On December 21, Reuters reported that the Criminal Court in Paris announced that it had fined Total S.A. €500,000, in a criminal case in which Total was charged with paying $30 million to obtain access to Iranian oil fields between 1997 and 2005. French prosecutors reportedly had sought €750,000, as well as confiscation of €250 million — equivalent to the potential benefit that Total received from the bribe – from Total.
The charges in this case dated back to 2013, when the United States Department of Justice announced that Total was the subject of the first coordinated action by French and U.S. law enforcement in a major foreign bribery case. In brief, according to the Justice Department, in 1995 Total sought to re-enter the Iranian oil and gas market by attempting to obtain a contract with the National Iranian Oil Company to develop the Sirri A and E oil and gas fields. Eventually, between 1995 and 2004, at the direction of an Iranian official later identified as Medhi Hashemi Rafsanjani (the son of Iran’s former president Akbar Hashemi Rafsanjani), Total corruptly made approximately $60 million in bribe payments for the purpose of inducing the Iranian official to use his influence in connection with Total’s efforts to obtain and retain lucrative oil rights in the Sirri A and E and South Pars oil and gas fields.
In 2013, in coordinated enforcement actions, the Justice Department concluded a deferred prosecution agreement with Total that involved Total’s payment of a $245.2 million monetary penalty to resolve Foreign Corrupt Practices Act charges, the United States Securities and Exchange Commission entered a cease-and-desist order against Total that required Total to pay an additional $153 million in disgorgement and prejudgment interest, and French authorities stated “that they had requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the Criminal Court for violations of French law, including France’s foreign bribery law.”
Since then, Total’s Chief Executive Officer (CEO), Christophe de Margerie, died in an airplane crash, and Total’s current Chairman and CEO Patrick Pouyanne recently stated that none of the other individuals under investigation were still living. Total had contested the prosecution on the basis “that the payments had been necessary to ensure the success of the French bid” and “that, since the bribes were paid outside France, the case had no place before a French court.”
After the fine, which one media report characterized as “symbolic,” Pouyanne stated that Total would not pursue the matter further, “given the specific circumstances of this case, which has been already judged in the U.S. and in which none of the individuals can defend themselves.” He added that anyone who knew de Margerie “knows that he would never be involved in any type of corruption.”
Note: The French Criminal Court’s fine is indeed symbolic, in two unfortunate respects. First, while the court undoubtedly was well aware that Total had already paid nearly $400 million to U.S. authorities to resolve related charges, those payments pertained specifically to violations of United States criminal and civil law. By levying a fine equivalent to 0.0038 percent of Total’s alleged $150 million in profits from the scheme, or 0.000054 percent of Total’s 2017 adjusted net income of $10.6 billion , the court conveyed the strong impression that it regarded Total’s violation of French criminal law as unworthy of anything more than a token sanction.
Second, the court’s token fine also could be construed as a tacit endorsement of Total’s assertion that foreign bribery was necessary to ensure the success of its bid. Such an argument is contrary to the letter and the spirit of anti-corruption conventions that France has ratified as well as various national anti-corruption laws (including France’s 2016 Sapin II legislation), and deserves to be given short shrift in future French prosecutions under Sapin II.