Airbus Reaches Agreements with French, U.K. and U.S. Authorities
(Source: Airbus; issued Jan. 31, 2020)
An infographic by Britain’s Serious Fraud Office (SFO) illustrating Airbus’ agreements with prosecutors in France, UK and US.
AMSTERDAM --- Airbus has reached final agreements with the French Parquet National Financier (PNF), the U.K. Serious Fraud Office (SFO), and the U.S. Department of Justice (DoJ) resolving the authorities' investigations into allegations of bribery and corruption, as well as with the U.S. Department of State (DoS) and the DoJ to resolve their investigations into inaccurate and misleading filings made with the DoS pursuant to the U.S. International Traffic in Arms Regulations (ITAR).
Airbus has agreed to pay penalties of € 3,598 million plus interest and costs to the French, U.K. and U.S. authorities. The settlements with each authority are as follows: PNF € 2,083 million, the SFO € 984 million, the DoJ € 526 million and the DoS € 9 million of which € 4.50 million may be used for approved remedial compliance measures.
Airbus received credit from the authorities for having reported and for its consistently strong cooperation during the investigations.
Convention Judiciaire d'Intérêt Public with the PNF
Airbus has agreed to enter into a Convention Judiciaire d'Intérêt Public with the PNF. This agreement does not amount to an admission of liability. Under this agreement, the PNF has agreed to suspend prosecution of Airbus for a duration of three years. Prosecution will be discontinued if Airbus complies with the terms of the agreement throughout this period, which it is committed to doing. The agreement also contains an obligation for Airbus to submit its compliance programme to targeted audits carried out by the Agence Française Anticorruption (AFA) over a period of three years.
Deferred Prosecution Agreement with the SFO
Airbus has agreed to enter into a Deferred Prosecution Agreement with the SFO. This agreement does not amount to an admission of liability. Under this agreement, the SFO has agreed to suspend prosecution of Airbus for a duration of three years. Prosecution will be discontinued if Airbus complies with the terms of the agreement throughout this period, which it is committed to doing. In light of the continuing monitorship to be conducted by the French Anti-Corruption body, the AFA, no independent compliance monitor will be imposed on Airbus under the agreement with the SFO.
Deferred Prosecution Agreement with the DoJ
Airbus has agreed to enter into a Deferred Prosecution Agreement with the DoJ. Under this agreement, the DoJ has agreed to suspend prosecution of Airbus for a duration of three years. Prosecution will be discontinued if Airbus complies with the terms of the agreement during this period, which it is committed to doing. No independent compliance monitor will be imposed on Airbus under the agreement with the DoJ.
Consent Agreement with the DoS
Finally, Airbus has agreed to enter into a Consent Agreement with the DoS. Under this agreement, the DoS has agreed to settle all civil violations of the ITAR outlined in Airbus' voluntary disclosures identified in the Consent Agreement, and Airbus has agreed to retain an independent export control compliance officer, who will monitor the effectiveness of Airbus' export control systems and their compliance with the ITAR.
For legal reasons, Airbus cannot make any comment on the agreed Statements of Facts published by the investigating authorities.
Airbus has taken significant steps to reform itself and to ensure that this conduct will not reoccur. Airbus has significantly enhanced its compliance system under the supervision of an Independent Compliance Review Panel. The Company is committed to conducting business with integrity.
Denis Ranque, Chairman of the Board of Directors of Airbus, stated: “The settlements we have reached today turn the page on unacceptable business practices from the past. The strengthening of our compliance programmes at Airbus is designed to ensure that such misconduct cannot happen again. The agreements also reflect that the decision to voluntarily report and cooperate with the authorities was the right one. The commitment from the Board, and its Ethics and Compliance Committee, to provide full support to the investigation and the implementation of globally recognised compliance standards have paved the way to today’s agreements.”
Guillaume Faury, Chief Executive Officer of Airbus, added: “The agreements approved today with the French, UK, and US authorities represent a very important milestone for us, allowing Airbus to move forward and further grow in a sustainable and responsible way. The lessons learned enable Airbus to position itself as the trusted and reliable partner we want to be.”
Airbus will continue to cooperate with the authorities in the future, pursuant to the agreements, and to install a strong Ethics & Compliance culture within the Company.
Airbus is a global leader in aeronautics, space and related services. In 2018 it generated revenues of € 64 billion and employed a workforce of around 134,000. Airbus offers the most comprehensive range of passenger airliners. Airbus is also a European leader providing tanker, combat, transport and mission aircraft, as well as one of the world’s leading space companies. In helicopters, Airbus provides the most efficient civil and military rotorcraft solutions worldwide.
SFO Enters into €991m Deferred Prosecution Agreement with Airbus As Part of a €3.6bn Global Resolution
(Source: UK Serious Fraud Office; issued Jan. 31, 2020)
The Serious Fraud Office has entered into a record-breaking Deferred Prosecution Agreement (DPA) with the global aerospace company Airbus SE following its approval today by Dame Victoria Sharp, President of the Queen’s Bench Division.
Under the terms of the DPA, Airbus SE agrees to pay a fine and costs amounting to €991m here in the UK, and in total, €3.6bn as part the world’s largest global resolution for bribery, involving authorities in France and the United States.
The announcement comes a little under four years after the SFO began investigating the company over allegations that it had used external consultants to bribe customers to buy its civilian and military aircraft.
The indictment, which has been suspended for the term of the DPA, covers five counts of failure to prevent bribery. The conduct involves Airbus’ Commercial and Defence & Space divisions. The conduct covered by the UK DPA took place across five jurisdictions: Sri Lanka, Malaysia, Indonesia, Taiwan and Ghana between 2011 and 2015.
The Judge ruled today in a public hearing at the Royal Courts of Justice that the total sum (€983.97m plus the SFO’s costs of €6.9m) reflected the gravity of the conduct, the full cooperation of Airbus SE in the investigation, and the programme of corporate reform and compliance put in place by new leadership at the top of the company.
As part of the DPA, the company has agreed to full cooperation with the SFO and its law enforcement partners in any future investigations and prosecutions, and disclosure of any subsequent wrongdoing by the company or its employees, subject to applicable laws. If the company does not honour the conditions of the DPA the prosecution may resume.
Airbus SE has also reached a Convention Judiciaire d’Intérêt Public with the Parquet National Financier (PNF) and a Deferred Prosecution Agreement with the US Department of Justice and US Department of State today. In total, these agreements together with the SFO DPA require Airbus SE to pay approximately €3.6 billion (including €2,083,137,455 to the PNF and €525,655,000 to the US authorities) at the exchange rate at time of payment.
In her judgment, Dame Victoria Sharp said: “The seriousness of the criminality in this case hardly needs to be spelled out. As is acknowledged on all sides, it was grave. The conduct took place over many years. It is no exaggeration to describe the investigation it gave rise to as worldwide, extending into every continent in which Airbus operates. The number of countries subject to intense criminal investigation by the various agencies, and the scale and scope of the wrongdoing disclosed in the Statement of Facts demonstrate that bribery was to the extent indicated, endemic in two core business areas within Airbus.”
Lisa Osofsky, Director of the SFO, said: “Airbus paid bribes through agents around the world to stack the decks in its favour and win contracts around the globe. Corruption like this undermines free trade and fair development and it is to Airbus’s credit that it has admitted its culpability, cleaned its house and come forward to put this conduct to bed.
“A resolution of this scope would not have been possible without the commitment, determination and hard work of SFO staff and our French and American colleagues. We are also indebted to law-enforcement partners around the world for the support they provided in securing this record-breaking resolution.”
The SFO investigation remains active and the position in relation to individuals is being considered.
-- Airbus SE will pay €3,592,766,766 in total in respect of agreements in the UK, France and the US.
-- Under the Deferred Prosecution Agreement Airbus SE have agreed to:
* Disgorge profit of €585,939,740 to the SFO by 31 January 2023;
* Pay a fine of €398,034,571 to the SFO within 30 days. Both amounts will be transferred to the Consolidated Fund managed by HM Treasury.
* Pay the SFO’s investigative and legal costs of €6,989,401 within 30 days.
-- The DPA will be in force until 31 January 2023.
-- Arrangements for monitoring compliance with the conditions are set out in the terms of the DPA.
-- This is the seventh DPA agreed between the SFO and a company since they were introduced in 2013. The total value of all seven is approximately £1.53 billion (based on current exchange rate).
-- On 31 January 2020, an indictment was laid at the Royal Courts of Justice and suspended at the request of the SFO in light of the DPA. The indictment charges Airbus with five counts of failing to prevent bribery, contrary to Section 7 of the Bribery Act 2010.
-- The SFO announced its investigation into Airbus in August 2016.
-- Airbus SE is a Dutch and French domiciled company, registered in the Netherlands.
-- Airbus, the PNF in France and US Department of Justice are also releasing statements today.
-- The SFO was represented by James Lewis QC, Allison Clare, Katherine Buckle and Mohsin Zaidi.
Click here for the full DPA, judgment and Statement of Facts, on the SFO website.
Airbus Agrees to Pay over $3.9 Billion in Global Penalties to Resolve Foreign Bribery and ITAR Case
(Source: US Department of Justice; issued Jan 31, 2020)
Airbus SE (Airbus or the Company), a global provider of civilian and military aircraft based in France, has agreed to pay combined penalties of more than $3.9 billion to resolve foreign bribery charges with authorities in the United States, France and the United Kingdom arising out of the Company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the Company’s violation of the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in the United States. This is the largest global foreign bribery resolution to date.
Airbus entered into a deferred prosecution agreement with the department in connection with a criminal information filed on Jan. 28, 2020 in the District of Columbia charging the Company with conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) and conspiracy to violate the AECA and its implementing regulations, the ITAR.
The FCPA charge arose out of Airbus’s scheme to offer and pay bribes to foreign officials, including Chinese officials, in order to obtain and retain business, including contracts to sell aircraft. The AECA charge stems from Airbus’s willful failure to disclose political contributions, commissions or fees to the U.S. government, as required under the ITAR, in connection with the sale or export of defense articles and defense services to the Armed Forces of a foreign country or international organization. The case is assigned to U.S. District Judge Thomas F. Hogan of the District of Columbia.
“Airbus engaged in a multi-year and massive scheme to corruptly enhance its business interests by paying bribes in China and other countries and concealing those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This coordinated resolution was possible thanks to the dedicated efforts of our foreign partners at the Serious Fraud Office in the United Kingdom and the PNF in France. The Department will continue to work aggressively with our partners across the globe to root out corruption, particularly corruption that harms American interests.”
“International corruption involving sensitive U.S. defense technology presents a particularly dangerous combination. Today’s announcement demonstrates the Department’s continuing commitment to ensuring that those who violate our export control laws are held to account,” said Principal Deputy Assistant Attorney General David P. Burns of the Justice Department’s National Security Division (NSD). “The resolution, however, also reflects the significant benefits available under NSD’s revised voluntary self-disclosure policy for companies that choose to self-report export violations, cooperate, and remediate as to those violations, even where there are aggravating circumstances. We hope other companies will make the same decision as Airbus to report potential criminal export violations timely and directly to NSD so that they too can avail themselves of the policy’s benefits.”
“Today, Airbus has admitted to a years-long campaign of corruption around the world, said U.S. Attorney Jessie K. Liu of the District of Columbia. “Through bribes, Airbus allowed rampant corruption to invade the U.S. system. Additionally, Airbus falsely reported information about their conduct to the U.S. government for more than five years in order to gain valuable licenses to export U.S. military technology. This case exemplifies the ability of our prosecutors and law enforcement to work with our foreign counterparts to ensure that corruption around the world is prevented and punished at the highest levels.”
“Airbus SE, the second largest Aerospace company world-wide, engaged in a systematic and deliberate conspiracy, that knowingly and willfully violated U.S. fraud and export laws,” said Special Agent in Charge Peter C. Fitzhugh of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) New York. “Airbus’s fraud and bribery in commercial aircraft transactions strengthened corrupt airlines and bad actors worldwide, at the expense of straightforward enterprises. Additionally, the bribery of government officials, specifically those involved in the procurement of U.S. military technology, posed a national security threat to both the U.S. and its allies.
“The global threats facing the U.S. have never been greater than they are today, and HSI New York is committed to working with our federal and international partners to assure sensitive U.S. technologies are not unlawfully and fraudulently acquired. As this investigation reflects, national security continues to be a top priority not just for Department of Homeland Security, but for HSI New York.”
The Company’s payment to the United States will be $527 million for the FCPA and ITAR violations, and an additional 50 million Euros (approximately $55 million) as part of a civil forfeiture agreement for the ITAR-related conduct, and the department will credit a portion of the amount the Company pays to the Parquet National Financier (PNF) in France under the Company’s agreement with the PNF. In addition, the Company has agreed to pay a $10 million penalty to the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC), of which the department is crediting $5 million.
In related proceedings, the Company settled with the PNF in France over bribes paid to government officials and non-governmental airline executives in China and multiple other countries and the Company has agreed to pay more than 2 billion Euros (more than approximately $2.29 billion) pursuant to the PNF agreement.
As part of this coordinated global resolution, the Company also entered into a deferred prosecution agreement with the United Kingdom’s Serious Fraud Office (SFO) over bribes paid in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana, and the Company has agreed to pay approximately 990 million Euros equivalent (approximately $1.09 billion) pursuant to the SFO agreement. The PNF and SFO had investigated the Company as part of a Joint Investigative Team.
According to admissions and court documents, beginning in at least 2008 and continuing until at least 2015, Airbus engaged in and facilitated a scheme to offer and pay bribes to decision makers and other influencers, including to foreign officials, in order to obtain improper business advantages and to win business from both privately owned enterprises and entities that were state-owned and state-controlled. In furtherance of the corrupt bribery scheme, Airbus employees and agents, among other things, sent emails while located in the United States and participated in and provided luxury travel to foreign officials within the United States.
The admissions and court documents establish that in order to conceal and to facilitate the bribery scheme, Airbus engaged certain business partners, in part, to assist in the bribery scheme. Between approximately 2013 and 2015, Airbus engaged a business partner in China and knowingly and willfully conspired to make payments to the business partner that were intended to be used as bribes to government officials in China in connection with the approval of certain agreements in China associated with the purchase and sale of Airbus aircraft to state-owned and state-controlled airlines in China. In order to conceal the payments and to conceal its engagement of the business partner in China, Airbus did not pay the business partner directly but instead made payments to a bank account in Hong Kong in the name of a company controlled by another business partner.
Pursuant to the AECA and ITAR, the DDTC regulates the export and import of U.S. defense articles and defense services, and prohibits their export overseas without the requisite licensing and approval of the DDTC. According to admissions and court documents, between December 2011 and December 2016, Airbus filed numerous applications for the export of defense articles and defense services to foreign armed forces. As part of its applications, Airbus was required under Part 130 of the ITAR to provide certain information related to political contributions, fees or commissions paid in connection with the sale of defense articles or defense services.
The admissions and court documents reveal, however, that the Company engaged in a criminal conspiracy to knowingly and willfully violate the AECA and ITAR, by failing to provide DDTC with accurate information related to commissions paid by Airbus to third-party brokers who were hired to solicit, promote or otherwise secure the sale of defense articles and defense services to foreign armed forces.
As part of the deferred prosecution agreement with the department, Airbus has agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals, and to enhance its compliance program.
For the FCPA-related conduct, the department reached this resolution with Airbus based on a number of factors, including the Company’s cooperation and remediation. In addition, for the FCPA-related conduct, the U.S. resolution recognizes the strength of France’s and the United Kingdom’s interests over the Company’s corruption-related conduct, as well as the compelling equities of France and the United Kingdom to vindicate their respective interests as those countries deem appropriate, and the department has taken into account these countries’ determination of the appropriate resolution into all aspects of the U.S. resolution.
With respect to the AECA and ITAR-related conduct, the department reached this resolution with Airbus based on the voluntary and timely nature of its disclosure to the department as well as the Company’s cooperation and remediation.
HSI’s New York Field Office Counter Proliferation Investigations Group is investigating the case. Deputy Chief Christopher Cestaro, Assistant Chief Vanessa Sisti and Trial Attorney Elina A. Rubin Smith of the Criminal Division’s Fraud Section, Deputy Chief Elizabeth L. D. Cannon and Trial Attorney David Lim of the National Security Division’s Counterintelligence and Export Control Section, and Assistant U.S. Attorneys Michelle Zamarin, Gregg Maisel, David Kent and Karen Seifert of the District of Columbia are prosecuting the case. The Criminal Division’s Office of International Affairs provided assistance.
The Department of Justice acknowledges and expresses its appreciation of the significant assistance provided by France’s Parquet National Financier and the UK’s Serious Fraud Office.
The Fraud Section is responsible for all investigations and prosecutions of the Foreign Corrupt Practices Act, and conducts other investigations into sophisticated economic crimes. The Counterintelligence and Export Control Section supervises the investigation and prosecution of cases involving the export of military and strategic commodities and technology, including cases under the AECA and ITAR.