Bribery allegations exposed as Airbus agrees to pay record $4 billion fine
January 31 2020 08:11 PM
An Airbus A350-1000 performs during the 53rd International Paris Air Show at Le Bourget Airport near
An Airbus A350-1000 performs during the 53rd International Paris Air Show at Le Bourget Airport near Paris, France


* Record bribery fine follows almost years of investigation
* Airbus to face monitoring for three years, prosecutors say
* Deal with France, US and UK avoids corporate criminal charges 

European planemaker Airbus bribed public officials and hid the payments as part of a pattern of corruption that led to a record $4 billion bribery settlement with France, Britain and the United States, French prosecutors said on Friday.
The disclosure kicked off a day of transatlantic hearings to formally approve the settlements, lifting a legal cloud that has hung over Europe's largest aerospace group for years. It follows a nearly four-year investigation spanning sales to more than a dozen overseas markets.
Announcing the agreement - effectively a corporate plea bargain - France's financial prosecutor said the company had also agreed to three years "light compliance monitoring" by the country's anti-corruption agency.
The simultaneous settlements in Britain, France and the United States mean the European planemaker has avoided criminal prosecution.
"In reaching this agreement today, we are helping Airbus to turn the page definitively" on corrupt past practices, French prosecutor Jean-Francois Bohnert said, adding that the group could now "now look to its economic future with serenity".
As part of the deal, Airbus reached an agreement to settle corruption charges with France for 2.08 billion euros, France's financial prosecutor, Parquet National Financier (PNF), told a crowded hearing at the modern courthouse in northern Paris.
The planemaker would also pay around a 525 million euros fine to US Department of Justice and roughly 984 million euros to Britain's Serious Fraud Office (SFO), it said.
"It was a pervasive and pernicious bribery scheme in various divisions of Airbus SE that went on for a number of years," said US District Judge Thomas Hogan, approving the deal in a Washington court.
The US State Department said it had also fined Airbus $10 million to settle separate violations of export controls.
Airbus has been investigated by French and British authorities for suspected corruption over jet sales dating back more than a decade. It has also faced US investigations over suspected violations of export controls.
In a London court hearing, an Airbus lawyer said the settlements "draw a clear line under the investigation and under the grave historic practices".
In calculating the final amount, the French court reduced the public fines by half to reflect Airbus’s "exemplary cooperation" with the investigation, prosecutors said.
Aggravating factors included the "corruption of public officials," the repetition of breaches over a sustained period and the use of company resources to hide payments, they added.
The investigation examined transactions involving the United Arab Emirates, China, South Korea, Nepal, India, Taiwan, Russia, Saudi Arabia, Vietnam, Japan, Turkey, Mexico, Brazil, Thailand, Kuwait and Colombia, French prosecutors.
British prosecutors said Airbus failed to prevent individuals associated with the company from bribery involving Malaysia's AirAsia and AirAsia X, SriLankan Airlines, Taiwan's TransAsia Airways, Garuda Indonesia and Citilink Indonesia. They said the case also involved the sale of military aircraft to Ghana.
The overall deal, believed by anti-corruption experts to be the largest ever in a bribery case, ends an almost four-year crisis that led to a sweeping management overhaul, hampered sales and delayed plans to redeploy the firm's cash surplus.
While the size of the penalty is larger than some analysts expected, criminal charges would have risked the company being barred from public contracts in the United States and European Union - a massive blow for a major defence and space supplier.
French and US prosecutors said the deal covered Airbus only as a corporate entity and any current or former employees involved in related crimes could still be open to potential prosecution.
"With this settlement we've completed a first phase," French prosecutor Bohnert told reporters after the hearing. "Individuals remain answerable, and we are now going to have to examine individual responsibilities."
Britain's SFO last year abandoned attempts to prosecute individuals following what was then a record bribery settlement with engine maker Rolls-Royce in 2017.
At the centre of the case was a decades-old system of third-party sales agents run from a now-disbanded headquarters unit which at its height involved some 250 people and several hundreds of millions of euros of payments a year, sources familiar with the matter have said.
Airbus has said it halted payments in 2014 after discovering misleading and incomplete statements on the use of agents to Britain's' export credit agency and later took its findings to UK authorities, triggering a massive internal and external probe.
The probe has triggered an internal row over responsibility for lapses of control, with Airbus employees insisting they had no control over the choice of agents or offset deals handled under a separate entity, EADS, the former Airbus parent company.
Others say the system, whose roots go back decades to an era when payments to win deals were tolerated and tax-deductible, was an open secret in the company and French political circles where it was intertwined with influence-building abroad.

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