Airbus SE, a France based global provider of civilian and military aircraft agreed to resolve corruption charges with authorities in the United States, France and the U.K tied to a multi-year scheme. The company agreed to pay fines totaling over $3.9 billion.
Beginning in 2008, and continuing for the next seven years, the company engaged in a global corruption scheme that utilized the payment of bribes to, among others, foreign officials, to obtain business advantages. With respect to the FCPA, the DOJ papers focus on China and agreements entered into in conjunction with the purchase and sale of aircraft by private and state owned enterprises. Emails and other actions that were part of the scheme were undertaken in the United States.
With respect to violations of The Arms Control Act or AECA and the International Traffic in Arms Regulations or ITAR, the papers note that the firm failed to provide the Department of State’s Directorate of Defense Trade Controls or DDTC with accurate information related to commissions paid to third party brokers retained to solicit, promote and otherwise secure the sale of defense articles and defense services to foreign armed forces. Airbus falsely reported information about their its conduct to the U.S. government for over five years. This permitted the firm to gain valuable licenses to export U.S. military technology. Such conduct creates a national security risk, according to the papers.
The charges in other countries are linked to similar conduct. For example, the papers in the U.K. action brought by the Serious Fraud Office center on wrongful, corrupt conduct undertaken for similar purposes in Malesia, Sri Lanka and Taiwan.
Airbus resolved the issues with the DOJ, which had limited jurisdiction and less of an interest that France or the U.K. according to the court documents, by entering into a deferred prosecution agreement tied to a criminal information which charges conspiracy to violate the anti-bribery provisions of the FCPA and conspiracy to violate the AECA and its implementing regulations, the ITAR. The firm will pay $527 million for the FCPA and ITAR violations, and an additional 50 million Euros or about $55 million, as part of a civil forfeiture agreement for the ITAR related conduct. The DOJ agreed to credit a portion of the amount paid by the company to the Parquet National Financier or PNF in France under Airbus’ agreement with that regulator. Airbus will also pay a $10 million penalty to the State Department’s DDTC of which the DOJ is crediting $5 million.
In resolving matters with the DOJ, Airbus was not given credit for self-reporting with respect to the FCPA violations since those were revealed in a U.K. investigation. The company did receive credit for its cooperation during the investigation and its remedial efforts and for reporting the other violations.
Airbus also resolved charges with the PNF by agreeing to pay more than 2 billion Euros or about $2.29 billion pursuant to an agreement with that regulator. The company settled, in addition, with the U.K. Serious Fraud Office related to bribes in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana. Airbus agreed to pay about 990 million Euros or approximately $1.09 billion. The PNF and the SFO investigated the company as part of a joint investigative team.