Airbus to Pay $4 Billion to Resolve Global Bribery Charge

*By Richard Montes De Oca and **Claudia Herbello
On January 31, 2020, Airbus SE, a multinational aerospace and the world’s second-largest plane manufactures (Airbus), agreed to pay a total of $4 billion in penalties for charges of transnational bribery, including violations of the Foreign Corrupt Practices Act (FCPA) and the Arms Export Control Act (AECA) implemented by the International Traffic in Arms Regulations. The settlement was part of the terms of the deferred prosecution agreement (DPA) they entered in order to avoid criminal prosecution. The fine was paid out as follows: $1.1 billion to the U.K.’s Serious Fraud Office (SFO), $2.33 billion to France’s Parquet National Financier, and $583 million to the U.S. Department of Justice and U.S. Department of State.
The bribery charges were brought against Airbus due to its use of intermediaries to bribe government officials and airline executives between 2008 and 2015 in order to win high-value contracts in 20 countries around the world, including China, Sri Lanka, Malaysia, Taiwan, Indonesia, and Ghana. The Airbus executives concealed payments through loan schemes and mischaracterized payments in the company’s books and records in order to mak ethe bribes. The DPA will be in force until January 31, 2023, and requires Airbus to make improvements to its ethics and compliance policies and procedures. Airbus must also adopt comprehensive initiatives aimed at changing the Airbus culture.
In an effort to change its culture, Airbus has replaced senior management executives, including the CEO, CFO, and General Counsel. Furthermore, it has created a subcommittee of the Board, titled the Ethics and Compliance Committee, which will provide oversight of the company’s compliance program. Airbus has also revised its Code of Conduct and hired external compliance professionals to help the new subcommittee with the culture change. Apart from these steps, Airbus must also cooperate fully and honestly with all pre-investigations, investigations, and prosecutions brought by the U.K.’s SFO.
*Richard Montes De Oca is Managing Partner at MDO Partners, a boutique law firm that focuses on Corporate, International, and Real Estate Law, as well as Global Compliance and Business Ethics.
**Claudia Herbello serves as one of MDO Partners’ Associate Counsel. Herbello is a corporate law attorney with experience in Corporate Governance, Mergers and Acquisitions Transactions, Corporate formation, as well as Global Compliance and Business Ethics.