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Settlement Near in Long-Running FCPA Investigation

By Jeremy Hibbert | July 14, 2022 7:28 pm

Tidewater Inc. is close to a settlement with the Securities and Exchange Commission that would resolve allegations that the marine services company made corrupt payments to customs brokers in Nigeria and tax authorities in Azerbaijan.

In a recent securities filing, the company disclosed that it had reached an agreement in principle with the SEC, signaling an end to the civil side of a three-year-old Foreign Corrupt Practices Act investigation. Under the finalized agreement, the company would pay $11.4 million in civil penalties and disgorged profits.

Tidewater, whose vessels service the oil industry, said that it has yet to reach an agreement with the Justice Department and that any deal would likely involve “charges and sanctions imposed by the DOJ.”

The company launched an internal investigation of its operations in Nigeria in 2007, spurred by the Justice Department’s investigation of freight forwarder Panalpina World Transport Ltd. and associated oil and gas companies.

The internal investigation, conducted by Steptoe & Johnson LLP, eventually broadened to include Tidewater’s business in West Africa, Indonesia, Egypt and Azerbaijan.

In a 2008 SEC filing, the company described Steptoe’s findings:

The investigation initially focused on the procurement, through the use of a third party agent, of temporary importation permits for its vessels operating in Nigeria, but thereafter expanded to review certain aspects of operations in Nigeria, Angola and certain other countries in West Africa, Indonesia, Egypt and Azerbaijan. The investigation in certain of these additional areas of operations focused on customs, immigration and marketing practices, as well as measures taken by the company or related parties in certain of these jurisdictions to obtain local tax relief or abatement.

The SEC complaint would allege violations of the the FCPA’s anti-bribery and accounting provisions in connection with conduct involving tax authorities in Azerbaijan, according to a May 20 SEC filing. The complaint would allege violations of the FCPA’s accounting provisions related to company payments to customs broker to procure permits necessary for the company’s vessels to operate in Nigeria.

Under the agreement, Tidewater would neither admit or deny the allegations in the complaint.

Joe Palazzolo contributed reporting.

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