DOJ Reduces Odebrecht Penalty Based on Inability to Pay

DOJ FCPA Enforcement Action Odebrecht Braskem SA

On April 11, the DOJ filed a memorandum in its case against Odebrecht S.A., requesting that the Court approve a lower sentence than originally proposed based on Odebrecht’s inability to pay. On December 21, Brazilian construction company Odebrecht and its petrochemical affiliate, Braskem S.A., reached a $4.5 billion combined global settlement with U.S., Brazilian, and Swiss authorities to resolve FCPA allegations, in which both companies agreed to plead guilty in the U.S. to conspiracy to violate the FCPA. As part of that agreement, the U.S. and Brazilian authorities agreed to conduct an independent analysis to confirm the accuracy of Odebrecht’s representation that it had an inability to pay a penalty in excess of $2.6 billion. The memorandum set forth the DOJ’s determination that Odebrecht lacks the ability to pay a criminal penalty in excess of $2.6 billion and included adjustments for the requested penalty to match that ability. In particular, the portion of the penalty paid to the United States would be lowered from approximately $117 million to approximately $93 million. The sentencing hearing is scheduled for April 17.

Prior Scorecard coverage of the Odebrecht settlement can be found here.