Iraqi Economists Network

شبكة الاقتصاديين العراقيين

Latest Economy News

Bribery: SFO secures its second conviction of 2021 as bribery returns to the courts’ radar in the UK

On 24 February 2021, the SFO secured a fourth conviction related to the long-running Unaoil case. Paul Bond, a former executive at Single Buoy Moorings Inc., was found guilty on two counts of conspiracy to give corrupt payments. He was sentenced to three and a half years’ imprisonment on Monday. The SFO commented that it will “relentlessly pursue” such cases.

This is the SFO’s second bribery success of 2021.

The case: corruption in 2007 Iraq

Paul Bond was the Middle East sales manager at Dutch oil and gas services company, Single Buoy Moorings Inc. (SBM). The case was a retrial after the jury initially failed to reach a verdict on charges against Mr Bond in July 2020.

In 2007, attempts were being made to rebuild the Iraqi economy in the context of a protracted war and a humanitarian crisis. The Iraqi Ministry of Oil planned to quadruple oil exports within five years. A key part of this plan was commissioning new oil pipelines and offshore mooring buoys in the Persian Gulf. SBM won a US$55 million contract from state-owned South Oil Company to provide these buoys.

SBM was a client of a Monaco-based oil and gas firm (Unaoil), and Unaoil employees paid more than US$900,000 in bribes to Iraqi officials at South Oil Company to secure the contract. Mr Bond worked directly with Unaoil employees.

Michael Brompton QC, acting for the SFO, told the court that the head of South Oil Company provided Unaoil with confidential documents about the projects in return for the bribes. This allowed Unaoil to influence technical specifications and obtain an advantage for SBM. The jury was shown emails sent by Mr Bond to another SBM director, one of which referred obliquely to Unaoil having a “presence close to the end user”.Mr Bond may not have known the precise terms of the bribes, but appears to have been aware of illegitimate behind-the-scenes communications and questionable conduct.

The Unaoil investigation

The SFO began to investigate Unaoil in March 2016 following allegations that it had acted corruptly in facilitating business deals, and a US Department of Justice investigation commenced in the same year. Over the course of its investigation, the SFO has uncovered bribes totalling US$17 million, paid to secure contracts worth US$1.7 billion for Unaoil and its clients. Three executives have already been convicted for involvement in the bribery scheme.

Basil Al Jarah, Unaoil’s Iraq partner, pleaded guilty in July 2019 to five offences of conspiracy to give corrupt payments. He had paid bribes totalling more than US$6 million to secure contracts to supply oil pipelines and offshore mooring buoys.

In July 2020, two Iraq territory managers for Unaoil, Stephen Whiteley and Ziad Akle, were convicted of conspiracy to give corrupt payments. They were sentenced to three and five years’ imprisonment, respectively.

The SFO has had less success in related proceedings. In January 2021, the SFO’s powers to obtain evidence held overseas by foreign companies were limited in a Supreme Court defeat. This case stemmed from a (since dropped) investigation into another company that had worked with Unaoil on international projects. Dentons published a briefing on the case here.

In February 2021, an employment tribunal also ruled that the senior investigator leading the Unaoil investigation had been unfairly dismissed. The US Department of Justice and a suspect in the investigation had complained about his behaviour, but the tribunal judge considered that these complaints were motivated by a desire to have the investigator removed from the relevant case and did not justify the dismissal.

SFO investigations: renewed activity

After 2020’s disruptions to the SFO’s work, when lockdowns hindered interviews and investigations, 2021 seems to be bringing renewed activity and a court focus on bribery. In a keynote speech at the Cambridge International Symposium on Economic Crime, Lisa Osofsky, the SFO’s Director, commented that the SFO had been assessing the fraud opportunities presented by COVID-19, and stood ready to take on appropriate COVID-19-related cases.

As ever, companies should carefully assess their practices and policies in order to mitigate the risks of fraud and bribery. Dentons has previously set out guidance on managing the risks of fraud and dishonest behaviour during the COVID-19 crisis, and companies should remain vigilant and be prepared for enquiries from the SFO, regulators or other bodies.

Source: Lecology, 3. March 2021



Comment here

%d bloggers like this: