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Frank's International will pay $8 million in an FCPA case

Frank's International, a Dutch oilfield services supplier, agreed to pay approximately $8 million in a settlement with the Securities and Exchange Commission (SEC) for allegedly paying bribes to influence oil drilling contracts in Angola.

Frank's International will pay $8 million in an FCPA case

According to the SEC, Frank's, now known as Expro Group Holdings N.V., violated the Foreign Corrupt Practises Act (FCPA) by paying commissions to an Angolan sales agent from 2008 to 2014. Employees at the company were aware that the agent was likely to use the monies to bribe Angolan officials in order to gain contracts for Frank's, according to an administrative procedure filed by the agency on Wednesday.

The company agreed to pay disgorgement plus prejudgment interest totaling $4,998,721, a $3 million civil penalty, and to cease and desist from future violations without admitting or denying the SEC's allegations that its actions violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA and SEC regulations.

In 2016, Frank's self-reported the suspected FCPA violation to the SEC, launched an internal inquiry, and cooperated with the agency's probe.

The specifics: According to the SEC ruling, Frank's attempted to persuade Angola's state-owned oil firm, Sonangol, to allow Frank's equipment to be acquired by international oil companies for the drilling of deep water wells off Angola's coast. The oil companies had previously purchased Frank's products, but Angolan officials instructed them to purchase a competitor's products instead because that competition had "purportedly made a superior financial investment" in Angola, according to the SEC.

According to the SEC, Frank's recruited the Angolan agent to represent Frank's interests without undertaking due diligence, without a contract, and despite his lack of technical competence to support a conspiracy to influence Angolan officials. According to the FBI, the agent served as a "bribe conduit" to Angolan officials and collected around $5.5 million from Frank's between 2008 and 2014.

The payments to the agent were classified as "business expenses-entertainment and meals," according to the SEC. According to the decision, the corporation received at least almost $4.2 million in net profits from its sales to multinational oil companies where Sonangol was the ultimate customer.

Compliance issues: According to the ruling, Frank's "lacked adequate internal accounting controls related to the retention and payment of agents who interacted with foreign government officials on behalf of the company."

Frank's disciplined the workers involved, terminated its relationship with the Angola agent, and tightened its internal accounting systems as part of its remediation of the claimed flaws. Following Frank's merger with Expro Group in 2021, Expro improved its internal controls environment and compliance programme, according to the SEC.

Expro did not reply immediately to a request for comment.


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