One of the main gripes that circulates among all sorts of companies attempting to operate in Central Asia is that some "insiders" are able to gain access to confidential bid packages, undercut their competitors' price and win contracts with a neatly revised price.
For at least one company that managed to procure business in Uzbekistan in this fashion, the game is up. And a pricey gambit it’s been, too.
According to US Department of Justice, Tenaris SA will cough up $3.5 million for breaches of the Foreign Corrupt Practices Act. The company, which is headquartered in Luxembourg, allegedly bribed Uzbek officials to relay their competitors’ bids for various pipeline projects.
As the Department of Justice explains:
Tenaris, a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world, admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company, and failed to record such payments accurately in Tenaris’s books and records. In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage. Tenaris agreed to pay the agent 3.5 percent of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.
The Securities and Exchange Commission went one step further and hit Tenaris with a $5.4 million fine.
Tenaris has indeed been burnt. But one wonders what happens on the Uzbek side of the equation? The Foreign Corrupt Practices Act is clearly something that happens to other people.
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