Comment from a former employee of Shell Oil USA

John,

You have Shell’s dirty laundry hanging on line again.

I am certain Shell is very unhappy about the publication of that ‘Cease and Desist’ order, etc., for all Shell employees and loyalists to read.

U.S. SECURITIES AND EXCHANGE COMMISSION CEASE AND DESIST ORDER: ROYAL DUTCH SHELL BRIBERY AND CORRUPTION

I have also read much of your nine parts on Shell and the Nazis. This was a revisit to my history classes when I was in college. I am very familiar with much of what you published.

Nicely done.

I was not aware of the HUGE financial support that Deterding gave the Nazis. I have always wondered how they supported themselves in the early years of their rise to power. When I was studying this stuff none of the historians that wrote the text books really figured it out either. Now I know where they got much of their money and influence to keep functioning and to keep the legal authorities off their back. The Nazi’s were given an amazing amount of ‘freedom’ in the way they operated in the early years, considering their tactics, and that ‘freedom’ clearly came from influence in high places.

Deterding’s very substantial support was clearly crucial to the survival and rise of the Nazi Party. This gave Hitler a source of funding, and respectability within the European industrial establishment his ‘competition’ did not have. That connected ‘respectability’ was as important as the money, because Deterding’s support obviously led other major leaders of German industry to likewise give Hitler support, even if they had to hold their noses while doing so. It just wasn’t the money, it was the ‘connection’ with the very powerful and influential ‘Sir Henri’ that was important. I am certain Deterding’s influence led to a host of useful connections. This in turn gave Hitler, et al, the resources they needed to buy the ‘muscle’ and ‘protection’ they needed to intimidate the opposition. Deterding has got a lot of blood on his hands.

Shell should have a small swastika on its so very famous logo.

The article relating to Shell’s relationship with Germany’s IG Farben and slave labor has a familiar ring to it today. Shell’s new ethanol joint venture in Brazil with the Cosan group, which has been accused of using enforced slave labor, would be a modern day analog of Shell’s corporate amoral ethical culture similar in nature to that which pervaded the company in the days of Deterding and the Nazi’s. Obviously, Shell did not and still doesn’t care who they get into bed with as long as the venture makes money. This will be an interesting enterprise that the human rights watch groups should keep a close eve on.

I found your reference to Deterding being mentioned in Mein Kampf to be very interesting. Hitler was imprisoned in 1924 for his involvement in the 1923 Munich ‘Beer Hall Putcsh’, and it was there he wrote Mein Kampf. So, it appears that Deterding was involved with Hitler and the Nazi’s long before they came to power.

It is my guess that Deterding was very fearful of a communist take-over from a very weak Weimer German government and chose to throw in his lot with Herr Hitler and his mob in an effort to stop such action, and perhaps to launch some sort of effort to topple the Bolsheviks in Moscow. The Communist revolution was far from solidified in 1923. In fact, the country was going through a civil war.

In my rummaging around I found this:

On the morning of January 5, 1926, the London Morning Post published an extraordinary letter signed by Sir Henri Deterding. In this letter, Deterding proclaimed that plans were afoot to start a new war of intervention against Soviet Russia. Deterding declared:

. . . before many months, Russia will come back to civilization, but under a better government than the Czarist one. . . . Bolshevism in Russia will be over before this year is; and, as soon as it is, Russia can draw on all the world’s credit and open her frontiers to all willing to work. Money and credit will then flow into Russia, and, what is better still, labor.

A well-known French journalist of the Right, Jacques Bainville, commented in Paris: “If the President of the Royal Dutch has given a date for the end of the Soviet regime, it is because he has reason for doing so. . . .”

I have not looked it up but this quote makes it clear that Deterding wanted the Bolshevik’s heads, probably so he could get his hands back on the former Baku oil fields that RD Shell once controlled.

I bet Exxon is delighted they don’t have the equivalent of your website haunting them as well. They have some rancid skeletons in their closet too.

Staff meeting of the Shell oil factory in Hamburg Curio-Haus, 8 April 1935

UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 Release No. 63243 / November 4, 2010

ACCOUNTING AND AUDITING ENFORCEMENT Release No. 3204 / November 4, 2010

ADMINISTRATIVE PROCEEDING File No. 3-14107

In the Matter of ROYAL DUTCH SHELL plc,
and
SHELL INTERNATIONAL EXPLORATION AND PRODUCTION INC.,
Respondents.

ORDER INSTITUTING CEASE- AND-DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING SANCTIONS AND A CEASE-AND- DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Royal Dutch Shell plc, (“ Respondent Shell”) and against Shell International Exploration and Production Inc. (“Respondent SIEP”).

II.

In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (“Offers”), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over Respondents and the subject matter of these proceedings, which are admitted, Respondents consent to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions and A Cease- and-Desist Order (“Order”), as set forth below.

III.

On the basis of this Order and Respondents’ Offers, the Commission finds1 that:

A.    SUMMARY

This matter concerns violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (“FCPA”) by Respondent SIEP and the record keeping and internal controls provisions of the FCPA by Respondent Shell. From September 2002 through November 2005, SIEP, on behalf of Shell, authorized the reimbursement or continued use of services provided by a company acting as a customs broker that involved suspicious payments of approximately $3.5 million to officials of the Nigerian Customs Service in order to obtain preferential treatment during the customs process for the purpose of assisting Shell in obtaining or retaining business in Nigeria on Shell’s Bonga Project. As a result of these payments, Shell profited in the amount of approximately $14 million. None of the improper payments was accurately reflected in Shell’s books and records, nor was Shell’s system of internal accounting controls adequate at the time to detect and prevent these suspicious payments.

B.    RESPONDENTS

Royal Dutch Shell plc (“Shell”), an English-chartered company, headquartered in The Hague, Netherlands, focuses, through its subsidiaries, on oil, gas, and power production and exploration. Shell’s American Depository Receipts are registered with the Commission pursuant to Section 12(b) of the Exchange Act, and trade on the New York Stock Exchange.2

Shell International Exploration and Production Inc. (“SIEP”), a Delaware company with headquarters in Houston, Texas, is a wholly owned indirect subsidiary of Shell. SIEP acted as an agent of Shell for purposes of the Bonga Project. SIEP’s financial results are components of the consolidated financial statements included in Shell’s filings with the Commission.

C.    OTHER RELEVANT ENTITY

Shell Nigerian Exploration and Production Company Ltd. (“SNEPCO”), located in Nigeria, is a wholly owned subsidiary of Shell Petroleum N.V., which, in turn, is a wholly owned direct subsidiary of Shell. SNEPCO performed work on the Bonga Project.

D.    FACTS

I.    The Bonga Project

Bonga, discovered by a Shell subsidiary in 1995, was the first deepwater offshore oil and gas project in Nigeria.    Developmental drilling on the Bonga Project began in December 2000 and the project reached First Oil3 in November 2005.

The Bonga field was developed by SNEPCO (55% interest), on Shell’s behalf, and other oil companies pursuant to a Production Sharing Contract with the Nigerian National Petroleum Corporation (“NNPC”). Under the Production Sharing Contract, the oil companies were responsible for all upfront costs associated with reaching First Oil, but the costs were subsequently fully recoverable from the proceeds of oil production.

The Bonga Project, authorized and approved by Shell’s board, was executed jointly across several Shell entities, including SIEP and SNEPCO. In particular, SIEP provided experienced project and technical personnel for the project who were responsible for such things as project controls, project accounting, document control, cost planning, cost controls, and handling claims against contractors. A SIEP employee located in Houston managed the contractual relationship with one of the Contractors on the project and was responsible for reviewing and approving invoices and underlying documentation submitted by the Contractor. Another SIEP employee was head of the Bonga Project Services Team with responsibility for reviewing and approving invoices and underlying documentation submitted by the Contractors before the invoices were passed on to SNEPCO’s finance department for payment. In addition, on a monthly basis, the Bonga Project Manager reported on the progress of the Bonga Project through the corporate chain up to a member of Shell’s board of directors.

Developing the Bonga field required the transportation of large amounts of equipment and parts into Nigeria. Pursuant to the Production Sharing Contract, ownership of this equipment passed to NNPC once imported into Nigeria. SNEPCO, on behalf of Shell, however, was responsible for arranging importation of the equipment and for paying customs duties on the items, which costs, pursuant to the contract, were recoverable later from the proceeds of oil production.

In developing Bonga, SNEPCO, on behalf of Shell, hired a number of contractors, unaffiliated with Shell, including Contractor A and Contractor B. In order to assist in the importation into Nigeria of equipment necessary for the Bonga Project, the Contractors, and in some instances SNEPCO directly, hired the services of an international freight forwarding and customs clearing company (“Courier Subcontractor”) for transporting and customs clearance.4

One of the services Courier Subcontractor provided was an express door-to-door courier service (“Courier Service”) that expedited the delivery of goods and equipment into Nigeria. The Nigerian customs clearance process was routinely delayed, often taking weeks or even months to clear equipment through customs. In addition, the Bonga Project was over-budget and behind schedule and a significant amount of equipment needed to be imported into Nigeria. These circumstances led to the repeated use of Courier Subcontractor’s Courier Service.

Courier Subcontractor was able to expedite the importation of goods because of an “on the side” agreement between Courier Subcontractor and members of the Nigerian Customs Service (“NCS”) in which Courier Subcontractor made corrupt payments to NCS officials to bypass the normal customs process. Goods shipped using Courier Subcontractor’s Courier Service arrived in Nigeria “customs cleared,” resulting in a significant savings of time and a reduction in the required customs duties and tariffs with a significantly higher freight fee. Typically, Courier Subcontractor billed the Contractors who paid the bill and, in turn, sought reimbursement, which required approval from SIEP. Certain of Courier Subcontractor’s invoices charged a special fee (i.e. bribe). The special fee was initially invoiced as a “local processing fee” and later invoiced as “administration/transport charges.” The use of Courier Subcontractor’s Courier Service expedited shipments into Nigeria by about 20 to 39 days. Therefore, a shipment that would take 30 days to clear Nigerian customs using regular air freight could clear customs in as quickly as 10 days using the Courier Service.

II.    The Bonga Project Contractors a.    Bonga Project Contractor A

Under the contracts with the Bonga Project Contractors all costs were borne by the Contractors, subject to certain exceptions, such as, customs duties. SNEPCO, on behalf of Shell, was financially responsible for all customs duties and the Contractors were responsible for all shipping costs. For customs duties greater than $100,000, SNEPCO, on behalf of Shell, paid the Nigerian government directly. For customs duties less than $100,000, the Contractors paid and sought reimbursement. The payments at issue in this proceeding were each under $100,000, and were initially paid by the Contractors. In February 2004, Contractor A submitted a contract variation request for reimbursement of a $1.8 million accruement in “additional transportation and related charges” relating to the use of Courier Subcontractor’s Courier Service and the payment of local processing fees.5
In analyzing whether to reimburse Contractor A for these courier costs, certain employees of SIEP responsible for approving the payment of invoices, were made aware of red flags relating to the service and that it likely involved illicit payments to customs officials. For example, SIEP repeatedly requested that Courier Subcontractor and Contractor A provide a receipt from NCS proving that the local processing fee had been deposited into a Nigerian Government account. However, neither company was able to supply such receipts. In addition, certain SIEP employees learned that Courier Subcontractor’s Courier Service bypassed the normal customs duty payment process and that using the service “reduced [ ] liability for Nigerian Customs and Import Duty.”

In July 2004, SIEP rejected Contractor A’s contract variation request for the additional charges relating to the use of the Courier Service. At the same time, a “no proof, no pay” policy was implemented for the Bonga Project. Pursuant to the policy, SIEP, on behalf of Shell, would not approve reimbursement to Contractor A for any expenses relating to the Courier Service unless Contractor A could provide (1) Courier Subcontractor’s receipts from NCS validating that customs duties were paid directly into an official NCS banking or financial institution and (2) NCS documentation confirming that associated payments satisfied the customs duties and that no further duties would be due. At the time, certain individuals at SIEP had concluded that it was unlikely that Contractor A would be able to provide such proof. However, certain SIEP employees continued to permit the Contractors to use Courier Subcontractor for customs clearance and Courier Subcontractor’s Courier Service. In addition to continuing to encourage and support the use of Courier Subcontractor’s courier service, certain individuals working on the Bonga Project also tried, without success, to modify the “no proof, no pay” policy in order to reimburse the courier expenses even without proof that payment had been made into a Nigerian government account.

b.    Bonga Project Contractor B

During the course of the Bonga Project, Contractor B sustained financial difficulties and accordingly, SIEP, on behalf of Shell, put in place a process to advance funds to Contractor B to pay Bonga Project expenses as they became due, including Contractor B’s payment of shipping costs to Courier Subcontractor for the use of the Courier Service.    Despite the red flags that came to SIEP employees’ attention in examining whether to reimburse Contractor A for its courier expenses, SIEP approved advancing funds to Contractor B for the use of the Courier Service, even when Contractor B could not provide valid customs receipts as required by the “no proof, no pay” policy. Further, certain Bonga Project personnel agreed to a proposal by Courier Subcontractor to increase the tariff rate in Contractor B’s and Courier Subcontractor’s contract to hide the “local processing fees” which would no longer be broken out as a separate line item.

In total, approximately $3.5 million in suspicious payments were made to Nigerian customs officials. Approximately $1.8 million of these payments were for “local processing fees” and “administrative/transport charges” related to Courier Subcontractor’s Courier Service. SIEP, on behalf of Shell, authorized reimbursement of approximately $2.5 million of these payments.6

SIEP’s Exchange Act Section 30A Violations

Section 30A of the Exchange Act makes it unlawful for an issuer that has a class of securities registered under Section 12 of the Exchange Act, or “for any officer, director, employee or agent of such issuer . . . acting on behalf of such issuer, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any person while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official . . . ” for, among other things, influencing any act or decision of such foreign official in his official capacity in order to assist such issuer in obtaining or retaining business.

As detailed above, Respondent SIEP, an agent of Shell, authorized the reimbursement and continued use of Courier Subcontractor’s services that involved unlawful payments to Nigerian customs officials in order to obtain preferential treatment during the customs process for the purpose of assisting Shell in obtaining or retaining business in Nigeria on Shell’s Bonga Project. As a result, SIEP violated Section 30A of the Exchange Act. Shell benefitted through these payments by bypassing the normal customs process and importing equipment into Nigeria faster than Shell would have had the payments not been made. Ultimately, this accelerated Shell’s ability to reach First Oil and provided Shell with the value of its oil production profits sooner than it would have had it not made the payments. By avoiding the payment of certain customs duties through these payments, Shell also benefited by having the use of those funds when Shell would have otherwise had to wait to be reimbursed from the proceeds of oil production. As a result of these payments, Shell profited in the amount of $14,153,536.

Exchange Act Section 13(b)(2)(A) and 13(b)(2)(B) Violations

Section 13(b)(2)(A) of the Exchange Act requires every issuer to make and keep books, records, and accounts, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.

Respondent Shell violated Section 13(b)(2)(A) because Shell’s books and records did not accurately reflect the nature of the improper payments. Instead, the improper payments were recorded as legitimate transaction costs such as “local processing fees” and “administration/transport charges” and thus were not fairly reflected or accurately recorded in its books, records, and accounts.

Section 13(b)(2)(B) of the Exchange Act requires every issuer to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) that transactions are executed in accordance with management’s general or specific authorization; and (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements. As evidenced by the details surrounding SIEP’s authorization of reimbursement and continued use of Courier Subcontractor’s services, Respondent Shell failed to devise and maintain an effective system of internal controls to prevent or detect illegal payments and as such, violated Section 13(b)(2)(B).

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondents’ Offers.
Accordingly, it is hereby ORDERED that pursuant to Section 21C of the Exchange Act:

A.    Respondent SIEP cease and desist from committing or causing any violations and any future violations of Section 30A of the Exchange Act and Respondent Shell cease and desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act;

B.    Respondents shall, within 30 days of the entry of this Order, jointly and severally, pay disgorgement of $14,153,536 and prejudgment interest thereon of $3,995,923 to the United States Treasury. If timely payment is not made, additional interest shall accrue pursuant to Rule 600 of the Commission’s Rules of Practice. Such payment shall be: (A) made by United States postal money order, certified check, bank cashier’s check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Stop 0-3, Alexandria, VA 22312; and (D) submitted under cover letter that identifies Royal Dutch Shell plc and Shell International Exploration and Production as Respondents in these proceedings, the file number of these proceedings, a copy of which cover letter and money order or check shall be sent to Laura B. Josephs, Assistant Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549.

By the Commission.
Elizabeth M. Murphy Secretary

1. The findings herein are made pursuant to Respondents’ Offers and are not binding on any other person or entity in this or any other proceeding.

2. The conduct at issue in the matter primarily occurred prior to a corporate restructuring which created Royal Dutch Shell plc. Royal Dutch Petroleum Company, a Dutch company, and The “Shell” Transport and Trading Company, an English company, are predecessors to Royal Dutch Shell plc. During the relevant period, the ordinary shares of Royal Dutch Petroleum Company and the American Depository Receipts of The “Shell” Transport and Trading Company were registered with the Commission and traded on the New York Stock Exchange.    On October 28, 2004, the Royal Dutch Petroleum Company board and The “Shell” Transport and Trading Company board voted to propose to shareholders the unification of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company under a single parent company, Royal Dutch Shell plc. In July 2005, the transaction was completed in which Royal Dutch Shell plc became the parent company of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company.

3. “First Oil” is the point at which the project’s construction phase ceases, and the project commences production.

4. In February 2007, one of the Bonga Project Contractors pleaded guilty to violations of the Foreign Corrupt Practices Act and agreed to pay $26 million in criminal fines in connection with the payments to Nigerian customs officials through Courier Subcontractor to obtain preferential treatment during the customs process. See United States v. Vetco Gray UK Limited, CR H07-04 (LNH) (S.D. Tex. 2007).

5. Contractor A made subsequent additional requests bringing its total reimbursement request to $2.1 million.

6. The activity relating to the additional $1 million in suspicious payments was authorized by SIEP, but the reimbursement of those funds was ultimately not authorized.

SEC SHELL ORDER NOV 2010 (INCLUDING SERVICE LIST)

RELATED SEC PRESS STATEMENT

Anti-Corruption Speeches by Richard Wiseman, Chief Ethics & Compliance Officer, Royal Dutch Shell Plc

BUSINESS ETHICS AND INTEGRITY: CORPORATE RESPONSIBILITY IN SHELL: Asia Anti-Corruption Conference

Extract:

A reputation for integrity is a priceless asset which can vanish or be severely tarnished by a single error of judgment.

Best Practice in Combating Corruption Extortion and Bribery (Related article)

The company said Shell’s Nigerian employees “specifically requested Panalpina Nigeria to provide false invoices with line items to mask the nature of the bribes.” Shell wanted to “hide the nature of the payments to avoid suspicion if anyone audited the invoices,” Panalpina said.

Shell separately admitted paying $2 million to Nigerian subcontractors on its deepwater Bonga Project. Shell knew some money would go as bribes to Nigerian officials to circumvent the customs process and give the company “an improper advantage,” according to its admission in federal court in Houston.

Shell Bribes Among ‘Culture of Corruption,’ Panalpina Admits

November 05, 2010, 12:03 AM EDT

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

SOURCE ARTICLE

Royal Dutch Shell is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria, the paper reported.

NASDAQ

By Joseph Palazzolo, Of DOW JONES NEWSLETTERS

The Justice Department and the Securities and Exchange Commission are close to announcing settlements in several foreign-bribery cases linked to Swiss logistics company Panalpina Group, with civil and criminal penalties likely reaching hundreds of millions of dollars, people familiar with the matter said.

The Wall Street Journal reported on Friday that Panalpina and one of its customers, Royal Dutch Shell PLC (RDSA, RDSA.LN), were on the brink of settling the three-year-old probe. Investigators have been looking at whether the logistics company paid officials in Nigeria and other countries to gain customs clearance and permits for a raft of oilfield services companies.

Along with Panalpina and Royal Dutch Shell, the Justice Department and the SEC will likely announce settlements with oilfield services companies Nabors Industries Ltd. (NBR), Noble Corp. (NE), Pride International Inc. (PDE), Tidewater Inc. (TDW) and Transocean Ltd. (RIG), the people familiar with the situation said.

Officials plan to announce all the settlements at once, possibly by the end of the month, one person said, adding that negotiations with some of the parties are ongoing. Officials have been organizing the group settlement for months, and some of the companies involved have expressed pique at having to wait for others, the people said.

A spokesman for Panalpina said that negotiations were ongoing and that the company was “confident” a settlement would be reached by the year’s end. The other companies involved either declined to comment or didn’t respond to requests for comment.

The companies have all said in their corporate filings that they are cooperating with the Justice Department and the SEC.

The investigation surrounding Panalpina, which withdrew from the custom clearance and freight-forwarding markets in Nigeria in 2008, is driven by the Foreign Corrupt Practices Act, which bans companies from paying bribes to foreign officials to obtain or keep business.

Individually, the settlement amounts in the Panalpina investigation are likely to be smaller than in some other high-dollar FCPA cases this year. Engineering company Technip SA, for example, agreed in June to pay $338 million in disgorgement and criminal fines to resolve charges that from 1994 to 2005 the company bribed Nigerian officials to win $6 billion in contracts.

That settlement was part of a separate FCPA investigation of a scheme to bribe Nigerian officials to obtain engineering, procurement and construction contracts. The SEC and the Justice Department have obtained more than $900 million in criminal and civil penalties in those cases.

The Panalpina investigation came to light in 2007, after subsidiaries of Vetco International Ltd. pleaded guilty to paying $2.1 million in bribes to Nigerian customs officials through the Swiss logistics company. Vetco agreed to pay $26 million in criminal fines, the largest-ever FCPA penalty at the time.

Taken together, the new Panalpina-related settlements could be among the largest in the statute’s 33-year history. Based on company estimates in SEC filings, the total is likely to exceed $200 million in civil and criminal penalties.

Panalpina is expected to pay around $85 million in fines to settle charges that paid bribes to officials in Nigeria, Saudi Arabia, Algeria and Kazakhstan to expedite services, such as clearing drilling rigs and other equipment through customs, The Wall Street Journal reported.

Royal Dutch Shell is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria, the paper reported.

Pride has reserved about $52 million to settle allegations that from 2001 to 2006 it paid government officials–directly and through companies such as Panalpina–in Saudi Arabia, Kazakhstan, Brazil, Nigeria, Libya, Angola and the Republic of the Congo to expedite services, according to SEC filings.

Tidewater has set aside $11 million to settle civil charges related to payments the company made in Nigeria and Azerbaijan, the company said in corporate filings. The company said in the filings it expects to pay a criminal fine as well but made no prediction about the amount. Meanwhile, Noble has reserved about $5 million for an expected settlement.

Nabors Industries and Transocean haven’t disclosed how much they expect to pay to resolve civil and criminal investigations related to their business relationship with Panalpina.

But Transocean and other companies involved have said in SEC filings that the investigation has taken its toll.

Last month, Transocean disclosed that it may not be able to obtain or renew import permits to operate rigs in Nigeria and other West African countries without falling foul of the FCPA.

Although companies often acknowledge the risk of doing business in emerging markets, Transocean’s disclosure was a stunning example of the escalating enforcement of the FCPA and the shadow it casts over those seeking to tap into West Africa’s oil reserves, considered among the most promising in the world.

Noble, likewise, said in a filing that import permits for two of its three rigs in the area had expired in 2008, after the company came under investigation by U.S.authorities. The renewal applications have been pending for nearly two years without action by the Nigerian customs office, the company said.

Noble said it had obtained a temporary import permit for a third rig that arrived in the country in 2009.

Schlumberger Ltd. (SLB, SLBS.VI) has also disclosed an FCPA investigation related to Panalpina in SEC filings, and the company faces a separate FCPA probe for its dealings in Yemen, The Wall Street Journal reported.

(END) Dow Jones Newswires
10-21-101409ET
Copyright (c) 2010 Dow Jones & Company, Inc.

SOURCE ARTICLE

Investigation on behalf of current long term investors in Royal Dutch Shell plc (ADR) (NYSE:RDS.A) over possible foreign bribery – RDS.A stockholders should contact the Shareholders Foundation at mail@shareholdersfoundation.com

After the U.S. Department of Justice begun looking into allegations against Royal Dutch Shell plc (ADR) as a customer of Panalpina Group in connection with possible foreign bribery an investigation on behalf of current long term investors in Royal Dutch Shell plc (ADR) (NYSE:RDS.A) was announced.

If you are a current long term investor in Royal Dutch Shell plc (ADR) (NYSE:RDS.A), and/or have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation, Inc by email mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

The investigation by a law firm on behalf of current long term investors in Royal Dutch Shell plc (ADR) (NYSE:RDS.A) concerns whether certain officer and directors of Royal Dutch Shell plc (ADR) possibly violated the U.S. Foreign Corrupt Practices Act (“FCPA”), which prohibits companies from making improper payments to foreign officials for the purpose of obtaining or keeping business.

Netherlands Royal Dutch Shell plc (Shell) is an independent oil and gas company. Royal Dutch Shell plc (ADR) reported in 2006 $318billion in 12 month Total Revenue, in 2007 $355billion, in 2008 $458billion, and in 2009 $278billion. Its Net Income went from $25.4billion in 2006 to $12.5billion in 2009.

In July 2007, Shell’s US subsidiary, Shell Oil, was contacted by the US Department of Justice regarding Shell’s use of the freight forwarding firm Panalpina, Inc and potential violations of the US Foreign Corrupt Practices Act (FCPA) as a result of such use. Shell has an ongoing internal investigation and is co-operating with the US Department of Justice and the US Securities and Exchange Commission investigations.

In October 2010 the Wall Street Journal reported also that Royal Dutch Shell plc (ADR) as a customer of Panalpina Group is also among the companies investigated by the U.S. Justice Department and the Securities and Exchange Commission in connection with potential foreign bribery and violations of the U.S. Foreign Corrupt Practices Act by Panalpina Group. According to the Justice Department “the Foreign Corrupt Practices Act was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay…to a foreign official to influence the foreign official in his or her official capacity … to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”

Panalpina Group, which has 14,000 employees and branches in more than 80 countries, is a supplier of forwarding and logistics services, specializing in end-to-end supply chain management solutions and intercontinental air freight and ocean freight shipments.

According to the Wall Street Journal the Panalpina Group is at the center of a sprawling probe into whether it paid officials in places including Nigeria, Saudi Arabia, Algeria and Kazakhstan to expedite services, such as clearing drilling rigs and other equipment through customs.

The Wall Street Journal recently reported that Panalpina is expected to pay around $85 million in fines to settle charges that it violated the U.S. Foreign Corrupt Practices Act. The Wall Street Journal said that Royal Dutch Shell plc is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria.

Shares of Royal Dutch Shell plc (ADR) traded in 2006 at $61 per share and increased until the end of 2006 to $70.79 per share. RDS.A continue to increase in 2007 and closed 2007 at $84.85 per share. During the first half of 2008 RDS.A fell to $65.68 per share before climbing to over $86 per share in May 2008. Since May 2008 RDS.A shares lost value and closed 2008 at roughly $52 per share. In 2009 RDS.A continued to lose value and traded as low as $41.89 per share in March 09. Since then RDS.A shares were able to regain value and currently traded at $63.65 per share, its trading price during the first half of 08.

Those who are current long term investors in Royal Dutch Shell plc (ADR) (Public, NYSE:RDS.A), and/or have any information relating the investigation, have certain options and should contact the Shareholders Foundation, Inc by email mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

Shareholders Foundation, Inc.

Trevor Allen

3111 Camino Del Rio North -

92108 San Diego

Phone: +1-(858)-779-1554

Fax: +1-(858)-605-5739

mail@shareholdersfoundation.com

www.ShareholdersFoundation.com

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Shell, the Anglo-Dutch energy giant, is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria…

Law Blog October 15, 2010

The FCPA Steamroller Nears Panalpina, Royal Dutch Shell

We began hearing that the Justice Department was ramping up its enforcement of the Foreign Corrupt Practices Act sometime in 2006.

Last week, the WSJ’s Dionne Searcey broke the news of the Justice Department’s investigation of oil-services company Schlumberger for alleged bribery-related activity in Yemen. Today’s news: A big Swiss shipping and logistics company and Royal Dutch Shell, one of its customers, are close to settling foreign-bribery charges stemming from a three-year U.S. investigation. Click here for the story, from the WSJ’s Kara Scannell and Thomas Catan. Click here for a sidebar from Searcey on the revitalization of the law.

According to the story, Panalpina Group, which has 14,000 employees and branches in more than 80 countries, has been at the center of a sprawling probe into whether it paid officials in places including Nigeria, Saudi Arabia, Algeria and Kazakhstan to expedite services, such as clearing drilling rigs and other equipment through customs.

The case could set new standards of vigilance for global companies that rely on contractors to operate in parts of the world where resources are plentiful but the rule of law is shaky, attorneys familiar with such cases said.

Spokesmen for the companies and agencies involved in the Panalpina probe either declined to comment or didn’t respond to requests for comment.

Panalpina is expected to pay around $85 million in fines to settle charges that it violated the U.S. Foreign Corrupt Practices Act, said people familiar with the matter.

Shell, the Anglo-Dutch energy giant, is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria, these people said.

In the meantime, the DOJ is using an interesting tactic: going after contractors alleged to have paid bribes on behalf of their corporate clients. Ignorance is no defense under this law, so companies have been advised they must know exactly what their agents are doing in order to avoid liability.

Some legal experts are wondering whether this means that companies now have the legal obligation to monitor the activities of even the most-established contractors.

“How much due diligence were [customers] expected to do on a large, publicly traded Swiss company?” said Alexandra Wrage, president of Trace International Inc., which advises companies on their compliance programs.

WSJ ARTICLE

Blog article headline by John Donovan

Shell, the Anglo-Dutch energy giant, is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria, these people said.

OCTOBER 15, 2010

By KARA SCANNELL And THOMAS CATAN

WASHINGTON—A big Swiss shipping and logistics company and Royal Dutch Shell PLC, one of its customers, are close to settling foreign-bribery charges stemming from a three-year U.S. investigation, said people familiar with the matter. It could be the first in a series of such settlements by major multinational companies.

Panalpina Group, which has 14,000 employees and branches in more than 80 countries, has been at the center of a sprawling probe into whether it paid officials in places including Nigeria, Saudi Arabia, Algeria and Kazakhstan to expedite services, such as clearing drilling rigs and other equipment through customs, according to people familiar with the matter and corporate disclosures.

The case could set new standards of vigilance for global companies that rely on contractors to operate in parts of the world where resources are plentiful but the rule of law is shaky, attorneys familiar with such cases said.

The investigation by the U.S. Justice Department and the Securities and Exchange Commission has extended to many of Panalpina’s customers, including Shell and oilfield-services companies Nabors Industries Ltd., Schlumberger Ltd., Transocean Ltd. and Noble Corp., according to securities filings by those companies.

Several of those companies also are expected to reach settlements with U.S. authorities in coming weeks or months, the people familiar with the matter said.

Schlumberger also is under investigation by the Justice Department in a separate bribery inquiry examining the company’s conduct in Yemen, The Wall Street Journal reported last week.

Spokesmen for the companies and agencies involved in the Panalpina probe either declined to comment or didn’t respond to requests for comment.

Panalpina is expected to pay around $85 million in fines to settle charges that it violated the U.S. Foreign Corrupt Practices Act, said people familiar with the matter.

Shell, the Anglo-Dutch energy giant, is expected to pay around $30 million in penalties to settle charges stemming from its use of Panalpina as an agent in Nigeria, these people said.

U.S. authorities are aggressively extending their jurisdiction to foreign companies that have shares trading on U.S. stock exchanges or have significant operations in the country.

The settlement talks aren’t over, the people familiar with them said, so the terms of any settlement could change. It isn’t clear if the companies will admit to any crimes.

Penalties collected by the U.S. for violations of the FCPA have soared in recent years, as tougher financial regulations have prompted companies to report violations to U.S. authorities in the hope of getting lenient treatment.

Some legal experts expect a flurry of new cases from a new provision in the Dodd-Frank financial-regulation law that allows company employees or others who bring instances of financial fraud, such as bribery, to the government’s attention to get 10% to 30% of any sum recovered.

In December 2008, German industrial giant Siemens AG was hit with a total of $1.6 billion in fines for foreign bribery, $800 million of which was assessed by the U.S., so a qualified whistleblower could theoretically have received a bounty of up to $240 million.

The Panalpina case could sharply expand companies’ responsibilities to supervise their agents under the FCPA, legal experts say.

Several recent FCPA cases have involved big companies whose agents, typically an individual or small, obscure contractor, were alleged to have paid bribes on behalf of their corporate clients. Ignorance is no defense under this law, so companies have been advised they must know exactly what their agents are doing in order to avoid liability.

However, in the latest crop of cases, the agent—Panalpina—is one of the largest and best-known companies in its field. Some legal experts question whether this means that companies now have the legal obligation to monitor the activities of even the most-established contractors.

“How much due diligence were [customers] expected to do on a large, publicly traded Swiss company?” said Alexandra Wrage, president of Trace International Inc., which advises companies on their compliance programs.

The Panalpina investigation has also cast a spotlight on the darker side of the global hunt for energy resources. As easily accessible resources dwindle, oil companies and their contractors must work in increasingly remote parts of the world, where the rule of law can be tenuous.

Nigeria, Kazakhstan and Turkmenistan, for example, all languish in the bottom third of the World Index of Corruption Perceptions, according to an annual ranking compiled by antigraft campaign group Transparency International.

The Panalpina probe, which began in 2007, prompted some oil-services companies to examine how their agents move critical equipment around the world, and some found other laws were potentially broken in the process.

An internal investigation by Global Santa Fe Corp., for example, found that it might have violated U.S. sanctions laws after a freight forwarder shipped goods to its rig in Turkmenistan through Iran, according to company filings.

The company, which has since merged with Transocean, said in a filing it had reported the possible infraction to the U.S. Treasury.

Panalpina has set aside around $133 million, according to securities filings, to resolve legal problems with the U.S. that have dogged it for several years and, it says, cost it business. On Sept. 30, it pleaded guilty to criminal price-fixing charges with five other freight forwarders and paid nearly $12 million to resolve the U.S. charges.

The foreign-bribery investigation has been by far the most damaging for the company, dragging its clients into the legal spotlight and resulting in a shareholder suit. Panalpina shuttered its operations in Nigeria and took a $42 million hit as a result, according to company filings.

Write to Kara Scannell at kara.scannell@wsj.com and Thomas Catan at thomas.catan@wsj.com

SOURCE ARTICLE

Among the companies currently under Justice Department review: Sun Microsystems Inc. and Royal Dutch Shell PLC…

The Ogoni Nine were hanged in 1995 after a show “trial” before a special military tribunal, which was based on fabricated charges and testimony from witnesses bribed by Shell.

Royal Dutch Shell, the Anglo-Dutch oil and gas giant was yesterday forced to warn shareholders about an ongoing investigation by US authorities over allegations that bribes were paid to Nigerian customs officials on behalf of the company.