Schlumberger unit to pay $233 million in Iran, Sudan sanctions case
WASHINGTON -- Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly owned subsidiary of Schlumberger Ltd., has agreed to enter a guilty plea and to pay a $232,708,356 penalty to the U.S. for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan.
The plea agreement, which is contingent upon the court’s approval, also requires SOHL to submit to a three-year period of corporate probation and agree to continue to cooperate with the government and not commit any additional felony violations of U.S. federal law.
In addition to SOHL’s commitments, under the plea agreement, SOHL’s parent company, Schlumberger Ltd., has also agreed to the following additional terms during the three-year term of probation, inter alia: 1) maintaining its cessation of all operations in Iran and Sudan; 2) reporting on the parent company’s compliance with sanctions; 3) responding to requests to disclose information and materials related to the parent company’s compliance with U.S. sanctions laws when requested by U.S. authorities; and 4) hiring an independent consultant to review the parent company’s internal sanctions policies and procedures and the parent company’s internal audits focused on sanctions compliance.
The guilty plea concludes a joint investigation commenced in 2009 and led by the Justice Department’s National Security Division, the U.S. Attorney’s Office for the District of Columbia and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Dallas Field Office.
“Over a period of years, Schlumberger Oilfield Holdings Ltd. conducted business with Iran and Sudan from the U.S. and took steps to disguise those business dealings, thereby willfully violating the U.S. economic sanctions against those regimes,” said Assistant Attorney General for National Security John P. Carlin. “The International Emergency Economic Powers Act is an essential tool that the U.S. uses to address foreign threats to national security through the regulation of commerce. Knowingly circumventing sanctions undermines their efficacy and has the potential to harm both U.S. national security and foreign policy objectives. The guilty plea and significant financial penalty in this case underscore that skirting sanctions for financial gain is a risk corporations ought not take.”
“This is a landmark case that puts global corporations on notice that they must respect our trade laws when on American soil,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “Even if you don’t directly ship goods from the U.S. to sanctioned countries, you violate our laws when you facilitate trade with those countries from a U.S.-based office building. For years, in a variety of ways, this foreign company facilitated trade with Iran and Sudan from Sugar Land, Texas. Today’s announcement should send a clear message to all global companies with a U.S. presence: whether your employees are from the U.S. or abroad, when they are in the U.S., they will abide by our laws or you will be held accountable.”
“Today's criminal guilty plea demonstrates the Commerce Department’s commitment to aggressively prosecute multinational corporations for violations involving embargoed destinations,” said Under Secretary Eric L. Hirschhorn of the U.S. Commerce Department’s Bureau of Industry and Security. “We will continue to pursue violators wherever they are located and whatever their size. I commend the Office of Export Enforcement and the Department of Justice for their outstanding efforts to investigate and prosecute this case.”
A criminal information was filed today in federal court in the District of Columbia charging SOHL with one count of knowingly and willfully conspiring to violate IEEPA. SOHL waived the requirement of being charged by way of federal Indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees by entering into a plea agreement with the government.
The plea agreement, which is contingent upon the court’s approval, requires that SOHL pay the U.S. government $232,708,356 and enter into a three-year period of corporate probation. SOHL’s monetary penalty includes a $77,569,452 criminal forfeiture and an additional $155,138,904 criminal fine. The criminal fine represents the largest criminal fine in connection with an IEEPA prosecution.
In addition to SOHL’s agreement to continue its cooperation with U.S. authorities throughout the three-year period of probation and not to engage in any felony violation of U.S. federal law, SOHL’s parent company, Schlumberger Ltd., also has agreed to continue its cooperation with U.S. authorities during the three-year period of probation, and hire an independent consultant who will review the parent company’s internal sanctions policies, procedures and company-generated sanctions audit reports.
