French Oil Giant Total Found Guilty of Corruption in 1997 Iran Gas Deal

French Oil Giant Total Found Guilty of Corruption in 1997 Iran Gas Deal

A French court on Friday fined oil giant Total EUR 500,000 for corruption after finding it guilty of paying bribes while bidding for a huge gas contract in Iran in 1997.

 The French company was accused of paying USD 30 million in bribes in return for help in securing the rights to the South Pars natural gas field in the Persian Gulf, the world's largest.

The Paris criminal court found it guilty of "corruption of a foreign public agent" for payments made to former president Akbar Hashemi Rafsanjani's son Mehdi Hashemi, a senior energy official at the time, among others.

But it dismissed prosecutors' call for it to seize EUR 250 million in Total assets—investigators' estimate of the value of the proceeds of the corruption.

The fine represents a fraction of the EUR 398 million that Total paid in the US in 2013 to settle similar charges arising out of the joint French-US investigation. 

It also represents a drop in the ocean of Total's net profits in 2017 of USD 8.6 billion.

'Business Development'

By admitting responsibility in the US, Total avoided the embarrassment of a trial for violations of the Foreign Corrupt Practices Act (FCPA), which seeks to stop bribery in foreign countries by companies with a significant US presence.

The company cited its deal with US authorities in refusing to answer questions about its Iran dealings at its Paris trial.

The French part of the probe, which was launched back in 2006, initially covered both the 1997 South Pars deal, worth USD 2 billion, and the 1995 concession for the Sirri A and E oil fields.

Total was accused of paying a total of $60 million in bribes between 1995 and 2004 to obtain the concessions. 

The US Justice Department said that Total attempted to pass off the payments as "business development expenses.”

The company argued that its behavior was "completely legal under French law.”

In the end the multinational was tried only over the USD 30 million it paid in connection with the South Pars field after 2000, when a new French law on "corruption of foreign public officials" came into effect.

Total's late CEO Christophe de Margerie, who was head of Middle East exploration at the time of the payments, was also being investigated before his sudden death in a plane crash in Moscow in 2014.

In a statement Friday, Total's current CEO Patrick Pouyanne said anyone who knew de Margerie "knows that he would never be involved in any type of corruption.”

A Iranian businessman Bijan Dadfar and an oil industry consultant, Abbas Yazdi, were also named as suspects in the case. 

Dadfar has died since the probe began while Yazdi, who is also believed to be dead, was sentenced to four years imprisonment in the absence of any death certificate.

The ruling comes four months after Total announced that it was pulling out of the South Pars project for fear of being caught out by US sanctions after US President Donald Trump pulled out of an international nuclear deal with Tehran.

Photo Credit: Total

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