US authorities have dropped their foreign bribery case against Norwegian energy giant Statoil, after the satisfactory completion of a three-year deferred prosecution arrangement.

In 2006, the US Department of Justice charged the Norwegian gas and oil producer of violating the US Foreign Corrupt Practices Act (FCPA) by making a bribe of more than US$5 million, through an intermediary, to an Iranian official with the purpose of influencing the award of oil and gas contracts in the Middle East country.

The company was charged with making corrupt payments, as well as committing securities fraud by falsifying its books and mislabelling the illicit payments as “consulting fees”. As part of a settlement, Statoil acknowledged that the bribes were paid, was fined US$10.5 million, and had to submit to periodic reviews on the company’s compliance controls as they related to the FCPA for a period of three years.

Under the deferred prosecution deal, the criminal charges against it were to remain pending until it was dismissed or followed through by prosecution, depending on whether the company was able to demonstrate good conduct.

In a statement, Statoil said that it had fulfilled its obligations under this deferred prosecution agreement, and the criminal charges against the company have been dismissed. As such, the company’s controls, policies, and procedures related to compliance with FCPA will no longer be subject to review by external compliance consultants, it said.

“Three years of diligent efforts by Statoil to address past misconduct and serious compliance failures have led to the dismissal of foreign bribery charges against the company. Bribing foreign government officials and then attempting to disguise the payments cannot be standard operating procedure. Companies that have robust compliance programs risk far less than companies that take their chances on possible FCPA violations,” said US assistant attorney general Lanny Breuer.

US Attorney Prett Bharara said the case showed that deferred prosecution agreements worked, and they served as an important middle ground between declining to prosecute and getting a conviction. “The deferred prosecution in this case helped restore the integrity of Statoil’s operations and preserve its financial viability while at the same time ensuring that it improved what was obviously a failed compliance and anti-corruption program,” he said.

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Two men in China have been executed for their role in the tainted milk scandal last year that killed at least six infants, made another 300,000 sick, and caused widespread panic in the country.

According to a statement issued by Shijiazhuang Intermediate People’s Court, Zhang Yujun, a farmer, was executed for endangering public safety. He was named by prosecutors as one of the “principal criminals”, guilty of producing more than 750 tons of milk powder laced with the chemical melamine. He then sold 600 tons of it to distributors for 6.83 million yuan.

Geng Jinping, a milk salesman, was executed for producing and selling toxic food. He was convicted of adding 434kg of powder containing melamine to around 900 tons of milk.

Melamine is a protein-like substance which is high in nitrogen. It is used primarily to make plastics and fertilisers, and can cause kidney stones or kidney failure among children if ingested. In an attempt to boost profits, sometimes producers water down the milk they obtain from cows, and add melamine in order to fool inspectors who test for protein content.

The milk then made their way for the production of infant formula, causing many children to be sick after drinking it.

The two men were among the 21 people tried and sentenced in January for involvement in the scandal. One person was handed down a suspended death sentence, and the other 18, including senior executives from Sanlu – a state-own producer of infant formula – were given prison sentences of between two years to life.

The Chinese government has been keen to be seen as having responded swiftly and decisively to the scandal, partly because of allegations it tried to cover up the problems until last year’s Beijing Olympics ended in late August. The first allegations surfaced in mid-July. Parents of affected children have since been offered compensation ranging from 2,000 yuan to 200,000 yuan, in exchange for not pursuing civil lawsuits.

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