals responsible. Earlier in 2016, Odebrecht's former CEO had already been sentenced to 19 years imprisonment after being found guilty of corruption charges in Brazil.

The Odebrecht case emphasises the international cooperation between foreign public prosecutors to investigate and prosecute bribery and corruption violations. Significantly, the investigation of Odebrecht and Braskem and the subsequent anti-bribery enforcement did not emanate from Europe or the US, but from Brazil. The DOJ furthermore stated that these resolutions are a result of an extraordinary multinational effort to investigate and prosecute long-lasting corruption schemes and that it illustrated the importance of global partnerships in law enforcement.

Teva Pharmaceuticals first Israeli company to be penalised under FCPA

On 22 December 2016, the DOJ and SEC jointly penalised the Israeli drug manufacturer Teva Pharmaceutical for a total of USD 519 million to settle alleged violations of the Foreign Corrupt Practices Act (FCPA). Teva agreed to resolve criminal charges relating to schemes designed to bribe government officials in Russia, Ukraine and Mexico between 2007 and 2013. Teva entered into a deferred prosecution agreement (DPA) with the DOJ and agreed to pay a criminal penalty of USD 283 million. The SEC will receive an additional USD 236 million in disgorgement and interest. As part of the settlement, Teva's Russia subsidiary pleaded guilty to conspiracy to violate anti-bribery provisions of the FCPA.

According to the DOJ, Teva made more than USD 200 million in illicit profit by bribing high-ranking government officials in health ministries, intending to increase its market share, obtain regulatory approvals and increase sales at annual drug purchase auctions. Teva admitted paying bribes to a Ukrainian senior government official to get the approval for Teva drug registrations, enabling Teva to sell its products in the country.

Under the DPA, Teva agreed to:

  • pay a criminal penalty of USD 283 million
  • enhance its compliance programme and internal controls
  • adopt a stand-alone third-party due diligence programme
  • retain an independent compliance monitor for three years
  • continue to cooperate with the authorities during the investigation

This settlement is the first US settlement with an Israeli company that ranks in the top ten biggest FCPA settlements.

The DOJ emphasises the importance of timely and complete cooperation if a company wants to receive full cooperation credit, in line with the one-year FCPA pilot programme that started in April 2016. According to the DOJ, Teva failed to voluntarily self-disclose the misconduct and only cooperated after the SEC served it with a subpoena. Despite Teva's efforts to cooperate, the DOJ stated that Teva delayed the process in the early stages of the Fraud Section's investigation by vastly overstating assertions of attorney-client privilege. Teva responded late to certain document requests from the Fraud Section and therefore did not receive full cooperation credits. In the end, a 20% discount on the low end of the US Sentencing Guidelines was granted.

This case also highlights the importance for companies to have an effective third-party screening procedure and a due diligence programme for screenings of politically exposed persons (PEPs) – such as government officials – who engage with the company on a government's behalf.

Enforcement record for the SFO by Rolls-Royce settlement

In January 2017, Rolls-Royce settled with the SFO, DOJ and Brazilian authorities and agreed to pay more than USD 800 million to resolve long-running corruption allegations. Rolls-Royce entered into a DPA with the SFO and admitted to bribery and corruption involving intermediaries in a number of overseas markets. With this DPA, the SFO set an enforcement record by imposing 75% of the total fine, resulting in a criminal penalty of USD 605 million. This was the largest single investigation conducted by the SFO and its third DPA settlement since the instrument became available in 2014. In related proceedings, Rolls-Royce also settled with the DOJ and agreed to pay a USD 170 million criminal penalty. An additional USD 25.5 million must be paid as part of a leniency agreement with the public prosecutor in Brazil (MPF).

The settlement with Rolls-Royce followed a four-year investigation, initiated by the SFO. The investigation revealed systematic and long-running use of corrupt accounting practices as well as bribing of government officials between 1980 and 2013, across 13 countries. The settlement demonstrates the wide scale of the SFO's internal investigation.

Rolls-Royce admitted that it had failed to prevent conspiracy to make bribery payments in connection with its business operations. According to the DOJ, Rolls-Royce paid over USD 35 million in bribes through third parties to high-level foreign officials with substantial decision-making authority. In exchange, Rolls-Royce received confidential information and, along with its affiliated entities, was awarded several contracts.

The DOJ rewarded Rolls-Royce with a credit (effectively a deduction) of USD 25 million of the total fine in the US for the overlap between the fines in the US and Brazil. Therefore, the total fine to be paid in the US is USD 170 million. According to the DOJ, the conduct underlying the leniency agreement with the MPF overlaps with the conduct underlying part of the DOJ's settlement.

Rolls-Royce agreed to report on compliance enhancements for three years and continue its cooperation with the SFO, including cooperating with future prosecutions of individuals. Rolls-Royce has also set up an audit committee at each of its units.

The Rolls-Royce settlement is notable because it sets a precedent for voluntary self-reporting in DPAs issued by the SFO. Although the Rolls-Royce investigation was not triggered by a self-report – it came to light when two whistleblowers posted allegations online – the SFO argued that because of Rolls-Royce's extensive cooperation and provision of further information which may not have been revealed without this cooperation, it should be treated as having self-reported. The Crown Court ruled that, in accordance with the particular circumstances of this case, they should not distinguish between Rolls-Royce's assistance and that of a self-report from the outset. In the previous two DPAs, the SFO emphasised that it is highly important that companies self-report misconduct in order to allow the possibility of entering into a DPA. The Rolls-Royce case indicates that a DPA is still possible, in appropriate circumstances, even in cases where the company has not self-reported.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions