On November 30, 2022, the Judicial Court of Paris (le tribunal judiciare de Paris) approved the deferred prosecution agreement (Convention Judicaire d’Intérêt Public or CJIP) involving Airbus SE. Stemming from three separate investigations, the CJIP between the company and the public prosecutor’s office pursuant to Articles 41-1-2 and 180-2 of the Code of Criminal Procedure imposes a fine of € 15,856,044. In addition, Airbus is required, under the CJIP to pay ANTICOR € 25,000 in damages and costs, and € 1 to SHERPA. Anticorp is a non-governmental organization concerned with corruption and ethics in politics, and Sherpa is a legal advocacy NGO.
According to the CJIP, between 2006 and 2011 a subsidiary of Airbus’ predecessor EADS NV used intermediaries to transfer € 6 million to gain access to the son of Muammar Qadhafi, the president of Libya, and his chief of staff, and seal a lucrative contract for the sale of 12 aircraft to the Libyan carrier Afriqiyah Airways. This transaction went forward despite the requirement by Airbus that the engagement of any commercial intermediary throughout the organization must be preceded by an audit by Airbus’ Strategy and Marketing Organization, which was responsible for international operations outside of western Europe.
A second focus of the investigation by French authorities was the sales activities of two Airbus Group companies in Kazakhstan, Astrium SAS and Eurocopter. According to the CJIP, Astrium concluded a deal with JSC NC Kazakhstan Gharysh Sapary (“KGS”), a state-owned company overseen by the Kazakhstan National Space Agency (“KazCosmos”) for the design of an assembly and testing center for satellites and other spacecraft. A joint venture was later formed for the purpose of providing technical support, equipment and testing facilities. Airbus and a German sister company of Astrium transferred € 696.253 to LBC Consulting, owned by an intermediary with close ties to the president of Kazakhstan, without any services rendered in return; a comfort letter was also signed whereby this intermediary was paid € 30,000 monthly and promised a 3% success commission on a contract for the sale of an earth observation system. In order to evade Airbus’ compliance procedures and pay the success commission as promised, Astrium signed a consultancy contract with an Irish company, Northbridge Financial Consultant Ltd, whose ultimate beneficial owner was LBC Consulting, owned by the intermediary who was introduced to the transaction by Airbus’ Strategy and marketing Organization (the latter was disbanded in 2015). In total, Airbus paid 9.771.044 euros to this intermediary without following the Airbus’ Strategy and Marketing Organization proceedings. Authorities in France concluded that the company’s conduct constituted the corruption of a foreign government official in violation of Article 435-3 of the criminal code.
Another transaction deemed improper by the PNF is the sale of helicopters to Kazakhstan through Airbus’ subsidiary Eurocopter pursuant to a framework agreement between Eurocopter and Kazakhstan Engineering. That contract may have been concluded as a quid pro quo for the termination of a criminal case in Belgium against another intermediary, a person close to the president of Kazakhstan – a violation of Article 433-1 of the criminal code, in the opinion of French prosecutors.
A third instance described in the CJIP involved commissions paid by Airbus to the director of an intermediary company called IPA, and the son of IPA’s director, a former official in the Ministry of Defense, which allowed the company to conceal the true nature of transactions with offshore entities in Luxembourg and intermediary’s payments to MECEA, a company located in Lebanon. The prosecutor concluded that these transactions could be classified as violations of Article 435-3 of the criminal code, namely the corruption of a foreign public official.
The fine amount takes into account the penalty paid by Airbus in its January 29, 2020 settlement with the PNF, the UK Serious Fraud Office and the US Department of Justice. Those concurrent settlements involved the payment of € 3,592,766,766, of which over € 2.08 billion were paid pursuant to the CJIP with French prosecutors, along with a three-year compliance obligation overseen by the Agence française anticorruption (AFA). At the time, the PNF considered as aggravating factors the repeated, widespread, serious and global nature of the misconduct and its long duration. A large fine was thus in the public interest.
The conduct now at issue took place over the same period as the misconduct addressed by the 2020 CJIP. Since the investigation began, Airbus has taken remedial measures to enhance compliance and prevent misconduct in the future, and has cooperated with the authorities. In light of these factors, the PNF deemed it appropriate to impose a fine of € 15,856,044, corresponding to the amount paid by Airbus to the suspect third parties in Libya and Kazakhstan. The amount is less than 30% of the company’s average sales over the past three years.
The current settlement represents the 14th CJIP entered into by French prosecutors since institution of the program in 2016 in conjunction with passage of the Sapin II law anti-corruption law. Guidelines for the assessment of financial penalties and the requirements for CJIPs were published by the Parquet National and the AFA in 2019.