On January 31, 2020, the Department of Justice (DOJ) announced that France-based Airbus SE agreed to pay approximately $3.9 billion to resolve foreign bribery charges with authorities from the United States, the United Kingdom, and France and to resolve the Company’s violations of the International Traffic in Arms Regulations (ITAR).
In the United States, Airbus was charged with conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) and conspiracy to violate the Arms Export Control Act (AECA) and its implementing regulations, the ITAR. The FCPA charge arose out of Airbus’s scheme to offer and pay bribes to foreign officials, including Chinese officials, in order to obtain and retain business, including contracts to sell aircraft. The AECA charge stems from Airbus’s willful failure to disclose political contributions, commissions or fees to the U.S. government, as required under the ITAR, in connection with the sale or export of defense articles and defense services to the Armed Forces of a foreign country or international organization.
From approximately 2008 until around 2015, Airbus used third-party business partners to approach government representatives and other influential individuals from various countries, including the People’s Republic of China, with incentives to solidify business with both private and state-owned entities.
In furtherance of the scheme, Airbus intentionally concealed these relationships, violating the ITAR’s requirements to disclose political contributions. The Company engaged multiple third-party business partners to assist in this portion of the scheme, funneling payments through these entities in order to hide its relationships with state-owned or -controlled organizations. Then, when filing license applications with the State Department, Airbus failed to provide accurate information related to the commissions paid to these third-party brokers, who were hired to solicit, promote, or secure sales of defense articles and services.
In order to resolve its U.S. charges, Airbus entered into a deferred prosecution agreement with U.S. officials, where the Company will pay $527 million in penalties related to the FCPA and ITAR, as well as an additional $55 million as a civil forfeiture for all ITAR-related violations and another $10 million to the State Department’s Directorate of Defense Trade Controls.
U.S. officials allowed France and the U.K. to take the lead in this large-scale investigation, and all three countries considered each other’s decisions when finalizing their settlements with Airbus. In addition, although the fines imposed are unprecedented, the Department of State did in fact mitigate its punishment on Airbus in part due to the company’s voluntary and timely disclosure, as well as its cooperation and new compliance efforts in regards to the ITAR violations.
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