The Securities and Exchange Commission and the Justice Department are investigating China Petroleum and Chemical over allegations at the state controlled oil producer paid Nigerian officials about a one million
dollars in bribes to resolve a business dispute. According to people familiar with the probe, the alleged payments by outside lawyers acting as middlemen for the company known as sine Peck, were intended to resolve a four billion dollar dispute between the Chinese Oil Companies petroleum unit in Geneva and the Nigerian government. Here to help us explain this probe are Peter Henning, professor at Wayne State University Law School, and
Robert Hockett, professor at Cornell University Law School. Bob tell us more about the allegations. All right, So the allegation is that China Peck, through its ads, got into a dispute with the Nigerian government over a financial deal that was meant to be consummated over in Niger area. Um.
Ultimately this became more and more complicated. The litigation got kind of harry or I should not litigation, but the negotiation around possibilitation got sufficiently Harry UH that SINO picked through a X decided sort of resolve the dispute with the sort of side payment to the Nigerian government officials involved. UM this particular, these payments were said are said to have end are alleged to have been funneled through US banks UH. And that's of course with the U S
juristiction sort of comes into into the story. Um. So what we have now is the possibility of charges being brought by the SEC, perhaps by the d J against UM SINOPEC for essentially misusing UH its American bank accounts in conducting these payments. That would have been violation or Practices Act and violations of other nations statutes as well. Peter, is it unusual for U S officials to be interested
in a transaction like this? So, so Bob did mention the American banks and so that's a legal jurisdictional element there. But you know, we're talking about stuff in Europe, were talking about stuff in in Asia, We're talking about stuff in Africa. It seems like most of the activity is going on in places other than the US. Well, welcome
to the Foreign Corrupt Practices Act. It is, Uh, the law is so broad that if there have been cases in which emails were sent through Yahoo accounts, UH and servers in Silicon Valley, and that was the basis for the US to get involved. So it's not a surprise, um in a sense the Justice Department in sec have become something of the top cop for overseas bribery payments.
And of course, when you overlay this the fact that Sinopeck is um a Chinese controlled oil company and the US is raising issues about Chinese trade practices, you can certainly see this says part of an effort to use American laws to police Chinese company and potentially embarrass the Chinese government. Bob, the Swiss had looked into this matter and closed the book on it after a short inquiry. They required sign a pack to pay thirty two million
dollars in damages after admitting to organizational deficiencies. So is it is it? Should that have been the end of it? Is the US going a little too far in pursuing it further? Well, it sort of depends. I mean, Peter is exactly right that the Foreign Practices Act, which I also mentioned before, you know, affords a great abroad sort of jurisdiction, Right, to US authorities. Um, Basically, they can exercise jurisdiction anytime some American institution or firm has been
used in the perpetration of some active corruption. Um. The reasons I mean, the fact that we're able to do that, of course, is one thing. Whether we would want to do that or want to act on that jurisdiction is another, And that raises the questionable why would we want to? Peter identified one reason? Right, we are engaged in the kind of across the board sort of trade a competition with China, and there is some concern about Chinese business
practices more broadly. The other thing may be worth noting in this connection, though, is that US companies are routinely prosecuted under the Foreign corupt Practices acting are held to a pretty high standard by American law enforcement agencies, and so if they didn't do likewise with respect to foreign companies, that might in effect give foreign companies and advantage over American companies, right, they would be an effect subject to
less to more lacks regulation. So my guess is that that might be playing a role here as well, that basically we don't want to be sort of treating our own firms more harshly than we treat foreign firms if they're violating the same laws.