In re TENARIS S.A.

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UNITED STATES OF AMERICA 
Before the  
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT of 1934 
Release No. 95030 / June 2, 2022 
ADMINISTRATIVE PROCEEDING 
File No. 3-20875 
 
In the Matter of 
TENARIS S.A. 
 Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT 
TO SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST 
ORDER 
 
 
I.  
  
The Securities and Exchange Commission (“Commission”) deems it appropriate that 
cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Exchange Act”) against Tenaris S.A. (“Respondent”).  
II.  
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 
 
 

 
 
III.  
  
On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
Summary 
1. This matter concerns violations of the anti-bribery, books and records, and 
internal accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (“FCPA”) 
by Tenaris, as a result of a bribe scheme involving agents and employees of its Brazilian 
subsidiary to obtain and retain business from a Brazil state-owned entity (“SOE”) Petróleo 
Brasileiro S.A. (“Petrobras”). Between 2008 and 2013, approximately $10.4 million in bribes 
were funded on behalf of a Tenaris Brazilian subsidiary by companies affiliated with Tenaris’ 
controlling shareholder and paid to a Brazilian government official in connection with the 
bidding process at the SOE. During the same relevant period, the Tenaris Brazilian subsidiary 
obtained more than $1.0 billion in contracts from Petrobras. 
Respondent 
2. Tenaris S.A. (“Tenaris”) is a global manufacturer and supplier of steel pipe 
products and related services, headquartered in Luxembourg. Tenaris trades ADRs on the New 
York Stock Exchange (NYSE: TS) and has filed periodic reports pursuant to Section 12(b) of the 
Exchange Act with the Commission since at least 2003. Tenaris is part of a conglomerate of 
companies referred to as “Techint” or “the Techint Group” which is controlled by a private 
company, San Faustin, through the holding company Techint Holdings S.a.r.l. San Faustin 
controlled the majority of Tenaris’ shares during the relevant time period and Tenaris disclosed 
San Faustin as its controlling shareholder in its filings with the Commission. In 2011, Tenaris 
entered into a Non-Prosecution Agreement with the Department of Justice and a Deferred 
Prosecution Agreement with the Commission involving bribes Tenaris paid to obtain business 
from an SOE in Uzbekistan. 
Other Relevant Entities and Individuals 
3. San Faustin, S.A. (“San Faustin”) is a Luxembourg private limited liability 
company, which controls the Techint Group, an international conglomerate with interests in the 
steel, oil & gas, and engineering and construction sectors. During the relevant period, San 
Faustin, through its wholly owned subsidiary Techint Holdings S.a.r.l., owned 60.45% of 
Tenaris’ shares. San Faustin shared certain common officers and directors with Tenaris. 
4. Confab Industrial S.A. (“Confab”) is Tenaris’ operating subsidiary in Brazil. 
During the relevant period, Tenaris controlled Confab and consolidated Confab’s results of 
operations into its financial statements. 
5. Petróleo Brasileiro S.A. (“Petrobras”) is a Brazilian multinational mixed joint 
stock corporation in the petroleum industry headquartered in Rio de Janeiro, Brazil. Its ADRs 
                                                           
1
   The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 
other person or entity in this or any other proceeding. 

 
 
trade on the New York Stock Exchange (NYSE: PBR/PBRA) and Petrobras has filed periodic 
reports pursuant to Section 12(b) of the Exchange Act with the Commission since at least 2002. 
Under the company’s Bylaws, the Brazilian federal government controls Petrobras and owns the 
majority of Petrobras’ voting shares. The Brazilian federal government also has the right to elect 
a majority of Petrobas’ directors regardless of any rights that Petrobras minority shareholders 
may have to such election. 
6. Government Official is a Brazilian national and was a high-ranking manager in 
Petrobras’ supply procurement and tender process department. Government Official pled guilty 
in Brazil to corruption-related crimes in connection with his position at Petrobras.  
7. Uruguayan Company is a Uruguayan shell entity incorporated in 2009. During 
the relevant period, bribe payments were deposited into the Uruguayan Company bank account 
for the benefit of Government Official. 
8. Panamanian Company is a Panamanian off-the-shelf shell entity incorporated and 
eventually liquidated at the behest of employees of entities within the Techint Group who had roles 
or close associational ties with Tenaris and/or its management. 
Facts 
9. During the relevant period, Tenaris was a global supplier of steel pipes and related 
services for the world’s energy industry. Tenaris was listed on the New York Stock Exchange, 
Buenos Aires Stock Exchange, Mexican Stock Exchange, and the Italian Stock Exchange. It 
operated in North and South America, Europe, Asia and Africa. In Brazil, Tenaris held 99% of 
the voting shares
2
 of its subsidiary, Confab, a Brazilian producer of welded steel pipe products. 
10. In order to increase sales in Brazil, in 2008, Confab’s long-time agent (“Confab 
Agent”) entered into an understanding with Government Official that Government Official 
would use his authority to influence Petrobras to forgo an international tender process for certain 
contracts for pipes and tubes, thereby favoring Confab, by continuing its status as the only 
domestic supplier, and allowing direct negotiations with it. Confab would benefit through the 
elimination of international competitors which may have submitted lower bids and forced 
Confab to lower its price, if not lose the contract altogether. Further, with a steady stream of 
business from Petrobras, Confab would maintain full operation of its production unit in Brazil, 
further advantaging it over potential international competitors who had expensive shipping costs 
that Confab did not. In exchange Government Official received approximately 0.5% of Confab’s 
revenue from these contracts. 
11. In an effort to conceal the bribe payments, Government Official recruited an 
associate (“Associate”) to help him arrange for the receipt of payments. Associate arranged for 
the formation of Uruguayan Company, a shell company in Uruguay, and the opening of a bank 
account in its name. During the relevant period, the bribes were paid into Uruguayan Company’s 
bank account for the benefit of Government Official. 
                                                           
2
  Tenaris acquired all remaining minority shares in Confab in 2012. 

 
 
12. Associate communicated with Confab Agent and later a senior Confab employee 
about the bribe scheme including about the timing of bribe payments being deposited into the 
Uruguayan Company bank account. 
13. The bribe payments to Government Official were sourced initially from a bank 
account in the name of a San Faustin controlled offshore company, which itself was funded by 
Tenaris-affiliated and San Faustin-affiliated companies. From there, the money passed through 
various offshore San Faustin-related holding companies and bank accounts located in both the 
U.S. and foreign jurisdictions. Each of these companies and accounts were controlled by 
employees of entities within the Techint Group who had roles or close associational ties with 
Tenaris and/or its management. One such entity and related bank account used in the scheme was 
Panamanian Company. In 2013, the payments to Government Official’s Uruguayan Company’s 
bank account came from Panamanian Company. 
14. To conceal the bribe payments, fake contracts were executed between Uruguayan 
Company and Panamanian Company in which Panamanian Company agreed to pay Uruguayan 
Company for purported past and future consultancy and advisory services that Uruguayan 
Company performed for “the companies of the group to which [Panamanian Company]” was a 
part. 
15. Additional bribe payments were funneled to Government Official through similar 
means. 
16. In total, Government Official received at least $10.4 million in bribes between 
2008 and 2013. Government Official used the money for various purposes, including to purchase 
real estate and artwork. 
17. The various transactions by which illicit payments were routed in connection with 
the Petrobras contracts were inaccurately reflected in Confab’s books and records. Confab’s 
books and records were consolidated into Tenaris’ for purposes of Commission filings. 
18. Despite known corruption risks in connection with its Brazilian operations and 
having been previously the subject of a Non-Prosecution Agreement with the Department of 
Justice and a Deferred Prosecution Agreement with the Commission as a result of bribes Tenaris 
paid to obtain business from an SOE in Uzbekistan, Tenaris failed to devise and maintain a 
system of internal accounting controls sufficient to provide reasonable assurances to detect and 
prevent the payment of bribes and to adequately identify and disclose related party transactions. 
Legal Standards and Violations 
19. Under Exchange Act Section 21C(a), the Commission may impose a cease-and 
desist order upon any person who is violating, has violated, or is about to violate any provision 
of the Exchange Act or any regulation thereunder, and upon any other person that is, was, or 
would be a cause of the violation, due to an act or omission the person knew or should have 
known would contribute to such violation. 
20. As a result of the conduct described above, Respondent violated Section 30A of 
the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 

 
 
Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 
such issuer, or any stockholder acting on behalf of an issuer, in order to obtain or retain business, 
from corruptly giving or authorizing the giving of anything of value to any foreign official for 
the purposes of influencing the official or inducing the official to act in violation of his or her 
lawful duties, or to secure any improper advantage, or to induce a foreign official to use his 
influence with a foreign governmental instrumentality to influence any act or decision of such 
government or instrumentality. 
21. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(A) of the Exchange Act, which requires issuers with a class of securities registered 
pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 
Section 15(d) of the Exchange Act to make and keep books, records, and accounts, which in 
reasonable detail, accurately and fairly reflected the transactions and dispositions of assets. 
22. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 
pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 
Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting 
controls sufficient to provide reasonable assurances that (i) transactions are executed in 
accordance with management’s general or specific authorization; (ii) transactions are recorded as 
necessary (I) to permit preparation of financial statements in conformity with generally accepted 
accounting principles or any other criteria applicable to such statements, and (II) to maintain 
accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences. 
Disgorgement  
23. The disgorgement and prejudgment interest referenced in paragraph IV is 
consistent with equitable principles, does not exceed Respondent’s net profits from its violations, 
and returning the money to Respondent would be inconsistent with equitable principles. 
Therefore, in these circumstances, distributing disgorged funds to the United States Treasury is 
the most equitable alternative. The disgorgement and prejudgment interest referenced in 
paragraph IV shall be transferred to the general fund of the U.S. Treasury, subject to Section 
21F(g)(3) of the Exchange Act. 
Commission Consideration of Tenaris’ Cooperation and Remedial Efforts 
24. In determining to accept the Offer, the Commission considered Tenaris’ 
cooperation and remedial efforts. Tenaris’ cooperation included providing translated copies of 
various documents and relevant witness testimony and encouraging parties outside of the 
Commission’s subpoena power to provide relevant evidence and information. 
25. Tenaris made and continues to make enhancements to its internal accounting 
controls, global compliance organization and its policies and procedures regarding due diligence, 
use of third parties, and maintenance of adequate records. Tenaris’ remedial measures have 

 
 
included terminating its commercial agents in Brazil and significantly reducing its use of 
commercial agents worldwide. Tenaris implemented a Code of Conduct, a Code of Ethics for 
Senior Financial Officers, a Business Conduct Policy and several related procedures, and regular 
anti-bribery and compliance training. 
Undertakings 
Respondent undertakes to: 
 
1. During a two-year term as set forth below, Respondent shall report to the 
Commission staff periodically, at no less than six-month intervals, the status of its remediation 
and implementation of compliance measures related to the effectiveness of the anti-corruption 
policies, procedures, practices, internal accounting controls, recordkeeping, and financing 
reporting processes particularly as to preventing the use of unaccounted funds for illicit purposes 
to benefit Tenaris, including the use of funds available to Tenaris’ officers, directors, employees 
and/or agents as a result of their dual affiliation with Tenaris and San Faustin and related entities.  
During this two-year period, should Respondent discover credible evidence, not already reported 
to the Commission staff, that questionable or corrupt payments or questionable or corrupt 
transfers of value may have been offered, promised, paid, or authorized by Respondent, or any 
entity or person acting on behalf of Respondent, or that related false books and records have 
been maintained; or that Respondent’s internal controls failed to detect and prevent such 
conduct, Respondent shall promptly report such conduct to the Commission staff. 
 
2. During this two-year period, Respondent shall (1) conduct an initial review and 
submit an initial report, and (2) conduct and submit at least two follow-up reviews and reports, 
and (3) conduct and submit a Final Report, as described below: 
 
a. Respondent shall submit to the Commission staff a written report within 180 calendar 
days of the entry of this Order setting forth a complete description of its Foreign 
Corrupt Practices Act (“FCPA”) and anti-corruption related remediation efforts to 
date, its proposals reasonably designed to improve the policies and procedures of 
Respondent for ensuring compliance with the FCPA and other applicable 
anticorruption laws, and the parameters of the subsequent reviews (the “Initial 
Report”). The Initial Report shall be transmitted to Tracy L. Price, Deputy Unit Chief, 
FCPA Unit, Division of Enforcement, United States Securities and Exchange 
Commission, 100 F St. NE, Washington, DC 20549-5631.  Respondent may extend 
the time period for issuance of the Initial Report with prior written approval of the 
Commission staff. 
 
b. Respondent shall undertake at least two follow-up reviews, incorporating any 
comments provided by the Commission staff on the previous report, to further monitor 
and assess whether the policies and procedures of Respondent are reasonably designed 
to detect and prevent violations of the FCPA and other applicable anti-corruption laws 
(the Follow-up Reports). The first Follow-up Report shall be submitted by no later 
than 180 days after the Initial Report. The second Follow-up Report shall be submitted 
by no later than 360 days after the submission of the Initial Report.   
 

 
 
c. Respondent shall undertake a final review to further monitor and assess the operation 
of its FCPA and anti-corruption compliance program and whether Respondent’s 
policies and procedures are reasonably designed to detect and prevent violations of the 
FCPA and other applicable anti-corruption laws (the “Final Report”). The Final Report 
shall be submitted by no later than 540 days after the submission of the Initial Report. 
Respondent may extend the time period for issuance of the Follow-up Reports with 
prior written approval of the Commission staff. 
 
3. The periodic reviews and reports submitted by Respondent will likely include 
confidential financial, proprietary, competitive business or commercial information.  Public 
disclosure of the reports could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement. For these reasons, 
among others, the reports and the contents thereof are intended to remain and shall remain non-
public, except (1) pursuant to court order, (2) as agreed to by the parties in writing, (3) to the 
extent that the Commission determines in its sole discretion that disclosure would be in 
furtherance of the Commission’s discharge of its duties and responsibilities, or (4) is otherwise 
required by law. 
 
4. Certify, in writing, compliance with the undertaking(s) set forth above. The 
certification shall identify the undertaking(s), provide written evidence of compliance in the form 
of a narrative, and be supported by exhibits sufficient to demonstrate compliance. The 
Commission staff may make reasonable requests for further evidence of compliance, and 
Respondent agrees to provide such evidence. The certification and supporting material shall be 
submitted to Tracy L. Price, Deputy Unit Chief, FCPA Unit, with a copy to the Office of Chief 
Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 
completion of the undertakings.   
IV. 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Tenaris’ Offer. 
 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that:  
A. Respondent shall cease and desist from committing or causing any violations and 
any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 
B. Respondent shall, within 30 days of the entry of this Order, pay disgorgement of 
$42,842,497 and prejudgment interest of $10,257,841 to the Securities and Exchange 
Commission for transfer to the general fund of the United States Treasury, subject to Exchange 
Act Section 21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 
SEC Rule of Practice 600. Respondent shall, within 30 days of the entry of this Order, pay a civil 
money penalty in the amount of $25,000,000 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§3717.  

 
 
Payment must be made in one of the following ways: 
(1) Respondent may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov through 
the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
(3) Respondent may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission 
and hand-delivered or mailed to: 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
Payments by check or money order must be accompanied by a cover letter identifying 
Tenaris as the Respondent in these proceedings, and the file number of these proceedings; a copy 
of the cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA 
Unit, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549-5631.  
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes. To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 
of the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
D. Respondent acknowledges that the Commission is not imposing a civil penalty in 
excess of $ 25,000,000 based upon its cooperation in a Commission investigation. If at any time 
following the entry of the Order, the Division of Enforcement (“Division”) obtains information 
indicating that Respondent knowingly provided materially false or misleading information or 
materials to the Commission, or in a related proceeding, the Division may, at its sole discretion 
and with prior notice to the Respondent, petition the Commission to reopen this matter and seek 
an order directing that the Respondent pay an additional civil penalty. Respondent may contest 
by way of defense in any resulting administrative proceeding whether it knowingly provided 
materially false or misleading information, but may not:  (1) contest the findings in the Order; or 

 
 
(2) assert any defense to liability or remedy, including, but not limited to, any statute of 
limitations defense. 
E. Respondent shall comply with the undertakings enumerated in Section III above. 
  
 By the Commission. 
 
Vanessa A. Countryman 
        Secretary     
 
 
 

UNITED STATES OF AMERICA 

Before the  

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT of 1934 

Release No. 95030 / June 2, 2022 

ADMINISTRATIVE PROCEEDING 

File No. 3-20875 

 

In the Matter of 

TENARIS S.A. 

 Respondent. 

 ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT 

TO SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 

1934, MAKING FINDINGS, AND 

IMPOSING A CEASE-AND-DESIST 

ORDER 

 

 

I.  

  

The Securities and Exchange Commission (“Commission”) deems it appropriate that 

cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 

Securities Exchange Act of 1934 (“Exchange Act”) against Tenaris S.A. (“Respondent”).  

II.  

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 

Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 

 

 



 

 

III.  

  

On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

Summary 

1. This matter concerns violations of the anti-bribery, books and records, and 

internal accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (“FCPA”) 

by Tenaris, as a result of a bribe scheme involving agents and employees of its Brazilian 

subsidiary to obtain and retain business from a Brazil state-owned entity (“SOE”) Petróleo 

Brasileiro S.A. (“Petrobras”). Between 2008 and 2013, approximately $10.4 million in bribes 

were funded on behalf of a Tenaris Brazilian subsidiary by companies affiliated with Tenaris’ 

controlling shareholder and paid to a Brazilian government official in connection with the 

bidding process at the SOE. During the same relevant period, the Tenaris Brazilian subsidiary 

obtained more than $1.0 billion in contracts from Petrobras. 

Respondent 

2. Tenaris S.A. (“Tenaris”) is a global manufacturer and supplier of steel pipe 

products and related services, headquartered in Luxembourg. Tenaris trades ADRs on the New 

York Stock Exchange (NYSE: TS) and has filed periodic reports pursuant to Section 12(b) of the 

Exchange Act with the Commission since at least 2003. Tenaris is part of a conglomerate of 

companies referred to as “Techint” or “the Techint Group” which is controlled by a private 

company, San Faustin, through the holding company Techint Holdings S.a.r.l. San Faustin 

controlled the majority of Tenaris’ shares during the relevant time period and Tenaris disclosed 

San Faustin as its controlling shareholder in its filings with the Commission. In 2011, Tenaris 

entered into a Non-Prosecution Agreement with the Department of Justice and a Deferred 

Prosecution Agreement with the Commission involving bribes Tenaris paid to obtain business 

from an SOE in Uzbekistan. 

Other Relevant Entities and Individuals 

3. San Faustin, S.A. (“San Faustin”) is a Luxembourg private limited liability 

company, which controls the Techint Group, an international conglomerate with interests in the 

steel, oil & gas, and engineering and construction sectors. During the relevant period, San 

Faustin, through its wholly owned subsidiary Techint Holdings S.a.r.l., owned 60.45% of 

Tenaris’ shares. San Faustin shared certain common officers and directors with Tenaris. 

4. Confab Industrial S.A. (“Confab”) is Tenaris’ operating subsidiary in Brazil. 

During the relevant period, Tenaris controlled Confab and consolidated Confab’s results of 

operations into its financial statements. 

5. Petróleo Brasileiro S.A. (“Petrobras”) is a Brazilian multinational mixed joint 

stock corporation in the petroleum industry headquartered in Rio de Janeiro, Brazil. Its ADRs 

                                                           
1   The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 



 

 

trade on the New York Stock Exchange (NYSE: PBR/PBRA) and Petrobras has filed periodic 

reports pursuant to Section 12(b) of the Exchange Act with the Commission since at least 2002. 

Under the company’s Bylaws, the Brazilian federal government controls Petrobras and owns the 

majority of Petrobras’ voting shares. The Brazilian federal government also has the right to elect 

a majority of Petrobas’ directors regardless of any rights that Petrobras minority shareholders 

may have to such election. 

6. Government Official is a Brazilian national and was a high-ranking manager in 

Petrobras’ supply procurement and tender process department. Government Official pled guilty 

in Brazil to corruption-related crimes in connection with his position at Petrobras.  

7. Uruguayan Company is a Uruguayan shell entity incorporated in 2009. During 

the relevant period, bribe payments were deposited into the Uruguayan Company bank account 

for the benefit of Government Official. 

8. Panamanian Company is a Panamanian off-the-shelf shell entity incorporated and 

eventually liquidated at the behest of employees of entities within the Techint Group who had roles 

or close associational ties with Tenaris and/or its management. 

Facts 

9. During the relevant period, Tenaris was a global supplier of steel pipes and related 

services for the world’s energy industry. Tenaris was listed on the New York Stock Exchange, 

Buenos Aires Stock Exchange, Mexican Stock Exchange, and the Italian Stock Exchange. It 

operated in North and South America, Europe, Asia and Africa. In Brazil, Tenaris held 99% of 

the voting shares2 of its subsidiary, Confab, a Brazilian producer of welded steel pipe products. 

10. In order to increase sales in Brazil, in 2008, Confab’s long-time agent (“Confab 

Agent”) entered into an understanding with Government Official that Government Official 

would use his authority to influence Petrobras to forgo an international tender process for certain 

contracts for pipes and tubes, thereby favoring Confab, by continuing its status as the only 

domestic supplier, and allowing direct negotiations with it. Confab would benefit through the 

elimination of international competitors which may have submitted lower bids and forced 

Confab to lower its price, if not lose the contract altogether. Further, with a steady stream of 

business from Petrobras, Confab would maintain full operation of its production unit in Brazil, 

further advantaging it over potential international competitors who had expensive shipping costs 

that Confab did not. In exchange Government Official received approximately 0.5% of Confab’s 

revenue from these contracts. 

11. In an effort to conceal the bribe payments, Government Official recruited an 

associate (“Associate”) to help him arrange for the receipt of payments. Associate arranged for 

the formation of Uruguayan Company, a shell company in Uruguay, and the opening of a bank 

account in its name. During the relevant period, the bribes were paid into Uruguayan Company’s 

bank account for the benefit of Government Official. 

                                                           
2  Tenaris acquired all remaining minority shares in Confab in 2012. 



 

 

12. Associate communicated with Confab Agent and later a senior Confab employee 

about the bribe scheme including about the timing of bribe payments being deposited into the 

Uruguayan Company bank account. 

13. The bribe payments to Government Official were sourced initially from a bank 

account in the name of a San Faustin controlled offshore company, which itself was funded by 

Tenaris-affiliated and San Faustin-affiliated companies. From there, the money passed through 

various offshore San Faustin-related holding companies and bank accounts located in both the 

U.S. and foreign jurisdictions. Each of these companies and accounts were controlled by 

employees of entities within the Techint Group who had roles or close associational ties with 

Tenaris and/or its management. One such entity and related bank account used in the scheme was 

Panamanian Company. In 2013, the payments to Government Official’s Uruguayan Company’s 

bank account came from Panamanian Company. 

14. To conceal the bribe payments, fake contracts were executed between Uruguayan 

Company and Panamanian Company in which Panamanian Company agreed to pay Uruguayan 

Company for purported past and future consultancy and advisory services that Uruguayan 

Company performed for “the companies of the group to which [Panamanian Company]” was a 

part. 

15. Additional bribe payments were funneled to Government Official through similar 

means. 

16. In total, Government Official received at least $10.4 million in bribes between 

2008 and 2013. Government Official used the money for various purposes, including to purchase 

real estate and artwork. 

17. The various transactions by which illicit payments were routed in connection with 

the Petrobras contracts were inaccurately reflected in Confab’s books and records. Confab’s 

books and records were consolidated into Tenaris’ for purposes of Commission filings. 

18. Despite known corruption risks in connection with its Brazilian operations and 

having been previously the subject of a Non-Prosecution Agreement with the Department of 

Justice and a Deferred Prosecution Agreement with the Commission as a result of bribes Tenaris 

paid to obtain business from an SOE in Uzbekistan, Tenaris failed to devise and maintain a 

system of internal accounting controls sufficient to provide reasonable assurances to detect and 

prevent the payment of bribes and to adequately identify and disclose related party transactions. 

Legal Standards and Violations 

19. Under Exchange Act Section 21C(a), the Commission may impose a cease-and 

desist order upon any person who is violating, has violated, or is about to violate any provision 

of the Exchange Act or any regulation thereunder, and upon any other person that is, was, or 

would be a cause of the violation, due to an act or omission the person knew or should have 

known would contribute to such violation. 

20. As a result of the conduct described above, Respondent violated Section 30A of 

the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 



 

 

Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 

such issuer, or any stockholder acting on behalf of an issuer, in order to obtain or retain business, 

from corruptly giving or authorizing the giving of anything of value to any foreign official for 

the purposes of influencing the official or inducing the official to act in violation of his or her 

lawful duties, or to secure any improper advantage, or to induce a foreign official to use his 

influence with a foreign governmental instrumentality to influence any act or decision of such 

government or instrumentality. 

21. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(A) of the Exchange Act, which requires issuers with a class of securities registered 

pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 

Section 15(d) of the Exchange Act to make and keep books, records, and accounts, which in 

reasonable detail, accurately and fairly reflected the transactions and dispositions of assets. 

22. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 

pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 

Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting 

controls sufficient to provide reasonable assurances that (i) transactions are executed in 

accordance with management’s general or specific authorization; (ii) transactions are recorded as 

necessary (I) to permit preparation of financial statements in conformity with generally accepted 

accounting principles or any other criteria applicable to such statements, and (II) to maintain 

accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences. 

Disgorgement  

23. The disgorgement and prejudgment interest referenced in paragraph IV is 

consistent with equitable principles, does not exceed Respondent’s net profits from its violations, 

and returning the money to Respondent would be inconsistent with equitable principles. 

Therefore, in these circumstances, distributing disgorged funds to the United States Treasury is 

the most equitable alternative. The disgorgement and prejudgment interest referenced in 

paragraph IV shall be transferred to the general fund of the U.S. Treasury, subject to Section 

21F(g)(3) of the Exchange Act. 

Commission Consideration of Tenaris’ Cooperation and Remedial Efforts 

24. In determining to accept the Offer, the Commission considered Tenaris’ 

cooperation and remedial efforts. Tenaris’ cooperation included providing translated copies of 

various documents and relevant witness testimony and encouraging parties outside of the 

Commission’s subpoena power to provide relevant evidence and information. 

25. Tenaris made and continues to make enhancements to its internal accounting 

controls, global compliance organization and its policies and procedures regarding due diligence, 

use of third parties, and maintenance of adequate records. Tenaris’ remedial measures have 



 

 

included terminating its commercial agents in Brazil and significantly reducing its use of 

commercial agents worldwide. Tenaris implemented a Code of Conduct, a Code of Ethics for 

Senior Financial Officers, a Business Conduct Policy and several related procedures, and regular 

anti-bribery and compliance training. 

Undertakings 

Respondent undertakes to: 

 

1. During a two-year term as set forth below, Respondent shall report to the 

Commission staff periodically, at no less than six-month intervals, the status of its remediation 

and implementation of compliance measures related to the effectiveness of the anti-corruption 

policies, procedures, practices, internal accounting controls, recordkeeping, and financing 

reporting processes particularly as to preventing the use of unaccounted funds for illicit purposes 

to benefit Tenaris, including the use of funds available to Tenaris’ officers, directors, employees 

and/or agents as a result of their dual affiliation with Tenaris and San Faustin and related entities.  

During this two-year period, should Respondent discover credible evidence, not already reported 

to the Commission staff, that questionable or corrupt payments or questionable or corrupt 

transfers of value may have been offered, promised, paid, or authorized by Respondent, or any 

entity or person acting on behalf of Respondent, or that related false books and records have 

been maintained; or that Respondent’s internal controls failed to detect and prevent such 

conduct, Respondent shall promptly report such conduct to the Commission staff. 

 

2. During this two-year period, Respondent shall (1) conduct an initial review and 

submit an initial report, and (2) conduct and submit at least two follow-up reviews and reports, 

and (3) conduct and submit a Final Report, as described below: 

 

a. Respondent shall submit to the Commission staff a written report within 180 calendar 

days of the entry of this Order setting forth a complete description of its Foreign 

Corrupt Practices Act (“FCPA”) and anti-corruption related remediation efforts to 

date, its proposals reasonably designed to improve the policies and procedures of 

Respondent for ensuring compliance with the FCPA and other applicable 

anticorruption laws, and the parameters of the subsequent reviews (the “Initial 

Report”). The Initial Report shall be transmitted to Tracy L. Price, Deputy Unit Chief, 

FCPA Unit, Division of Enforcement, United States Securities and Exchange 

Commission, 100 F St. NE, Washington, DC 20549-5631.  Respondent may extend 

the time period for issuance of the Initial Report with prior written approval of the 

Commission staff. 

 

b. Respondent shall undertake at least two follow-up reviews, incorporating any 

comments provided by the Commission staff on the previous report, to further monitor 

and assess whether the policies and procedures of Respondent are reasonably designed 

to detect and prevent violations of the FCPA and other applicable anti-corruption laws 

(the Follow-up Reports). The first Follow-up Report shall be submitted by no later 

than 180 days after the Initial Report. The second Follow-up Report shall be submitted 

by no later than 360 days after the submission of the Initial Report.   

 



 

 

c. Respondent shall undertake a final review to further monitor and assess the operation 

of its FCPA and anti-corruption compliance program and whether Respondent’s 

policies and procedures are reasonably designed to detect and prevent violations of the 

FCPA and other applicable anti-corruption laws (the “Final Report”). The Final Report 

shall be submitted by no later than 540 days after the submission of the Initial Report. 

Respondent may extend the time period for issuance of the Follow-up Reports with 

prior written approval of the Commission staff. 

 

3. The periodic reviews and reports submitted by Respondent will likely include 

confidential financial, proprietary, competitive business or commercial information.  Public 

disclosure of the reports could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement. For these reasons, 

among others, the reports and the contents thereof are intended to remain and shall remain non-

public, except (1) pursuant to court order, (2) as agreed to by the parties in writing, (3) to the 

extent that the Commission determines in its sole discretion that disclosure would be in 

furtherance of the Commission’s discharge of its duties and responsibilities, or (4) is otherwise 

required by law. 

 

4. Certify, in writing, compliance with the undertaking(s) set forth above. The 

certification shall identify the undertaking(s), provide written evidence of compliance in the form 

of a narrative, and be supported by exhibits sufficient to demonstrate compliance. The 

Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence. The certification and supporting material shall be 

submitted to Tracy L. Price, Deputy Unit Chief, FCPA Unit, with a copy to the Office of Chief 

Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 

completion of the undertakings.   

IV. 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Tenaris’ Offer. 

 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that:  

A. Respondent shall cease and desist from committing or causing any violations and 

any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 

B. Respondent shall, within 30 days of the entry of this Order, pay disgorgement of 

$42,842,497 and prejudgment interest of $10,257,841 to the Securities and Exchange 

Commission for transfer to the general fund of the United States Treasury, subject to Exchange 

Act Section 21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 

SEC Rule of Practice 600. Respondent shall, within 30 days of the entry of this Order, pay a civil 

money penalty in the amount of $25,000,000 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§3717.  



 

 

Payment must be made in one of the following ways: 

(1) Respondent may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov through 

the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

 

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission 

and hand-delivered or mailed to: 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

Payments by check or money order must be accompanied by a cover letter identifying 

Tenaris as the Respondent in these proceedings, and the file number of these proceedings; a copy 

of the cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA 

Unit, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549-5631.  

C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes. To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 

of the Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

D. Respondent acknowledges that the Commission is not imposing a civil penalty in 

excess of $ 25,000,000 based upon its cooperation in a Commission investigation. If at any time 

following the entry of the Order, the Division of Enforcement (“Division”) obtains information 

indicating that Respondent knowingly provided materially false or misleading information or 

materials to the Commission, or in a related proceeding, the Division may, at its sole discretion 

and with prior notice to the Respondent, petition the Commission to reopen this matter and seek 

an order directing that the Respondent pay an additional civil penalty. Respondent may contest 

by way of defense in any resulting administrative proceeding whether it knowingly provided 

materially false or misleading information, but may not:  (1) contest the findings in the Order; or 

http://www.sec.gov/about/offices/ofm.htm


 

 

(2) assert any defense to liability or remedy, including, but not limited to, any statute of 

limitations defense. 

E. Respondent shall comply with the undertakings enumerated in Section III above. 

  

 By the Commission. 

 

Vanessa A. Countryman 

        Secretary