Samsung Heavy Industries Co. Ltd: The Commission Behind the Drillship Sale

In its criminal FCPA case, Samsung Heavy Industries Co. Ltd admitted paying approximately $20 million in commissions knowing portions would fund bribes to Petrobras officials. The shipbuilder wanted a sale to an offshore drilling company in Houston, and Petrobras’s decision to charter the vessel helped make that sale happen. If you worked on the sale or knew the intermediary’s assignment, that connection is the heart of the case.

This page follows the drillship transaction and the commission behind it. Our FCPA cases and settlements page connects the wider patterns. Samsung Heavy Industries was a South Korea-based engineering company providing shipbuilding, offshore platform construction and other construction and engineering services. In November 2019, it entered a deferred prosecution agreement with the Justice Department over a conspiracy to violate the Foreign Corrupt Practices Act’s anti-bribery provisions.

The Drillship Sale Depended on Petrobras’s Charter

Samsung’s criminal admissions describe a sale whose success depended on a different company’s contracting decision. Samsung was selling a drillship to a Houston-based offshore oil drilling company. The bribery scheme sought to cause Petrobras, Brazil’s state-owned and state-controlled energy company, to enter a contract to charter that ship.

The shipbuilder’s buyer and the company whose officials were to receive bribes occupied different places in the deal. The drilling company would buy the vessel, while Petrobras’s charter would put it to work. Samsung’s admitted purpose was to obtain the charter decision that facilitated its own sale.

That is why we look beyond the name on a sales contract when following the payment through a multinational transaction. A sales employee may understand why a prospective charter mattered to the vessel order, while someone in finance sees the intermediary’s commission. Together, those accounts can connect the commercial result to the payment intended to secure it.

The Commission Reached Beyond the Intermediary

According to the Justice Department’s account of Samsung’s criminal admissions, the conduct began in 2007 and continued until 2013. The company knew that portions of its payments to the Brazilian intermediary would become bribes to Petrobras officials.

In Samsung’s criminal admissions, we see what the commission was buying: influence over Petrobras’s charter decision. For an honest shipbuilder competing for that business, the price and the vessel were only part of the contest. The commission had another customer.

A 2022 review in the Journal of Forensic and Investigative Accounting places intermediary payments at the center of the broader enforcement pattern. Its observation explains why the person who knows an agent’s real assignment can matter so much:

For a person reviewing commissions, the useful comparison is between the service described in the engagement, the work actually performed and the recipient of the money. Our review follows those connections through the approval and any onward payment. In Samsung’s case, the admission supplies the crucial connection: the company knew that some of the commission would reach officials as bribes.

Petrobras Officials Could Shape the Buying Process

Petrobras’s separate enforcement case shows how officials inside a customer could control contracts and defeat procurement rules. In its September 2018 order concerning Petrobras, the Securities and Exchange Commission described executives giving a contractor cartel inside information, manipulating bidding and approving contracts outside the company’s procurement rules.

The order identified a concentration of authority that a procurement insider would recognize. The same executives could award and approve contracts, and they could approve amendments without legal review unless they requested it. The SEC described what happened to the company’s written procedures:

That parallel helps explain why the person who can change the customer’s decision matters to a supplier. The intermediary’s access has value when an official can influence who gets business, what gets approved or how a competition runs. In Samsung’s admitted scheme, the commercial objective was a Petrobras charter that would help close Samsung’s sale.

Samsung’s U.S. Branch Office Was Part of the Scheme

Samsung’s criminal admissions also placed conduct inside the United States: the company took actions in furtherance of the bribery conspiracy from its U.S. branch office. That gives the story a connection beyond a Korean shipbuilder and officials in Brazil. An employee familiar with decisions made in that office may understand a part of the transaction that the commission recipient’s address would never explain.

For an insider, the useful connection is what the branch did in the transaction. We examine who approved the intermediary, who authorized payments and how those decisions related to the customer’s charter decision. That connects the U.S. activity to the business purpose instead of stopping at the office location.

Samsung’s Response Reached the Vendor File

The Justice Department’s 2019 announcement described changes aimed at how Samsung selected, supervised and paid third parties. The company strengthened its anti-corruption policies and due diligence controls over third-party vendors.

For someone in accounts payable or compliance, vendor due diligence reaches a concrete set of questions: why this intermediary, what work was expected, who approved the fee and what happened after approval. The Justice Department’s September 2024 compliance evaluation likewise asks about the business rationale, compensation, actual performance, audit rights and continued monitoring of third parties.

We read those controls against the transaction. A description of services can be compared with the work product, the invoice with the approval, and a compliance question with the company’s response. Someone who handled those records may know whether the commission’s explanation matched what the intermediary was actually doing.

What an Offshore Insider Can See

The strongest whistleblower evidence connects a payment to the decision it was meant to buy. Samsung’s case makes that connection unusually concrete: an intermediary commission, officials at a state-controlled energy company and a charter that supported a drillship sale. A person can understand one part deeply without working in every company involved.

A sales or project employee may know how the vessel order and charter discussions fit together. A finance employee may know the commission request, payment authorization or named beneficiary. A compliance employee may know the diligence questions, the answers management accepted and what happened when concerns arose. We bring those perspectives together around the transaction and the people with authority over it.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. That separate law concerns fraud against the U.S. government. For overseas bribery, our whistleblower experts assess the FCPA reporting and award questions with you.

You Know Why the Commission Was Paid

If you know how an intermediary’s payment connected a ship sale to an official’s decision, speak to one of our Whistleblower Experts about that connection. We develop the case with you and bring in foreign bribery whistleblower lawyers who understand commissions, state-owned customers and cross-border transactions. We work beside you throughout, using your knowledge of the deal to build your strongest foreign bribery whistleblower case.