Britain’s BAE Systems plc yesterday pleaded guilty in a federal court to several violations and agreed to pay a $400 million fine, one of the largest criminal fines ever in the U.S. against a business, the Department of Justice (DoJ) announced.
The company pled guilty to charges of fraud, making false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Control Export Act and International Traffic in Arms Regulations.
“The actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption and to maintain control over sensitive U.S. technology,” Acting Deputy Attorney General Gary Grindler said in a statement. He also said that “The remediation measures BAE Systems has undertaken, in conjunction with its agreement to retain an independent compliance monitor, are evidence supporting BAE Systems’ stated commitment to ensure that it operates in a transparent, honest and responsible manner going forward.”
The DoJ noted that none of the criminal activity in the company’s plea involved the actions of its U.S.-based subsidiary, BAE Systems Inc.
Among the charges BAE faced included willfully not creating mechanisms to secure compliance with the FCPA, which led to the company gaining $200 million in business. The FCPA prohibits bribing foreign government officials in order to generate business.