Sao Paulo and Washington - US and Brazilian authorities are investigating whether Embraer bribed officials in Argentina and the Dominican Republic to secure deals for commercial and defence aircraft, according to legal documents.
The investigations involve the sale of 20 passenger jets to an Argentine state airline, worth about $900 million (about R9.1 billion) at Embraer list prices, and a $92m deal with the Dominican armed forces for eight Super Tucano light attack planes, according to documents prepared by prosecutors.
The third-largest commercial plane maker disclosed two years ago that it had been under investigation by the US Department of Justice and the Securities and Exchange Commission since 2010 regarding sales of aircraft abroad. The allegations cast a harsh light on one of Brazil’s biggest exporters and a cornerstone of its growing defence industry, which is looking to build credibility with major powers after years of dealing arms in emerging markets.
Embraer’s defence division has partnered with Boeing to sell an upcoming military cargo jet, its biggest plane ever, against Lockheed Martin’s Hercules airlifter in the US and Britain.
In documents reviewed by Reuters, prosecutors cited evidence that Embraer executives approved a $3.4m bribe to a Dominican official with influence in military procurement. Details of the Dominican Republic case were first reported by the Wall Street Journal at the weekend.
The company said it was co-operating fully with authorities but it declined to comment on details of allegations because of the confidentiality of the investigation.
“The company requires that all its employees have a conduct of strict compliance with laws and regulations,” a spokesman said.
Officials at the US Department of Justice and the Securities and Exchange Commission were not available for comment. Brazilian federal prosecutors, Dominican defence officials and representatives for Argentina’s state airline were not available for comment.
International co-operation on the investigation reflects a rare instance of Brazilian authorities probing a local company for its foreign business practices.
Brazil has criminal laws against bribing foreign officials, but no direct equivalent of the Foreign Corrupt Practices Act, which gives US authorities grounds to investigate US-listed companies for bribery overseas.
Embraer has notified investors of the ongoing legal probe through its quarterly earnings reports. – Reuters