In the Matter of B.J. Services Co., SEC Administrative Proceeding File No. 3-11427 (March 10, 2004)
This is an early example of leniency by the SEC for voluntary disclosure.
Subsequent to this proceeding, the company revealed FCPA issues related to its business in the Asia Pacific region. That investigation is ongoing.
Energy (Non-Utility)-Oil & Gas-Exploration/Production
1998; 1999; 2000; 2001; 2002
Argentine customs officials.
BJ Services settled this action with the SEC without admitting or denying the following facts alleged in the SEC's cease and desist order.
BJ Services violated the FCPA when a wholly-owned subsidiary made payments to customs officials in Argentina in exchange for overlooking importation violations. BJ Services also violated the FCPA because the same subsidiary improperly recorded the expenses in its and BJ Services' books and records, and because BJ Services had not established sufficient internal controls to ensure FCPA compliance.
BJ Services is a Houston, TX, based company providing oil field services, products, and equipment to petroleum producers worldwide. BJ Services Argentina ("BJSA") is a wholly-owned subsidiary of BJ Services. In January 2001, an Argetine customs official told BJSA's comptroller that he had seized equipment BJSA had improperly imported. The official offered to release the equipment in exchange for 75,000 pesos (equal to $75,000 because the Argentine peso was pegged to the U.S. dollar). The official threatened to deport the equipment unless BJSA paid him, which would result in BJSA forfeiting $71,575 in already-paid importation taxes, paying up to $122,420 in penalties, and repaying additional importation taxes when properly re-importing the equipment. BJSA's Country Manager told the comptroller to pay the customs official, but to negotiate a lower price. Ultimately the official released the equipment for 65,000 pesos, which the comptroller improperly recorded as a payment to a BJSA subsidiary in Panama.
In September 2001, BJSA's former Treasury and Purchasing managing authorized payments of $7,000 to an Argentinean customs in exchange for the official overlooking a BJSA customs violation. The customs official covered up BJSA's customs violation and BJSA improperly recorded the payments as import duties.
In October 2000, the same Treasury and Purchasing Manager approved a $10,994 payment to an official working for Argentina's Secretary of Industry and Commerce responsible for approving the importation of equipment by BJSA into Argentina. BJSA made the payment to expedite the approval process, recorded the payment as an importation cost with an offsetting charge to the Panamanian subsidiary, and improperly supported the charge with an invoice from the customs agent.
In June 2002, BJ Services' senior management discovered other FCPA violations. An ensuing investigation unearthed an aggregate of $151,406 in payments between January 1998 to April 2002. Most of the payments were to the third-party customs agents for unspecified customs charges.
Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)