March 16, 2020

Braskem announces completion of Brazilian monitorship

On March 11, 2020, Braskem S.A., a Brazilian petrochemical company, announced that it had successfully concluded the monitorship to which it had agreed in a December 2016 leniency agreement with Brazil’s Ministério Público Federal (MPF).  In the news release, Braskem stated that its independent monitor had certified to the MPF that Braskem had implemented the recommended enhancements to its compliance program.  In the news release Braskem also noted that the DOJ and SEC had not yet certified the effectiveness of its enhanced compliance program. 

In December 2016, Braskem and Odebrecht S.A. (a global construction conglomerate based in Brazil that owns 50.11% of Braskem’s voting shares) entered into a global anti-corruption settlement with the US Department of Justice, the US Securities and Exchange Commission, the MPF, and the Swiss Bundesanwaltschaft.  As part of this settlement, Braskem acknowledged that it had conspired with Odebrecht to pay hundreds of millions of dollars to government officials in a dozen countries, as part of what the DOJ described as a “massive and unparalleled bribery and bid-rigging scheme.”  Braskem agreed to adopt enhanced compliance procedures, continue cooperating with law enforcement in connection with their respective investigations and prosecutions, retain independent compliance monitors for three years, and pay a combined global penalty of $957,625,737.  At the same time, Odebrecht agreed to a global penalty of $4.5 billion, which was later reduced to $2.6 billion because of its inability to pay. 

On January 29, 2020, the DOJ and Odebrecht submitted a joint letter to the US District Court for the Eastern District of New York, advising the District Court that the parties had agreed to extend the term of Odebrecht’s December 21, 2016 plea agreement for nine additional months, as a result of Odebrecht’s failure to fulfill its own monitorship obligations.

Braskem news releaseMPF news release (Lava Jato investigations) | DOJ press release (2016) | Plea agreement (DOJ)