The Swiss Federal Criminal Court delivered a landmark ruling on Friday, convicting global commodities trading giant Trafigura and a former senior executive of corruption. This unprecedented case centered on illicit payments made to an Angolan official in exchange for lucrative oil contracts.
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Trafigura was fined 3 million Swiss francs ($3.3 million) and ordered to pay $145.6 million in compensation. Former Chief Operating Officer Mike Wainwright received a 32-month prison sentence, 12 of which must be served. This verdict marks a significant development in the global fight against corruption within the commodities sector.
Organizational Failures and Indirect Profiteering
Presiding Judge Stephan Zenger highlighted “organizational failures” within Trafigura, stating that a company of its scale should have implemented more rigorous oversight of payments to intermediaries. He asserted that Wainwright indirectly benefited from the bribery scheme. Wainwright’s lawyer confirmed an intention to appeal the verdict, automatically suspending the prison sentence pending the appeal’s outcome.
A Precedent for Corporate Accountability
This case represents the first instance in Switzerland where a company has been charged at the highest court with corrupting a foreign official. Globally, it’s a rare occurrence for a former top executive of a major trading firm to face such charges. The Office of the Attorney General of Switzerland hailed the verdict as a “strong signal” of the country’s commitment to combating transnational corruption, particularly within the commodities industry.
Details of the Bribery Scheme
Prosecutors alleged that Trafigura and associated parties funneled over $5 million in bribes through a network of intermediaries to secure oil deals with the Angolan official between 2009 and 2011. While substantial, the total penalty of nearly $156 million represents a small fraction of Trafigura’s recent earnings, which have surged due to rising energy prices.
Trafigura’s Response and Wainwright’s Denial
Trafigura, headquartered in Singapore with significant operations in Geneva, expressed disappointment with the verdict. The company emphasized its investment in strengthening its compliance program over several years. Jean-Francois Ducrest, Trafigura’s lawyer, acknowledged the verdict as the “first step in a long judicial process.”
Wainwright, a 51-year-old British national and former racing driver, vehemently denied all allegations. His lawyer, Daniel Kinzer, criticized the verdict as lacking foundation, claiming the court relied on assumptions and disregarded crucial evidence demonstrating Wainwright’s non-involvement in the bribery scheme.
Additional Convictions and Supporting Evidence
Two other defendants, including the Angolan official, were also convicted. They received sentences of 36 months and 24 months respectively, with the former partially suspended and the latter fully suspended. Their identities remain undisclosed due to Swiss privacy regulations. Both denied the charges and were absent from the verdict announcement.
The trial, held in Bellinzona, Switzerland, featured extensive documentary evidence, including memos, emails, and messages. Notably, some evidence pertained to a former Trafigura employee allegedly nicknamed “Mr. Non-Compliant” by the late Trafigura founder Claude Dauphin for engaging in prohibited activities. Dauphin’s family disputes the characterization and the significance of the evidence related to the nickname.
Conclusion: A Watershed Moment for Commodities Trading
The Trafigura conviction signifies a watershed moment for the commodities trading industry. It underscores the increasing scrutiny of corruption within the sector and the potential for significant legal repercussions for companies and individuals involved in illicit practices. The outcome of this case and subsequent appeals will likely have far-reaching implications for corporate governance and compliance standards within the global commodities market.
