export-controls 06 February 2020

Airbus to make jumbo payout to settle ITAR, AECA and FCPA violations

Airbus is to pay nearly $4bn to settle allegations of breaches of anticorruption and export control regulations, the US Department of Justice (‘DoJ’) announced on 31 January. The aviation giant has also entered into a deferred prosecution agreement ‘in connection with a criminal information filed on Jan. 28, 2020 in the District of Columbia charging the Company with conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) and conspiracy to violate the AECA and its implementing regulations, the ITAR.’

The fines are to be paid to US, UK and French authorities and, says the DoJ, arise ‘out of the Company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the Company’s violation of the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in the United States…

‘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.’

Principal Deputy Assistant Attorney General, David P. Burns of the DoJ’s National Security Division (‘NSD’) said: ‘International corruption involving sensitive U.S. defense technology presents a particularly dangerous combination. [The] announcement demonstrates the Department’s continuing commitment to ensuring that those who violate our export control laws are held to account.

‘The resolution, however, also reflects the significant benefits available under NSD’s revised voluntary self-disclosure policy for companies that choose to self-report export violations, cooperate, and remediate as to those violations, even where there are aggravating circumstances. We hope other companies will make the same decision as Airbus to report potential criminal export violations timely and directly to NSD so that they too can avail themselves of the policy’s benefits.’

In a statement, Airbus said it had ‘taken significant steps to reform itself and to ensure that this conduct will not reoccur. Airbus has significantly enhanced its compliance system under the supervision of an Independent Compliance Review Panel. The Company is committed to conducting business with integrity.’

Denis Ranque, Chairman of the Board of Directors of Airbus, said, ‘The settlements we have reached today turn the page on unacceptable business practices from the past. The strengthening of our compliance programmes at Airbus is designed to ensure that such misconduct cannot happen again. The agreements also reflect that the decision to voluntarily report and cooperate with the authorities was the right one.’

See: https://www.justice.gov/opa/pr/airbus-agrees-pay-over-39-billion-global-penalties-resolve-foreign-bribery-and-itar-case