The Department of Justice last Friday said that Airbus Group has agreed to pay the U.S. government $592 million to settle bribery and corruption charges related to commercial aircraft sales and violations of arms control laws.
The settlement with the U.S. is part of a larger $3.9 billion agreement with legal authorities in France and Britain to settle bribery and corruption allegations. In return, the governments of all three companies agreed to suspend prosecution of Europe-based Airbus for three years, and if the company maintains compliance with the settlement agreements during that period, respective prosecution actions will be terminated.
The DoJ said its deferred prosecution agreement relates to violations of the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) and the Arms Export Control Act and its implementing regulations, the International Traffic in Arms Regulations (ITAR) in the U.S.
The FCPA violations stem from the company’s effort to pay bribes to foreign officials, including Chinese officials, to generate and retain business, such as aircraft sales, the DoJ said. The export control violations relate to the failure to disclose political contributions or fees to the U.S. as required by the regulations for the sale or export of weapons and defense services to foreign military or international organizations, it also said.
Airbus SE, the second largest aerospace company worldwide, engaged in a systematic and deliberate conspiracy, that knowingly and willfully violated U.S. fraud and export laws,” Peter Fitzhugh, special agent in charge of the Department of Homeland Security Immigration and Customs Enforcement’s Homeland Security Investigations New York, said in a statement. “Airbus’ 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 settlement with the U.S. includes a $527 million payment for the FCPA and ITAR violations, and another $55 million to cover a civil forfeiture agreement with ITAR-related conduct. Airbus will also pay the State Department’s Directorate of Defense Trade Controls $10 million also related to ITAR violations. Of the $10 million payment, $5 million is suspended on the condition the company takes department-approved remedial compliance actions.
Airbus said it has taken steps to reform its conduct and enhance compliance.
“The settlements we have reached today turn the page on unacceptable business practices from the past,” Denis Ranque, chairman of Airbus, said in a statement. “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 allegations against Airbus relate to actions by the company between 2008 and 2016.