Enforcement Action

 

Docket or Case Number:    N/A

Court:    N/A

Initiation Date:    11/04/2010  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Stacey K. Luck, Trial Attorney, Fraud Section, Criminal Division
  • Denis J. McInerney, Chief, Fraud Section, Criminal Division

Assisting Agencies:    U.S. Securities and Exchange Commission , Federal Bureau of Investigation

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Noble Corporation ("Noble") is a leading offshore drilling contractor for the oil and gas industry. In 1996, Noble moved from the NASDAQ to the NYSE, and began trading under the symbol NE. Noble performs, through its subsidiaries, contract drilling services with a fleet of 69 offshore drilling units worldwide.

Under Nigerian law, customs duties generally were required to be paid for goods imported into Nigeria, such as rigs and vessels imported into Nigerian waters. In order to avoid these fees, companies could import rigs and other items on a temporary basis pursuant to which no customs duties would be assessed. Items imported under the temporary import process (TIP) could not remain in Nigeria longer than the period allowed for by the TIP and/or TIP extensions. Upon the expiration of the TIP (and related TIP extensions), the owner could either choose to permanently import the rig (known as "nationalizing") or export the rig and re-import it and obtain a new initial TIP. Throughout Noble's operations in Nigeria, Noble's Nigerian subsidiary ("Noble-Nigeria") chose to temporarily import rigs into Nigeria. Noble-Nigeria employed a Nigerian customs agent to apply for and secure its TIPs and TIP extensions.

Between January 2003 and May 2007, Noble-Nigeria paid the customs agent at least $74,000 in "special handling charges". Executives at Noble and Noble-Nigeria knew that some or all of the payments would be given to officials at the Nigeria Customs Service (NCS) in order to avoid the time, cost, and risks associated with exporting rigs and re-importing them into Nigerian waters after the period allowed for by the TIP had expired. The agent invoiced Noble-Nigera for the cost of the bribes, and Noble-Nigeria then reimbursed the agent. The total benefit received by Noble-Nigeria for these payments in avoided costs, duties, and penalties was approximately $2,973,000.

On Novemeber 4, 2010, Noble Corp. entered into a non-prosecution agreement with the DOJ pursuant to which the DOJ agreed not to bring charges
against the company. Under the non-prosecution agreement, Noble corp. agreed to pay a $2,590,000 monetary penalty.

In a separate but related action with the SEC, Noble Corp. consented to the entry of a final judgment permanently enjoining it from violating the anti-bribery, books and records, and internal controls provisions of the FCPA without admitting or denying the SEC's allegations. In that action, Noble Corp. was ordered to disgorge $4,294,933, and pay prejudgment interest of $1,282,065.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    $2,590,000 / $74,000 = 3500.00 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $2,590,000 / $2,973,000 = 87.12 %

Number of Related Enforcement Actions (Including This Enforcement Action):    4

Country(ies) involved:    Nigeria

Total $ Bribery Payments:    $79,026

Total $ Revenue Generated from Bribery:    N/A

Total $ Profit Earned or Expenses Avoided from Bribery:    $4,294,933

Total $ Monetary Sanctions:    $8,201,998

Sanction to Bribe Ratio:    $8,201,998 / $79,026 = (10378.90 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $8,201,998 / $4,294,933 = (190.97 %)

Name:    Noble Corporation

Place of Incorporation:    Cayman Islands

HQ Country(ies):    United States

Entity Type:    Public Company

FCPA Claims:    Anti-Bribery, Primary, Issuer (15 U.S.C. § 78dd-1) ; Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A))

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer

Period of Bribery:   2003 - 2007

Total Bribery Payments:    $74,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $2,973,000

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Officials ; Nigerian Customs Service ("NCS")

Defendant-Related Entities Involved in the Misconduct:    Noble Drilling (Nigeria) Ltd. - Subsidiary

Third-Party Intermediary:   

  • Nigeria Customs Agent , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Evade/reduce taxes or penalties, Facilitate import/export/delivery of products

TRANSACTION OVERVIEW
Payments to its customs agents that would be passed down to Nigerian government officials

Period of Bribery:   2003 – 2007

Total Bribery Payments:    $74,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $2,973,000

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials ; Nigerian Customs Service ("NCS");

Defendant-Related Entities Involved in the Misconduct:    Noble Drilling (Nigeria) Ltd. - Subsidiary

Third Party Intermediary:    Nigeria Customs Agent - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Evade/reduce taxes or penalties, Facilitate import/export/delivery of products

Misconduct by Subsidiary?  Yes


Parent(s):   Noble Corporation

Subsidiary:  Noble Drilling (Nigeria) Ltd.

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

Re: Noble Corporation

  • Effective anti-corruption compliance policies, procedures, or program
  • Effective internal controls or auditing

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Noble Corporation    

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Noble Corporation    

Total Monetary Sanctions for the Action:    $2,590,000

Case Status:    Resolved


Disposition:    Non-Prosecution Agreement

Date of Disposition:    11/04/2010

Noble Corporation

—  Total Monetary Sanctions for Defendant:    $2,590,000

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Self-reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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