- General
- March 1, 2024
- 4 minutes read
Energy Trader Gunvor Fined $660M For Foreign Bribery
Gunvor Group, a Swiss commodities trading giant, has pled guilty to foreign bribery charges filed by the U.S. Justice Department.…
Gunvor Group, a Swiss commodities trading giant, has pled guilty to foreign bribery charges filed by the U.S. Justice Department. The company will pay $661mn in fines under the plea agreement: a $374mn criminal penalty and $287mn forfeiture.
- Gunvor pled guilty to violating the U.S. Foreign Corrupt Practices Act. Prosecutors said the bribe payments were routed through U.S. banks using shell companies in Panama and the British Virgin Islands.
- Gunvor was previously fined $98mn by Swiss authorities over similar bribery charges.
Gunvor allegedly paid tens of millions of dollars in bribes to government officials to get lucrative contracts from Petroecuador, Ecuador’s state-owned oil company. Prosecutors said Gunvor earned $384mn in profits from the corruptly obtained oil procurement contracts.
Gunvor admitted paying $97mn to oil trading intermediaries, knowing some of it was destined for bribes to Ecuadorian government officials. Raymond Kohut, a former Gunvor employee, and two Gunvor consultants were criminally indicted for directing the bribes. They all pled guilty to conspiracy to commit money laundering.
Nilsen Arias, a Petroecuador executive, received $15mn+ in bribes and was indicted by the U.S. government. He also pled guilty to conspiracy to commit money laundering.
In a related case, the U.S. Justice Department recently convicted Javier Aguilar, a Houston-based oil executive, for paying $1mn in bribes to Ecuadorian government officials. Aguilar worked for Vitol, one of the “big five” commodities traders. The other four are Gunvor, Trafigura, Glencore, and Mercuria.
- Geneva-based Gunvor is the world’s fourth-largest oil trader after Glencore, Vitol, and Trafigura. It was founded in 2000 by Swedish businessman Torbjörn Törnqvist and Gennady Timchenko, a Russian oil tycoon.
- Timchenko sold his Gunvor shareholdings to Törnqvist in 2014, shortly before the U.S. government sanctioned him over Russia’s Crimea invasion. Russian President Vladimir Putin “has investments in Gunvor and may have access to Gunvor funds,” the U.S. Treasury claimed in the sanctions announcement against Timchenko.
Foreign bribery charges are not unheard of in the global commodities trading sector. Last December, Trafigura disclosed bribery investigations from U.S., Brazilian, and Swiss authorities and set aside $127mn for expected fines. Vitol and Glencore have previously settled bribery cases with the U.S. Justice Department, paying $135mn and $1.1bn, respectively, in 2020 and 2023.
Gunvor has benefitted from surging oil prices since Russia’s 2022 Ukraine invasion disrupted global supply chains and sent countries outbidding each other to secure critical oil supplies. The Swiss-based company posted a record $2.4bn net profit in 2022.
