In the Matter of Eni S.p.A. (2020)

• Case Name
• In the Matter of Eni S.p.A. (2020)

• Date Filed
• 04/17/2020

• Enforcement Agency
• SEC

• Foreign Official
• Unnamed Algerian government officials; the Algerian Energy Minister.

• Date of Conduct
• 2006 to 2010

• Nature of Business
• Eni S.p.A. is a global oil and gas company headquartered in Rome, Italy.  Eni’s American Depositary Receipts are listed on the New York Stock Exchange and registered with the SEC pursuant to Section 12(b) of the Exchange Act.  Saipem S.p.A. is a subsidiary controlled by Eni, and Eni held a 43% ownership interest in Saipem during the relevant time period.

• Influence to be Obtained
• According to the SEC, Eni violated the FCPA’s internal accounting controls and recordkeeping provisions because of Saipem’s actions in Algeria.  Saipem’s management allegedly met with the Algerian Energy Minister in 2006, who told them that to obtain business in Algeria, Saipem would need to hire an intermediary and pay invoices for services that would not be rendered.  Saipem then allegedly entered into four sham contracts with the intermediary to obtain contracts with Algeria’s state owned oil company, Sonatrach.  Saipem allegedly characterized the payments to the intermediary as “brokerage fees” in its books and records, which were then consolidated into Eni’s books.  According to the SEC, Saipem paid approximately €198 million to the intermediary, of which a portion was directed to Algerian government officials, and in return the company was awarded at least seven contracts with Sonatrach. 
  
  As Eni consolidated Saipem’s financial statements into its own, the subsidiary’s transactions, and the fees paid to the intermediary, led Eni to allegedly maintain inaccurate books and records.  According to the SEC, Eni received approximately $19,750,000 of unwarranted tax benefit as a result of Saipem misclassifying its bribes as legitimate business expenses—an amount derived from Saipem’s alleged $57 million in tax benefits and Eni’s 43% ownership stake in its subsidiary.   
  
  Notably, Eni had previously settled with the SEC in 2010 to resolve comparable allegations that it violated the books and records and internal accounting controls of the FCPA, that time with respect to its efforts to construct a natural gas facility in Nigeria.

• Enforcement
• In September 2018, an Italian court found Saipem and related individuals guilty for making payments from Saipem to Algerian officials—while Eni was acquitted during the same proceedings of related charges.  A court of appeals in Milan affirmed Eni’s acquittal.
  
  On April 17, 2020, the SEC settled its enforcement action against Eni, noting both the company’s repeat-offender status and its positive remedial efforts and cooperation with the SEC.  The SEC issued a cease-and-desist and ordered Eni to pay $19,750,000 in disgorgement as well as $4,750,000 in prejudgment interest, for a total fine of $24,500,000.  

• Amount of the Value
• Not stated.

• Amount of Business Related to Payment
• Not stated.

• Intermediary
• Third party intermediary.

• Citizenship of Parent Entity
• Italy

• Total Sanction
• $ 24,500,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 24,500,000

Eni S.p.A.

• Citation
• In the Matter of Eni S.p.A., Admin. Proc. File No. 3-19751 (April 17, 2020).

• Date Filed
• 04/17/2020

• Filed Under Seal
• No

• Date Case Was Unsealed
• 06/25/2020
  

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None.

• Disposition
• Cease-and-Desist Order, Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Italy

• Individual Sanction
• $24,500,000