Albemarle FCPA Enforcement Action: Part 1 – Background

Thomas Fox - Compliance Evangelist

Thomas Fox - Compliance Evangelist


Last week, Albemarle Corporation (Albemarle), a publicly traded specialty chemicals manufacturing company headquartered in North Carolina, agreed to pay more than $218 million to resolve investigations by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA) stemming from Albemarle’s participation in corrupt schemes to pay bribes to government officials in multiple foreign countries.

According to the DOJ Press Release, between 2009 and 2017, Albemarle, through its third-party sales agents and subsidiary employees, conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India. Albemarle illegally obtained profits of approximately $98.5 million as a result of the scheme.

What They Said

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division said, “Albemarle earned nearly $100 million by participating in schemes to pay bribes to government officials in multiple countries. As today’s announcement makes clear, the Justice Department will work tirelessly with our partners in the ongoing fight against international corruption. Today’s resolution also demonstrates the real benefits that companies can receive if they self-disclose misconduct, substantially cooperate, and extensively remediate.”

U.S. Attorney Dena J. King for the Western District of North Carolina said, “Corruption has no borders, but neither does justice. Companies are expected to adhere to the same ethical and legal standards whether they are doing business on U.S. soil or overseas. Albemarle’s eventual voluntary disclosure of fraud and subsequent efforts to remedy its business practices abroad is a step in the right direction for the company. Above all, today’s announcement underscores our commitment to fight corruption affecting the United States no matter where it occurs.”

IRS-CI Chief Jim Lee said, “The $218 million resolution announced today reflects IRS Criminal Investigation (IRS-CI) special agents’ commitment to working with our law enforcement partners to expose and disrupt organizations engaged in unscrupulous business practices aggressively. Thanks to our domestic and international law enforcement partners, we’ve ensured Albemarle will be held accountable for their misdeeds.”

Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit, said in an SEC Press Release, “Despite repeated and glaring bribery-related red flags, Albemarle failed for many years to implement sufficient internal accounting controls relevant to the use of agents by its global refining solutions business to make sales to state-owned customers around the world. This failure set the stage for wide-ranging misconduct.”

The Bribery Schemes

The bribery schemes were in multiple countries and varied in execution. The DOJ said, “In Vietnam, Albemarle corruptly obtained contracts at two state-owned oil refineries through an intermediary sales agent who requested increased commissions to pay bribes to Vietnam officials and to structure tender requirements to favor Albemarle. In Indonesia, Albemarle used a third-party intermediary to corruptly obtain catalyst business with Indonesia’s state-owned oil company, even after that third-party intermediary had informed Albemarle that it was necessary to pay bribes to Indonesian officials to obtain business. In India, Albemarle used a third-party intermediary to corruptly retain catalyst business with India’s state-owned oil company by avoiding Albemarle being blacklisted.”

The SEC said, “According to the SEC’s Order, despite significant red flags, Albemarle used agents from at least 2009 through 2017 that paid bribes to obtain sales of refinery catalysts to public-sector oil refineries in Vietnam, India, and Indonesia and private-sector oil refineries in India.” The SEC went on to note that “Albemarle violated the FCPA’s recordkeeping requirements and failed to devise and maintain a sufficient system of internal accounting controls to provide reasonable assurances that payments made to agents in Vietnam, Indonesia, India, China, and the United Arab Emirates were for legitimate services.”


The Penalties

According to the FCPA Blog, Albemarle agreed to pay the “DOJ and SEC $218 million in penalties and disgorgement to resolve FCPA offenses related to bribing government officials at state-owned oil refineries around the world.” With regard to the DOJ, Albemarle entered into a three-year non-prosecution agreement (NPA) to pay a penalty of approximately $98.2 million and administrative forfeiture of approximately $98.5 million.

This DOJ penalty included a reduction of $763,453 under Part II of the Criminal Division’s March 2023 Compensation Incentives and Clawbacks Pilot Program for bonuses that the company withheld from qualifying employees. Additionally, Albemarle agreed to pay approximately $103.6 million in disgorgement and prejudgment interest as part of the resolution of the SEC’s parallel investigation. The DOJ credited approximately $81.9 million of the forfeiture to be paid to the Department against disgorgement Albemarle has agreed to pay to the SEC.

According to the SEC, “Albemarle consented to the SEC’s Order finding that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Securities Exchange Act of 1934. Albemarle has agreed to cease and desist from committing or causing any future violations of these provisions and to pay disgorgement of more than $81.8 million plus prejudgment interest of more than $21.7 million, totaling more than $103.6 million.”

Join us tomorrow, where we take a deep dive into the bribery schemes.

Additional Resources

DOJ- Non-Prosecution Agreement

SEC Order


[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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