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Airbus Agrees To Settlement With US, UK And French Regulators Over Corruption Charges


01/28/2020


Airbus Agrees To Settlement With US, UK And French Regulators Over Corruption Charges
The European plane maker Airbus is set to potentially face billions of dollars in penalties as it has agreed to come to a settlement with regulators in the United Kingdom, France and the United States in relation to a bribery and corruption probe.
 
An agreement in principle over charges of bribery and corruption as for compliance with US arms trafficking regulations has been reached by Airbus, the company said in a statement. However the company said that the courts of the three countries and US regulators need to approve the agreement.
 
No further details about the settlement agreement were given by Airbus. However analysts anticipate that the settlement charges could be as high as more than €3 billion because of the complexity of the charges and negotiations.
 
If the settlement goes through, it would eclipse the £671 million plea bargain that was achieved by Rolls-Royce to settle similar allegations in 2017. At that time, the regulators in the UK had imposed a record fine on the company of about £500 million - the largest ever by UK regulators over criminal conduct allegations.
 
The Airbus and the UK Serious Fraud Office are working together to reach a so-called deferred prosecution agreement, said reports quoting sources. If this is achieved, it would be a notable achievement for the regulator after a series of failures.   
 
If companies agree to admit to undertaking wrong acts, agree to overhaul their businesses, and pay a penalty, it is possible for them to avoid criminal prosecution under a corporate plea deal. Six DPAs have been signed by the SFO so far but has been criticized of such deals not being able to convict senior executives of the companies involved.
 
The corruption probes have been ongoing for about four years which has seen the company firing some senior executives even though they were not directly implicated in the wrongdoing. The deal will bring an end to the probes. The company had fired some senior executives because it believed that an entirely new senior management team in the company would put it in a better position to win a settlement deal. What worked in the company’s favor was that a number of those executives were nearing retirement. Last spring, Tom Enders, chief executive, and Fabrice Brégier, chief operating officer, both stepped down.
 
The other measures that the company undertook included strengthening its ethics and compliance procedures, setting up of a new independent review panel which is comprised of outside experts, and had drastically brought down the number of third-party agents that the company uses to secure deals.
 
Following the revelation by Airbus in 2016 that irregularities in disclosures about third-party consultants used on certain aircraft deals, a probe was launched by the SFO. The next year its probe was launched by Parquet National Financier, the French regulator. The US US Department of Justice launched its own investigations in 2018.
 
(Source:www.ft.com)