Record penalties as Airbus admits ‘endemic’ bribery
Plane maker faces €3.6bn settlement to end global inquiry into ‘middlemen’ used to secure sales
AIRBUS will pay a series of recordbreaking settlements including nearly €1bn (£840m) to the UK’S fraud office after admitting to “endemic” levels of bribery across its international business.
The UK payment of €991m is the biggest victory yet for the Serious Fraud Office, dwarfing a £497m penalty handed over by Rolls-royce in 2017.
The size of the penalty is a feather in the regulator’s cap given some intense criticism following the collapses of other high-profile prosecutions.
The European plane maker will also pay €2.1bn in France and €530m in the US to end international investigations into allegations it used corrupt “middlemen” to secure aircraft sales.
The €3.6bn total fee, signed off by judges yesterday, is also far bigger than the previous global record settlement, when Brazilian engineering group Odebrecht agreed to pay $2.6bn (£2bn) to end bribery investigations brought by domestic, US and Swiss authorities.
The SFO announced its investigation in 2015, which was subsequently joined by France’s Parquet National Financier, and the US State Department. “The criminality involved was grave,” Dame Victoria Sharp, president of the Queen’s Bench, told the High Court.
“The weakness of senior corporate oversight, and the seriousness of the offending overall, must be considered in the context of the increased awareness internationally of the pernicious nature of corrupt business practices.”
The settlement – known as a “deferred prosecution agreement” (DPA) – is effectively a suspended sentence that allows Airbus to avoid a criminal conviction. This could have blocked it from doing deals in many countries.
Lisa Osofsky, director of the SFO, said: “Airbus paid bribes through agents around the world to stack the decks in its favour and win contracts. Corruption like this undermines free trade and fair development.”
Ms Osofsky added that with the DPA, Airbus has “admitted its culpability, cleaned its house and come forward to put this to bed”.
Guillaume Faury, Airbus chief executive, said the agreements were a “milestone” that allowed the company to “move forward and grow in a sustainable and responsible way”. Legal documents attached to the settlement revealed instances of bribery, including Airbus paying $50m and offering $55m more to sponsor a sports team linked to two unnamed executives described as “key decision makers” at Airasia and Airasiax. The airlines ordered 180 aircraft from Airbus.
An email from one of the airline executives to a senior Airbus employee referred to him being “fed up. You owe me 4m already and I’m owed 16m in total. This should have been paid ages ago when I bought the first 60 aircraft. I want my money,” it said.
The DPA covers five counts of failure to prevent bribery, involving Airbus’s airliner unit and its defence and space arm. The UK portion of the deal relates to bribery allegations in Sri Lanka, Malaysia, Indonesia and Taiwan involving airliner sales and Ghana buying military aircraft. The alleged bribery took place between 2011 and 2015.
A simultaneous court hearing to settle the French part of the DPA heard the company paid bribes in 16 countries to land airliner contracts and boost its profits. Airbus made payoffs in countries including Russia, China and Taiwan to boost profits by €1bn, the French prosecutor told the court.
As part of the settlement Airbus will accept three years of “compliance monitoring” by French authorities.
The settlement could have been larger, but was discounted to reflect Airbus’s co-operation with authorities.