January 31, 2020

Airbus finalizes the largest global bribery settlement in history

On January 31, 2020, global aerospace company Airbus SE settled foreign bribery charges with authorities in the United Kingdom, France, and the United States.  Altogether, the company will pay over $3.99 billion in global penalties.

In the UK, Airbus entered into a three-year deferred prosecution agreement with the SFO.  Under the terms of the DPA, Airbus agreed to pay €991 million (approximately $1.1 billion), comprised of €585,939,740 in disgorgement, a fine of €398,034,671, and €6,989,401 for SFO costs.  In the indictment, Airbus is charged with five counts of failing to prevent bribery in violation of Section 7 of the Bribery Act 2010.  

In order to facilitate the investigation and to overcome the information transfer hurdles posed by the French blocking statute, Law No. 68-678 of 26 July 1968, the SFO entered into a joint investigation team agreement with the Parquet National Financier.  The UK investigation focused on the conduct of two divisions of Airbus — the commercial division and the defense division — in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana.  According to the statement of facts stipulated by the parties, Airbus made hundreds of millions of dollars in illegal payments in the form of sponsoring a sports team jointly owned by an official of Air Asia, kickbacks to airline executives, and consulting fees to relatives of government airline officials and executives of a government-owned airline, in order to secure and retain business with the airlines.  Various schemes were used to conceal the nature of the payments and the identity of the recipients.  For example, in Taiwan, Airbus made payments to the company of an intermediary, using aliases such as Fu Fu and Van Gogh and describing the payments as dosages for prescription medications, for example “54.0mg” or “25.9mg.”  

The French element of the global settlement requires the payment of almost €2.1 billion according to the terms of a convention judiciaire d’intérêt public (CJIP).  Like the UK and US DPAs, the  CJIP has a three-year duration.  Pursuant to the joint investigation team agreement, the PNF investigation focused on Airbus’s conduct in the United Arab Emirates, China, South Korea, Nepal, India, Taiwan, Russia, Saudi Arabia, Vietnam, Japan, Turkey, Mexico, Thailand, Brazil and Kuwait.  The CJIP is the sixth such agreement entered into by French authorities, and the penalty is the largest ever imposed in France.

In the United States, Airbus entered into a three-year deferred prosecution agreement with the Department of Justice, agreeing to pay $527 million for violations of the Foreign Corrupt Practices Act and the International Traffic in Arms Regulations (ITAR).  In addition, Airbus will pay a penalty of $10 million to the Directorate of Defense Trade Controls (DDTC) of the US Department of State.  According to court documents and admissions by the company, Airbus used a complex system of payments through third party agents and Korean and Hong Kong bank accounts to pay bribes to Chinese government officials in order to obtain improper business advantages and to win business.  As part of the bribery scheme, Airbus employees and agents provided foreign officials with luxury travel in the United States, and used systems of communication from inside the US in order to advance the scheme. The ITAR offenses are a result of Airbus’s failure to provide accurate information to the DDTC about commissions paid to Airbus by brokers engaged to secure contracts for the sale of defense equipment and services to foreign armed services.

In reaching the FCPA settlement with Airbus, the DOJ took into consideration the company’s continued cooperation and remediation, as well as the interests of France and the UK in investigating and prosecuting Airbus’s corrupt conduct.  Each of the prosecuting authorities took responsibility for a specific geographical area.

The DPAs and CJIP, as well as the consent agreement with the US Department of State, require Airbus’s continued cooperation as the investigation continues, potentially including the prosecution of individuals. 

SFO press release | DPA (UK) | Statement of Facts (UK)

PNF press release | CJIP | Ordonnance de Validation

DOJ press release | DPA (US)