Braskem signs global agreement and concludes negotiations with authorities
The agreements follow one week after the execution of the settlement agreement with the Brazilian Federal Prosecution Office (MPF).
Braskem concluded today an agreement with U.S. authorities, as well as the closure of Switzerland's investigation by the Office of the Attorney General pursuant to written order, which completes a global agreement resolving all allegations against the company arising from the "Car Wash" investigation. The agreements follow one week after the execution of the settlement agreement with the Brazilian Federal Prosecution Office (MPF).
Under the global agreement, Braskem will pay authorities the total amount of approximately US$957 million, equivalent to approximately R$3.1 billion, in penalty and damages. Of this total amount, approximately R$1.6 billion will be paid shortly after ratification of the agreements, with US$95 million paid to the U.S. Department of Justice (DoJ), US$65 million to the U.S. Securities and Exchange Commission (SEC), CHF 94.5 million to the Swiss Office of the Attorney General, and R$736 million to the Brazilian Federal Prosecution Office. The remaining balance of approximately R$1.5 billion will be paid to the Brazilian Federal Prosecution Office in six annual installments, restated by the variation in the IPCA consumer price index to adjust for inflation. The amount paid to the MPF will be directed to third party indemnification.
"We have reached the end of this long and detailed process of independent investigation and negotiations with the authorities," said Fernando Musa, CEO of Braskem since May 2016. "We have overcome this phase and now we will concentrate our focus on on the future. We are implementing more robust practices, policies and processes across the organization to enhance our governance and compliance system. With this final phase of the agreement in place, Braskem enjoys solid financial conditions and will continue to pursue its growth and international expansion strategy with the highest ethical business practices," said Musa.
Braskem acknowledges its responsibility for the acts of its former team members and agents, and regrets its past conduct. The company reaffirms its commitment to continue to cooperate with the authorities, and to adopting the appropriate and necessary measures to enhance its commitment to ethical business practices and transparency in its actions. As part of the resolution, Braskem has also agreed to engage an external and independent anti-corruption compliance monitor for three years, during which the Company will continue to enhance its anti-corruption compliance program above and beyond the extensive remedial steps already taken.
With the new structure of the Compliance Area, which reports directly to the Board of Directors, Braskem is implementing several initiatives which will help to avoid that the actions from the past be repeated in the future. In March 2015, when the first allegations of wrongdoings emerged, Braskem launched an independent investigation conducted by external law firms to clarify the matter. In October 2016, the company opened formal negotiations with the applicable authorities to resolve these allegations, which culminated in the agreements that were just signed. Braskem operates 40 industrial units in Brazil, United States, Germany and Mexico and serves clients in over 70 countries.