Commodities trader Gunvor held criminally liable for corruption

Gunvor was found to have taken no organisational measures to prevent corruption in its business activities Keystone

The Geneva-based trading company Gunvor has been ordered to pay almost CHF94 million ($94.6 million), including a fine of CHF4 million over bribery in Africa. 

The commodities trader failed to prevent its employees and agents from bribing public officials between 2008 and 2011 in order to gain access to the petroleum markets in the Republic of Congo and Ivory Coast, the Office of the Attorney General of Switzerland (OAG)  said in a statementExternal link on Thursday. 

The compensation of almost CHF90 million corresponds to the total profit that Gunvor made at the time conducting business in the two African countries. 

“The investigation revealed that during the period under scrutiny, Gunvor had taken no organisational measures to prevent corruption in its business activities: the company did not have a code of conduct to give a clear signal and guidance to its employees on their activities, nor did it have a compliance programme,” it said. 

“In addition, it did not have an internal audit procedure and had not appointed a staff member to take charge of identifying, analysing or reducing the risk of corruption. Moreover, no internal guidelines were in place and no training was offered to raise employee awareness and reduce the risks associated with corruption. It therefore seems that Gunvor accepted that a risk of corruption was inherent in the company’s commercial activities, at least in the relevant markets.” 

Increased risk from using agents 

Furthermore, the company did not attempt to manage the risk of corruption associated with using agents to obtain petroleum shipments, for which commissions of several tens of millions of US dollars were paid between 2009 and 2012. 

“In particular, Gunvor had no formal selection process for any of the agents that it used and it did not carry out any checks on their activities, despite the fact that Swiss and international anti-corruption standards (OECD, ICC, SECO) specifically highlight the increased risk of corruption associated with agents’ activities,” the statement said. 

It was also found that at the time of the events, warning signs had been ignored and other irregularities had occurred, including authorisation being given for a substantial number of payments to third-party offshore companies unrelated to oil activities and the backdating of supporting letters to banks. 

Other individuals, including a former employee of the company and certain financial intermediaries, are currently under investigation, notably on suspicion of bribing foreign public officials, money laundering and criminal mismanagement. As always, the presumption of innocence applies to all suspects, the OAG said. 

In a statement on Thursday Gunvor admitted guilt with respect to having had organisational shortcomings, but it pointed out that the OAG had acknowledged efforts made by the company to enhance its compliance proceduresExternal link to achieve international standards since 2012.

Anti-corruption rules

The Paris-based Organisation for Economic Co-operation DevelopmentExternal link and the International Chamber of CommerceExternal link outline anti-corruption rules for companies, as does Switzerland’s State Secretariat for Economic Affairs.External link 

The standards recommend that properly documented due diligence be carried out, that the selection process is regulated, that warning signs are defined to detect potentially illegal activities and that regular checks are made, especially when agents’ invoices are paid.