As 2017 drew to a close, aerospace giant Airbus faced corruption allegations in five countries.
Airbus, which was already under investigation in the UK, France, Germany and Austria for suspected corruption, announced late last year that it had found "inaccuracies in filings" made with the U.S. Department of State under the International Traffic in Arms Regulations (ITAR); which cover payments to third parties in some overseas sales. The French aircraft maker is now cooperating with the US authorities.
Airbus’ problems with bribery are not unique. For example, BAE paid the US Department of Justice a $400M criminal fine in 2010 for impeding investigators, making false statements about its Foreign Corrupt Practices Act compliance program and violating the Arms Export Control Act and ITAR. It also paid the UK Serious Fraud Office (SFO) a £30M fine in a negotiated resolution. The following year, it was fined $79M by the US State Department for violating the Arms Export Control Act and ITAR. The penalties were due to payments made regarding the sale of fighter planes to Saudi Arabia and Eastern Europe.
But while Airbus’ problems may not be unique, they are certainly major. Airbus’ situation illustrates both the risks of bribery across jurisdictions and the need to tackle those risks. It is a situation that emphasises that bribery is now far less likely to be unpunished, unnoticed or even accepted, as may have been the case previously.
Authorities across the world are more attuned to the signs of bribery, able to share information with foreign counterparts on a far quicker and more regular basis than in previous years and, in simple terms, they are now better at tackling corruption.
It would be foolish for companies and the individuals within them – specifically directors and in-house solicitors - to keep thinking that bribery is a harmless tool to boost foreign trade. Anyone taking such an approach could find themselves facing an international investigation.
If that is the case, they will require legal advice from solicitors who have:
* The ability to put together an international defence case.
* The knowledge of business crime law in a number of countries.
* The skills to conduct negotiations with a number of investigating agencies from various nations.
Coordination is crucial to any successful defence against international bribery allegations.
While devising a cross-border defence case and knowing the law in many countries are essential prerequisites for any legal team representing a client facing allegations of international bribery, negotiation is an area which should not be ignored. Its importance should not be underplayed.
Logical, persuasive and informed negotiation with the authorities can be as important as any other aspect of a defence case when looking to obtain the most favourable outcome.
Earlier this year, Rolls-Royce paid £671M to settle allegations that it had used widespread bribery in many countries to win contracts. It did not report the wrongdoing to the Serious Fraud Office (SFO) and the evidence against it was compelling. And yet it avoided prosecution, was given a deferred prosecution agreement (DPA) and received a discount on the fines it had to pay.
This was because Rolls-Royce offered what the DPA settlement called “extraordinary cooperation’’ to the authorities. It helped investigators establish what had happened, removed many senior staff with links to the bribery and devised and introduced tougher preventative measures; even hiring Lord Gold to examine its anti-corruption measures.
But Rolls-Royce also emphasised to the authorities that its 50,000 employees – and many, many more in its supply chain – would be harmed if it as punished too harshly.
Rolls-Royce had little defence to the allegations it faced. But it negotiated itself away from what could have been a potentially catastrophic criminal prosecution.
The international nature of bribery means, as we have outlined here, that companies who face such allegations require skilled international legal representation.
It is an area that may well grow, as many countries start to uncover and act upon evidence of large-scale bribery that has been committed within their borders over the years. The Rolls-Royce case, for example, involved bribery carried out between 1989 and 2013.
For those who find themselves accused of bribery, the right choice of legal representation can make a vast difference to the outcome of the investigation. The likes of Airbus and Rolls-Royce should serve as a reminder of the seriousness of the allegations and the need to make the right legal choices.
But for companies that are certain they have not indulged in bribery anywhere or at any time in their history, such high-profile cases can be a useful reminder of the need to avoid such problems in the future. Anyone doing business abroad faces the risk of being embroiled in – or at least of being asked to be involved in – bribery. Prevention is key.
The risks may vary wildly from country to country and from business sector to sector. But all companies must:
* Seek informed, expert advice about the dangers of bribery in the sectors and countries they operate, or plan to operate, in.
* Devise and introduce appropriate workplace practices that prevent any member of staff or company representative being able to either offer or receive a bribe or make it possible for anyone else to do so.
Legal help is available for companies looking to take such precautions when trading abroad. The Airbus case alone should make everyone trading across borders think long and hard about their anti-bribery measures.