Out-Law News 3 min. read
05 Feb 2020, 12:57 pm
The fines include €991m payable in the UK following a deferred prosecution agreement (DPA) with the Serious Fraud Office (SFO). The DPA was confirmed by a judge last week. Airbus has also reached similar agreements in France and the US and must pay over €2bn to the French Parquet National Financier (PNF) and €525.7m to the US authorities.,
Dr. Eike W. Grunert
Airbus is a noteworthy case on the challenges corporations with global activity face in handling multinational investigations, and how regulators increasingly collaborate on an international basis today
The UK settlement, which includes costs, is greater than the total of all other sums paid following DPAs since the UK introduced the system six years ago.
The SFO began investigating Airbus just under four years ago over allegations that its associates, who were largely external intermediaries, had paid bribes to secure sales of its civilian and military aircrafts.
Airbus’ Commercial and Defence & Space divisions were charged with five counts of failure to prevent bribery. The SFO said the conduct covered by the UK DPA took place across Sri Lanka, Malaysia, Indonesia, Taiwan and Ghana, between 2011 and 2015.
In a statement, Airbus said: "Airbus has 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."
Corporate compliance expert Eike Grunert of Pinsent Masons, the law firm behind Out-Law, said: “Airbus is a noteworthy case on the challenges corporations with global activity face in handling multinational investigations, and how regulators increasingly collaborate on an international basis today. This resembles, for example, the Siemens corruption scandal back in 2008 which was resolved between German and US regulators and closed, with settlements and press releases, on the same day, virtually in the same minute, orchestrated by the company and its defence counsel.”
Paris-based Matthieu Querry of Pinsent Masons said: “This case demonstrates the level of commitment shown by the regulators involved to ensure a coordinated response to the wrongdoing uncovered, sending a clear message that international cooperation is a real and effective tool.”
Senior Practice Development Lawyer
Organisations which uncover misconduct must take note and consider carefully which regulators in which jurisdictions should be informed. Differing jurisdictional rules, for example on matters such as privilege, will need specialist advice from the start
Confirming the order in the UK (32 page / 309KB PDF), High Court judge Dame Victoria Sharp said the criminality involved was “grave” and that Airbus did not have adequate procedures in place to prevent people associated with the company from carrying out the criminal conduct they were accused of. The SFO said that the level of fine set by the court in the DPA "reflected the gravity of the conduct, the full cooperation of Airbus SE in the investigation, and the programme of corporate reform and compliance put in place by new leadership at the top of the company".
Compliance expert Fiona Cameron of Pinsent Masons said the scale of the settlement underlined the extent to which regulators in the UK, France and US as well as other jurisdictions were prepared to cooperate in the pursuit of wrongdoing.
“Organisations which uncover misconduct must take note and consider carefully which regulators in which jurisdictions should be informed. Differing jurisdictional rules, for example on matters such as privilege, will need specialist advice from the start,” Cameron said.
Cameron said Dame Victoria had emphasised the importance of incentivising the exposure and self-reporting of corporate wrongdoing, but that the Airbus case also showed that a failure to self-report is not necessarily fatal to a DPA "if subsequent self-reporting or cooperation overall, is of a high quality and brings significant wrongdoing to light that would not otherwise have come to the attention of the authorities".
In this case, after what Dame Victoria described as a “slow start”, Airbus was said to have cooperated to the fullest extent, notably accepting that the Bribery Act 2010 provided the SFO with extended extraterritorial powers and meeting many of the standards set out in the SFO's corporate cooperation guidance published last August. This included adopting a "cooperative position in relation to privilege" as well as listing documents withheld on the basis of privilege with reasons for so doing "which were verified by the SFO". The company also provided external accountants and internal personnel to present and explain financial processes and money flows.
“Following the SFO's guidance on evaluating compliance programmes, published earlier this year, the court’s emphasis on Airbus' compliance programme and its compliance culture before, during and after the period of wrongdoing is unsurprising," Cameron said. "Airbus has been able to point to its early recognition of failures and to the strengthening of its programme and culture throughout that period and beyond.”
The identity of the individuals allegedly involved in the Airbus case has not been revealed, although the SFO said its investigation remained active and the position in relation to individuals was being considered.
In France, anti-corruption authority the AFA will conduct targeted audits over the next three years to ensure the full deployment of the compliance programme committed to by Airbus in its agreement with the PNF across the entities and subsidiaries of the group.
08 Aug 2019