Noble Corporation: The Rigs That Left Nigeria Only on Paper

In the Noble Corporation FCPA case, Noble agreed to a $5,576,998 civil settlement over Securities and Exchange Commission allegations of customs bribery under the Foreign Corrupt Practices Act. The alleged shortcut let drilling rigs in Nigeria keep working while documents said they had left the country and returned. Someone who knew where the rigs actually were could see what the stamped paperwork concealed.

Noble supplied offshore drilling services and equipment to oil companies. According to the commission’s complaint against the company, its wholly owned subsidiary, Noble Drilling (Nigeria) Ltd., operated seven rigs offshore Nigeria between January 2003 and May 2007. Keeping those rigs at work meant keeping their import permits in order.

Nigerian Temporary Import Permits Put a Price on Staying

The temporary import permits described in the SEC’s action against the executives allowed a rig to remain in Nigeria for one year. The Nigeria Customs Service could grant up to three extensions of six months each. After that, the rig had to leave and return under a new temporary permit, or the company had to import it permanently and pay substantial duties.

For a drilling contractor, that choice reached directly into an operating contract. In its complaint against Noble, the commission alleged that physically towing a rig out and bringing it back meant moving costs, lost operating profits and possible costs from breaching the drilling contract. A fresh permit could preserve the work already underway. That commercial pressure explains why the customs agent’s bill mattered well beyond the logistics office.

The Rigs Left on Paper

The Securities and Exchange Commission alleged that Noble’s Nigerian subsidiary authorized its customs agent to submit false documents showing exports and re-imports that never occurred. The subsidiary obtained eight temporary import permits through this paper process during the conduct period. The complaint described the contradiction plainly:

The agent’s invoices described at least $79,026 in payments associated with those renewals as a “special handling charge.” The complaint alleged that certain Noble and subsidiary personnel understood that description to mean payments to Nigerian officials to influence the permit decisions. It also alleged that electronic communications from offices in Texas authorized the charges and directed payment in Nigeria.

The commission alleged at least $4,294,933 in profits and avoided costs from the paper process. The civil settlement exceeded that alleged gain, but the agent’s charges had been a small cost of keeping the rigs at work. We see the absurdity in a customs system accepting proof of a voyage while the rig carried on drilling: the paperwork traveled, and the business kept earning.

What Noble Admitted in Its Non-Prosecution Agreement

Noble’s own admissions came through its criminal non-prosecution agreement, described in the Justice Department’s November 4, 2010 announcement. The company admitted paying approximately $74,000 to a Nigerian freight-forwarding agent and acknowledged that certain employees knew some payments would pass to customs officials as bribes. It also admitted falsely recording the bribe payments as legitimate business expenses.

What the SEC Alleged About the Executives

The Securities and Exchange Commission brought separate civil actions against three Noble executives in February 2012. Its account of those charges described alleged participation in obtaining about 11 illicit permits and 29 extensions.

The commission alleged that the former chief executive approved bribe payments and concealed them from the audit committee and auditors. It alleged that the Nigerian subsidiary’s director and division manager prepared false documents, sought approval for payments, and processed and paid the bribes through the customs agent. The decisions allegedly crossed the boundary between local operations and senior management.

The commission separately alleged that a former controller and head of internal audit helped approve the payments and allowed them to be booked as legitimate operating expenses. That executive agreed to settle the civil charges and pay a $35,000 penalty. His alleged role matters to an insider because the person responsible for checking the accounts was also accused of helping the payments pass through them.

How the Facilitating-Payment Account Allegedly Hid the Decision

Noble’s books and internal controls were central to the Securities and Exchange Commission’s action against the company. The complaint alleged that payments believed to be going to officials entered a “facilitating payment” account or other operating-expense accounts, then flowed into Noble’s consolidated income statements. It alleged that the payments did not qualify for that treatment.

An account bearing a compliance label can make a payment look as though someone has already checked it. Here, the complaint alleged that Noble had no policy or procedure ensuring that the amounts in the account were actually analyzed. The Nigerian subsidiary also allegedly failed to use the account consistently or correctly.

The warning had already reached internal audit. According to the complaint, audits in 2004 found that Nigerian personnel misunderstood facilitating payments and that the subsidiary had used the paper process to obtain a permit. The commission alleged that the process and payments continued despite those findings, while training and procedures remained insufficient. Finding the problem had not stopped the next payment.

A 2022 review in the Journal of Forensic and Investigative Accounting, How to Avoid Inadvertently Violating the Foreign Corrupt Business Practices Act Abroad, emphasizes visibility into foreign operations’ transactions, active monitoring and practical employee training. Noble’s alleged audit history shows why those practices matter: a written policy and a named expense account existed, but the permit process continued. For someone in finance or audit, the revealing connection is between the warning, the next approval and the way that payment entered the books.

The Same Customs Shortcut Across Oil Services

Noble’s resolution formed part of an investigation into customs bribery in the oil-services industry. In the same civil announcement, the Securities and Exchange Commission alleged that Panalpina paid customs officials on customers’ behalf and described the payments on invoices as “local processing,” “special intervention” or “special handling” fees. The agency said customers often authorized the bribes. An intermediary’s invoice could put an ordinary service description between the company’s approval and the official receiving the money.

The same separation between the bill and its purpose appears in Scoular‘s customs case in Mexico. Under its criminal deferred prosecution agreement, Scoular admitted bribes through customs brokers to pass inspections despite dirt, soil and other impurities in agricultural shipments. The brokers billed the payments as reinspection fees. At Noble, the SEC alleged a charge associated with a voyage that never happened. At Scoular, the admitted payment bought passage despite the condition of the goods.

The Records an Insider May Recognize

A rig’s actual location, its permit history and the agent’s invoice tell connected parts of this story. In Noble’s case, the SEC also identified approvals from Texas, expense entries in Nigeria and warnings from internal audit. We work with you to connect the permit decision, the payment and the records describing it to what you know about the rig’s actual movements.

An operations employee may know that the rig never left, while someone in accounting knows who approved the agent’s charge. An auditor may recognize the same payment after an earlier review had challenged it. Your knowledge of how those records fit together is what we work through with you, including what the company knew when it approved the expense.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For foreign-bribery information, the separate SEC whistleblower program can pay 10% to 30% of the sanctions collected. We assess that route with you using what you know about the payments and the records behind them.

You Know Where the Rig Was

If you know why a rig’s permit was renewed or what a customs agent’s charge really bought, speak to our whistleblower experts about the permit and the payment. We build the case with you and bring in FCPA whistleblower lawyers who understand customs payments and offshore drilling operations. We stay beside you as the permit history, payment approvals and accounts become a case that explains the business decision behind the bribe.