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Airbus reaches legal settlements to end bribery and compliance probes

7th February 2020

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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Europe-based major aerospace group Airbus has issued a brief press release concerning its negotiations with regulators and law enforcement agencies in three countries.

The release stated in full: “Airbus confirms that it has reached agreement in principle with the French Parquet National Financier, the UK Serious Fraud Office (SFO) and the US authorities. These agreements are made in the context of investigations into allegations of bribery and corruption, as well as compliance with the US International Traffic in Arms Regulations. “They remain subject to approval by French and UK courts and US courts and regulators. For legal reasons, Airbus cannot make any comments on the details of its discussions with the investigating authorities.”

According to media reports, Airbus has agreed to pay £3-billion (or €3.6-billion, or $4-billion) to authorities to settle allegations of bribery and corruption. These allegations involve both defence and civil contracts.

In 2012, the SFO started to investigate claims that a unit of Airbus had used bribes amounting to millions of pounds to win a Saudi Arabian military communications upgrade contract worth £2-billion. In 2014, the SFO launched a second probe, which dealt with allegations of irregularities in Airbus’s use of middlemen to win contracts from airlines. In 2017 the Parquet National Financier joined the SFO in this second investigation.

Meanwhile, in 2016, the company reported itself to UK Export Finance over concerns regarding its applications for export credit. As a result, the agency suspended all Airbus requests for such finance and reported the situation to the SFO. Also in 2017, Airbus reported itself to the US State Department regarding arms sales it had made to foreign countries.

The top executives at Airbus during the period in which these alleged legal violations took place have all since been replaced. This stimulated suggestions among observers that the company was preparing the way for a settlement with the authorities.

“Sorting out the fraud investigation is likely to remove a major overhang for the company,” Vertical Research Partners partner Robert Stallard told the London Daily Telegraph. “Airbus has done pretty much all it can, removing a generation and overhauling business practices.”

The SFO may still seek to try individuals involved in these deals. However, this could take a long time.

Online news and information website Flightglobal pointed out that, in 2018, Airbus had agreed a €81-million settlement with German authorities to end another corruption investigation. That probe concerned the sale of jet fighters to Austria in 2003.

As a result of these various allegations, self-reporting events and investigations, Airbus set up an independent review panel, which was tasked with examining the company’s cultures and systems in order to ensure that its future behaviour would be irreproachable. Further, since then, as various board members retired, a number of them were replaced by outside candidates to strengthen transparency.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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