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Swiss commodities trader Gunvor has pleaded guilty and agreed to pay more than $660mn in fines and forfeited profits over what US prosecutors described as a years-long scheme to bribe officials in Ecuador to obtain oil contracts.
The Department of Justice has been investigating Gunvor’s business dealings in the South American country for four years as part of series of probes into the activities of the powerful commodities traders that move energy and natural resources around the world.
The company was charged in US federal court with conspiracy to violate the Foreign Corrupt Practices Act after its representatives funnelled millions of dollars to “high-level government officials” in the country between 2011 and 2020, prosecutors announced on Friday.
The bribes were routed through US banks by shell companies in Panama and the British Virgin Islands, they added, detailing one instance in which a Gunvor employee also directed an intermediary to use the funds to buy an 18-karat gold Patek Philippe watch for a high-ranking official of Petroecuador, the state-owned oil company.
“As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits,” said the DoJ’s Brent Wible.
In 2021 a former Gunvor employee pleaded guilty in a New York court to helping funnel more than $22mn to Ecuadorean officials in exchange for lucrative contracts with Petroecuador. That prosecution sparked a related investigation by Swiss authorities.
Gunvor agreed to pay a fine of SFr86.7mn ($98mn) after being found criminally liable for bribing foreign officials, Swiss prosecutors announced on Friday. That sum will be credited against the US fine if paid on time, DoJ prosecutors said.
Gunvor said the relevant conduct began in 2011 and that the company had since taken steps to improve its internal compliance functions.
“As a company Gunvor made mistakes at the time, for which we are sorry and that we have worked diligently to fix,” Gunvor’s co-founder and group chair Torbjörn Törnqvist said. “Corruption has no place in our company and will never be tolerated.”
It is not the first time Gunvor has faced bribery charges. In 2019, Swiss prosecutors found the company guilty of facilitating corruption in the Republic of Congo and Ivory Coast and forced to pay fines and compensation of $95mn.
At the time, Törnqvist said he never wanted to find himself in the same position again.
Under the terms of the US plea deal, Gunvor, which made record profits of $2.4bn in 2022, will pay a fine of $374mn and forfeit $287mn in earnings.
The penalty is one of the biggest ever levied in the US against a commodities trader for foreign corruption. Gunvor said the fine had been significantly reduced because of the company’s “extensive co-operation” and the investment and efforts it had made to strengthen its compliance programme.
Last week a former trader at rival Vitol was found guilty in New York of bribing officials in Ecuador and Mexico. Vitol agreed to pay $164mn to resolve similar probes by US and Brazilian authorities in 2020.
Gunvor was founded in 2000 by Törnqvist and Russian oligarch Gennady Timchenko. In 2014, shortly before being hit with sanctions by the US government for his alleged ties to Russian President Vladimir Putin, Timchenko sold his stake to Törnqvist, who now controls almost 90 per cent of the company.
Alongside rivals Trafigura, Vitol and Mercuria, Gunvor remains one of the world’s largest independent oil traders. It has also diversified in recent years into trading gas, power and other commodities, and trades some $150bn worth of commodities a year.
Additional reporting by Sam Jones
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