Embraer to pay $205 m to settle graft charges

New York/New Delhi, October 24

Brazilian aircraft manufacturer Embraer has agreed to pay over $205 million to resolve charges of corruption and making bribe payments to officials in foreign nations.

The corruption charges in India relate to payment of $5.76 million to an agent in kickbacks for clinching a deal for the sale of three specialised military aircraft for the IAF’s Airborne Early Warning and Control System.

The CBI has already registered an FIR in the case.

Embraer entered into the resolution to resolve criminal charges and agreed to pay a penalty of more than $107 million in connection with schemes involving the bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in falsely recorded payments in India via a sham agency agreement, the US Justice Department said.

Apart from the $107 million penalty to the Justice Department as part of a deferred prosecution agreement, Embraer must also pay more than $98 million in disgorgement and interest to the Securities and Exchange Commission (SEC).

According to the company’s admissions, Embraer executives and employees paid bribes to government officials and falsified books and records in connection with aircraft sales to foreign governments and state-owned entities in multiple countries.

The SEC’s complaint alleges that Embraer made more than $83 million in profits as a result of bribe payments from its US-based subsidiary through third-party agents to foreign government officials in the Dominican Republic, Saudi Arabia, and Mozambique.

Embraer allegedly created false books and records to conceal the illicit payments.

According to the SEC’s complaint, $3.52 million in bribes were paid to an official in the Dominican Republic’s air force to secure a military aircraft contract in that country and $1.65 million in bribes were routed to an official in Saudi Arabia to win business there. — PTI