May 18, 2020

The SEC and DOJ approve the conclusion of Braskem monitorship

On May 13, 2020, Braskem S.A. (Braskem), a Brazilian petrochemical company, announced the end of its independent monitorship, after the US Department of Justice and the US Securities and Exchange Commission certified that the Company had complied with its obligations under the December 2016 DOJ and SEC settlement agreements.  In the news release, Braskem stated that the decision by the DOJ and SEC was based on a final report issued by the Company’s independent monitors, which certified that the Company had implemented all recommended enhancements to the Company’s compliance program, and concluded that the Company now meets the standards set out in the December 2016 DOJ and SEC settlement agreements.  The May 13 announcement follows Braskem’s announcement in March 2020 that Brazil’s Ministério Público Federal (MPF) had concluded its monitorship under the MPF’s 2016 Leniency Agreement with Braskem.

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 DOJ, the SEC, 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 (a time period which was later extended), and pay a combined global penalty of $957,625,737.  At the same time, Odebrecht agreed to a global penalty of $2.6 billion, which was later reduced based on its inability to pay. 

Braskem news release – May 2020 | Braskem news release – March 2020 | SEC Press Release – 2016 | Plea Agreement