Embraer strikes $206 million deal to settle bribery investigation

Brazil's Embraer aircraft manufacture has struck a $206 million legal settlement with US and Brazilian authorities to resolve an international corruption investigation into wrongdoing by four of the company's agents in the sale of aircraft to other countries.

The information was released by the company itself, Brazil's Federal Prosecution Service (MPF), and the Brazilian Securities Commission (CVM) on Monday (24 Oct).

The deal was struck with the US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) as well as the MPF and CVM.

According to Embraer, the investigators found that the company was accountable for “misdeeds in four transactions between 2007 and 2011 in Saudi Arabia, India, Mozambique and the Dominican Republic. Those transactions involved the sale of 16 aircraft.”

In a statement published on their website, Embraer said the investigation began in 2010, when US authorities questioned the company over potential compliance issues in certain business transactions abroad.

“The company then undertook a wide internal investigation, led independently by external law firms. From the beginning, Embraer took the matter seriously and fully cooperated with the investigation. As events unfolded, the company voluntarily expanded its scope and shared the results with the appropriate authorities,” the press office said.

The Federal Prosecution Service, in turn, pointed out the settlement deal was in reference to transnational corruption, money laundering, and false books and records in connection with the sale of its manufactured aircraft to state agencies and corporations from the mentioned countries.

Out of the total amount of the deal, the Brazilian authorities received $20 million, of which $18.5 million was earmarked for the Ministry of Justice's Diffuse Rights Defence Fund (FDDD)—which, among others, covers the right to compensation for antitrust violations. The other $1.5 million was paid to the CVM for unjust illegal enrichment and damages to capital markets. “The amount was agreed as a consideration of the overall net profit margin, calculated according to criteria used in Brazil and several other countries, from the combined four contracts covered by the settlement,” the MPF said.

Translated by Mayra Borges