April 18, 2018 / 8:06 PM / 3 months ago

Mexico bans government business with Odebrecht for two-and-a-half years

MEXICO CITY (Reuters) - Mexico has banned federal institutions and state governments from doing business with Brazilian construction firm Odebrecht SA [ODBES.UL] for the next 2-1/2 years, and fined the company around $60 million, the government said.

FILE PHOTO: The corporate logo of the Odebrecht SA construction conglomerate is pictured at its headquarters in Sao Paulo, Brazil April 9, 2018. REUTERS/Nacho Doce

State bodies are prohibited from “participating in federal public contracts or any contract with Construtora Norberto Odebrecht S.A.,” the government’s official gazette said late on Tuesday. Existing contracts were not affected, it added.

Two units of the Brazilian company had each been fined 543.5 million pesos ($30.1 million), a government document showed. Two legal representatives of the company were also fined 1.26 million pesos ($69,700) each, it added.

The decisions relate to probes into suspected corruption involving Odebrecht’s business with state oil firm Pemex [PEMX.UL], officials say. The government did not provide details.

Odebrecht said in a statement that the company had been notified and was analyzing the steps taken by Mexico.

Odebrecht has spent the past few years at the center of one of the largest corruption scandals in Latin America, and has admitted paying bribes from Peru to Panama.

In December, Mexico banned the Brazilian construction firm from bidding for federal public contracts for four years after the Public Administration Ministry (SFP) said it had sanctioned the company for an “incorrect charge” with Pemex.

Ecuador jailed its vice president over the Odebrecht scandal, and the company has paid billions of dollars in settlements in the United States, Brazil and Switzerland.

Last month, Peru’s president resigned after a probe targeted his connections to Odebrecht.

Odebrecht has admitted to U.S. and Brazilian prosecutors that it paid $10.5 million in bribes in Mexico.

($1 = 18.0895 Mexican pesos)

Reporting by Lizbeth Diaz and Dave Graham; additional reporting by Alberto Alerigi in Sao Paulo; editing by Susan Thomas and Rosalba O'Brien

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