Embraer to Pay Fine of US$ 206 in Corruption Case

10/25/2016 - 14h29

Brazilian aircraft manufacturer Embraer will pay a fine of US$206 million to close a corruption case that has been under investigation by legal authorities in both the United States and Brazil.

Authorities have concluded that the company paid bribes in business deals done in India, Saudi Arabia, the Dominican Republic and Mozambique.

In addition to the financial penalties, Embraer will have to adopt anti-corruption compliance measures and will have to submit to external fiscalization by two monitors - one a Brazilian and the other a North American.

American legal authorities have been investigating the company since 2010 regarding the sale of military aircraft to the Dominican Republic.

In 2008, the Brazilian company paid a bribe of US$ 3,5 million to a retired Dominican Air Force Colonel during the negotiations for the sale of eight Super Tucano military aircraft for US$ 92 million.

During the investigation of this case, the Americans discovered that the same practice had been repeated in Mozambique. Also in 2008, Embraer paid US$ 800 thousand to an employee of Mozambique Airlines to facilitate the sale of two aircraft for US$ 65 million to the Mozambican company.

During negotiations to sell three aircraft to the Indian Airforce for US$ 208 million, Embraer contracted an agent who maintains an office in London (India prohibits the contracting of representatives in negotiations of this type) and distributed US$ 5,7 million to Indian authorities between 2005 and 2009.

In 2010 during negotiations to sell three aircraft to the Saudi Arabian state owned oil company Aramco, for US$ 93 million, Embraer paid a bribe of US$ 1,6 million to a government employee.

Of the total fine of US$ 206 million levied against Embraer, US$ 107 million will be paid to the US Federal Government and US$ 98 million to the SEC (Securities and Exchange Commission).

US$ 20 million from the part to be paid to the Federal Justice Department will be transferred to Brazil, and will then be re-transferred to the Fundo de Defesa dos Diretos Difusos (Defense Fund for Diffused Rights), a department of the Federal Justice Ministry which invests in social projects.

Translated by LLOYD HARDER

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