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25 October
2016
Brazilian aerospace conglomerate
Embraer on Monday announced reaching a settlement with the US and Brazilian
authorities in the ongoing corruption investigation against it.
The terms of settlement include
payment of $206 million to the authorities, and an external and independent
monitorship for up to three years, to ensure full compliance with the
settlement terms, according to a statement from Embraer. The Total Investment
& Insurance Solutions
An internal inquiry done by Embraer
determined that the company is "responsible for misdeeds in four
transactions between 2007 and 2011 in Saudi Arabia, India, Mozambique and the
Dominican Republic", it said. The Total Investment & Insurance
Solutions
The transactions involved the sale
of 16 aircraft, it added.
"The company has also agreed to
payments in an aggregate amount of close to $206 million to the U.S. and
Brazilian authorities. The settlement further provides that as long as the
terms of the agreements are fully honoured, no charges will be brought against
the company," the statement said. The Total Investment & Insurance
Solutions
It added that the inquiry began in
2010 when Embraer was questioned by American authorities regarding potential
non-conformities related to certain commercial transactions abroad.
"The company then undertook a
wide internal investigation, led independently by external law firms. The Total Investment
& Insurance Solutions
"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 company said.
It added that as part of its
commitment to disclose material information to investors, the company has
reported the progress of the investigations to the financial markets and to the
regulatory agencies in Brazil and the United States.
"The company recently concluded
its internal investigation after six years of intensive effort. Hundreds of
thousands of documents were analysed and more than 100 interviews with
employees and third parties were conducted," it said. The Total Investment
& Insurance Solutions
The statement added that the company
"acknowledges responsibility for the conduct of its employees and agents
according to the facts ascertained in the investigation. Embraer deeply regrets
this conduct.
The Total Investment & Insurance Solutions
"The company has learned from
this experience and will be stronger as it moves forward and continues its
nearly 50 years of successful existence in which it has delivered more than
8,000 aircraft in over 90 countries." The Total Investment & Insurance
Solutions
The Brazilian Federal Prosecution
Service has been conducting its own investigations in parallel and is filing
lawsuits against certain individuals. Embraer said it is not party to these
lawsuits.
In India, CBI is probing the deal
for Embraer aircarft. The Total Investment & Insurance Solutions
In 2008, Embraer sold three EMB 145
AEW&C (Airborne Early Warning & Control) aircraft to the government of
India. The deal was worth $208 million.
The Defence Research & Development
Organisation (DRDO) had also sought explanation from Embraer over alleged
kickback payment in a deal for aircraft, injured during the UPA regime.
The issue was brought to the fore
after a report in a Brazilian newspaper that said investigations have been
opened by the government of the United States to establish whether Embraer paid
bribes in order to obtain contracts abroad. The Total Investment
& Insurance Solutions
According to the report, the company
has been under investigation by the United States Justice Department since 2010
when a contract with the Dominican Republic raised the Americans' suspicions.
Since then, the investigation has widened to examine business dealings with
eight more countries, including India and Saudi Arabia.The Total Investment
& Insurance Solutions
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