Embraer corruption case resolved with US and Brazilian authorities

It was announced this week that the Brazilian plane manufacturer, Embraer, has reached an agreement for the resolution of investigations with the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Brazilian (Ministério Público Federal (MPF) and the Comissão de Valores Mobiliários (CVM).
As part of the settlement, Embraer has agreed to up to three years of external independent monitoring to ensure settlement terms are fully complied with. Embraer has also agreed to make payments totalling a combined and approximate US$206 million to Brazilian and U.S. authorities.
The enquiry began in 2010 when a number of nonconformities relating to overseas transactions were identified by the U.S. authorities and Embraer was questioned about them. An external law firm then set about a wide internal investigation.
It should be pointed out that at all times Embraer cooperated fully with all authorities and reported all stages of the investigation not only to U.S. and Brazilian regulatory agencies, but also the financial markets.
After 6-years of investigation, it was revealed that Embraer, according to a press release on the company’s website, “was responsible 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. 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 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.”
In addition, a separate investigation was carried out by the Brazilian Federal Prosecution Service and it is understood that several lawsuits will be filed against a number of individuals. However, Embraer will not be party to these lawsuits.