Netherlands: Settlements In Brief: JPMorgan's Hiring Scheme And Oilwell Varco Sanction Breaches

Enforcement actions by criminal and supervisory authorities are settled regularly. In light of these developments, companies are advised to take appropriate measures. This month we highlight recent settlements with two US companies. In the first case, US banking and financial services firm JPMorgan settled with the SEC, Department of Justice and Federal Reserve System in connection with alleged violations of anti-corruption rules. JP Morgan had allegedly hired relatives and friends of important foreign officials to win business and banking deals. This settlement highlights the broad scope of the Foreign Corrupt Practices Act, which enables US authorities to fight bribery abroad. The settlement also shows that US authorities interpret bribery broadly to include this type of hiring practice. The second settlement concerns violations of trade sanctions by US drilling company National Oilwell Varco. This company and two subsidiaries violated Iran, Cuba and Sudan trade sanctions from 2002 to 2009, resulting in a recent USD 25 million settlement. Particularly interesting in this settlement are the aggravating and mitigating factors, as highlighted by the U.S. Office of Foreign Assets Control.

JPMorgan settles FCPA matter for USD 264 million

JPMorgan Chase and its Hong Kong subsidiary JPMorgan APAC settled on 17 November 2016 with three US authorities for a total amount of USD 264 million. JPMorgan agreed to pay more than USD 130 million in disgorgement to the SEC and another USD 61.9 million civil penalty to the Federal Reserve System's Board of Governors. Both US authorities also issued a cease and desist order. JPMorgan APAC agreed to pay a USD 72 million criminal penalty to the DOJ as part of a non-prosecution agreement. The settlement is a result of alleged FCPA violations by JPMorgan from 2006 to 2016 which, according to the SEC, involved the creation of a hiring scheme to win business in China by employing relatives and friends of clients and Chinese government officials.

The special programme, which bypassed JPMorgan's normal hiring process, was referred to as the Sons and Daughters Program and aimed to increase business opportunities in, for example, Chinese initial public offerings. According to the SEC, unqualified persons were offered an internship or employment at JPMorgan, because of their links to important officials who were able to create business for the company. According to the Chief of the SEC Enforcement Division's FCPA Unit,  "referral hires vs revenue" spreadsheets were created to monitor the alleged programme. Some of the individuals also knew they were hired to attract business to JPMorgan, according to the US Attorney.

According to the SEC, JPMorgan was able to gain more than USD 100 million by giving well-paid jobs and internships to approximately 100 candidates. In addition to the special hiring programme, JPMorgan APAC employees tried to conceal the practices, according to the DOJ.

JPMorgan APAC, as part of the non-prosecution agreement, agreed to continue its cooperation with the DOJ, to enhance its compliance programme and to report to the DOJ on its implementation. Furthermore, for those individuals abroad who engaged in the alleged corrupt practices, the DOJ has made clear it will work together with the FBI to further investigate them.

Both the SEC and the DOJ highlight several mitigating factors, which were considered when determining the settlement:

  • cooperation with the investigation
  • significant action against individual employees who either were involved in the misconduct or failed to stop it
  • financial sanctions by the company against former or current employees

This settlement indicates that the FCPA is not only limited to situations where the advantage offered directly benefits the foreign official, but extends to advantages that benefit relatives and friends of the foreign officials; see also In context April 2016. It is important for companies to ensure that their anti-corruption policies cover this aspect of the FCPA and to approach the hiring of relatives of governmental officials with caution.

National Oilwell Varco settles trade sanctions violations

The Office of Foreign Assets Control (OFAC) fined US driller National Oilwell Varco and its subsidiaries Dreco and Almar on 14 November 2016. Oilwell Varco agreed to pay USD 25 million for violating trade sanctions. The alleged violations took place between 2002 and 2009 and involved the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and the Sudanese Sanctions Regulations.

The entire list of US authorities that have settled include the DOJ, the Department of Commerce, the Bureau of Industry and Security, the U.S. Department of Treasury, the OFAC, and the U.S. Immigration and Customs Enforcement. In addition, National Oilwell Varco concluded a Non-Prosecution Agreement with the U.S. Attorney's Office for the Southern District of Texas. In its enforcement information, the OFAC set out in detail in which alleged violations of trade sanctions National Oilwell Varco engaged, including the USD 13.6 million sale and exportation of goods to Iran between September 2006 and January 2008 and the USD 21,000 export of goods from the US to Sudan in 2005 and 2006.

According to OFAC, the alleged violations were egregious as National Oilwell Varco had every reason to know about the prohibited actions, but did not act accordingly. Furthermore, National Oilwell Varco did not voluntarily self-disclose the alleged misconduct.

A very interesting part of the information OFAC provided is the extensive reflection on both the aggravating and the mitigating factors underlying the settlement. Aggravating factors included the disregard for the violated sanctions and its effects, the fact that National Oilwell Varco is a highly developed company working in regions with high sanctions risk, and the inadequacy of its compliance programme. Mitigating factors were:

  • no violations were found in the five years before the alleged violations in this case
  • the company cooperated with the investigation, including interrupting the limitation period for more than 2600 days
  • the company remediated and further enhanced the compliance programme

This case highlights the need for a well-functioning compliance programme when doing business with sanctioned countries. This prevents violations and is clearly mentioned as a mitigating factor in enforcement by authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.