Home News SFO enters into €991 million DPA with Airbus as part of €3.6 billion resolution

SFO enters into €991 million DPA with Airbus as part of €3.6 billion resolution

by Brian Sims

The Serious Fraud Office (SFO) has entered into a record-breaking Deferred Prosecution Agreement (DPA) with the global aerospace company Airbus SE following its approval by Dame Victoria Sharp, President of the Queen’s Bench Division. Under the terms of the DPA, Airbus SE has agreed to pay a fine and costs amounting to €991 million here in the UK and, in total, €3.6 billion as part of the world’s largest global resolution for bribery involving authorities in France and the United States.

The announcement comes a little under four years after the SFO began investigating the company over allegations that it had been using external consultants to bribe customers to buy its civilian and military aircraft.

The indictment, which has been suspended for the term of the DPA, covers five counts of failure to prevent bribery. The conduct involves Airbus’ Commercial and Defence and Space divisions. The conduct covered by the UK DPA took place across five jurisdictions (Sri Lanka, Malaysia, Indonesia, Taiwan and Ghana) between 2011 and 2015.

The Judge ruled in a public hearing at the Royal Courts of Justice that the total sum (€983.97 million plus the SFO’s costs of €6.9 million) reflected the gravity of the conduct, the full co-operation 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.

As part of the DPA, the company has agreed to full co-operation with the SFO and its law enforcement partners in any future investigations and prosecutions, as well as disclosure of any subsequent wrongdoing by the company or its employees, subject to applicable laws.

If the company doesn’t honour the conditions of the DPA then the prosecution may resume.

Seriousness of the criminality

Airbus SE has also reached a Convention Judiciaire d’Intérêt Public with the Parquet National Financier (PNF) and a DPA with the US Department of Justice and the US Department of State. In total, these agreements together with the SFO DPA require Airbus SE to pay approximately €3.6 billion (including €2,083,137,455 to the PNF and €525,655,000 to the US authorities) at the exchange rate at time of payment.

Lisa Osofsky

Lisa Osofsky

In her judgement, Dame Victoria Sharp said: “The seriousness of the criminality in this case hardly needs to be spelled out. As is acknowledged on all sides, it was grave. The conduct took place over many years. It’s no exaggeration to describe the investigation it gave rise to as worldwide, extending into every continent in which Airbus operates. The number of countries subject to intense criminal investigation by the various agencies, and the scale and scope of the wrongdoing disclosed in the Statement of Facts, demonstrate that bribery was to the extent indicated, endemic in two core business areas within Airbus.”

Lisa Osofsky, director of the SFO, observed: “Airbus paid bribes through agents around the world to stack the decks in its favour and win contracts around the globe. Corruption like this undermines free trade and fair development. It’s to Airbus’ credit that it has admitted its culpability, cleaned its house and come forward to put this conduct to bed. A resolution of this scope would not have been possible without the commitment, determination and hard work of SFO staff and of our French and American colleagues. We’re also indebted to law enforcement partners around the world for the support they provided in securing this record-breaking resolution.”

The SFO investigation remains active, with the position in relation to individuals being considered.

Jumping through hoops

Aziz Rahman, senior partner at business crime solicitors Rahman Ravelli, has commented: “This can be viewed as one more case where one of the big boys has escaped prosecution by jumping through hoops and opening its large corporate wallet to avoid a conviction that would hamper its ability to compete in the marketplace, but there are aspects of this case that mark it out as different from many where DPAs have been concluded. It has been a high stakes investigation over four years. Three court hearings in three nations in one day underline that this investigation involved extensive international co-operation and co-ordination. Airbus stood to lose a lot if this issue was not concluded as it has been.”

Aziz Rahman

Aziz Rahman

Rahman continued: “The British element of it being 983 million Euros makes it the UK’s biggest-ever DPA. It’s a case that confirms the SFO as one of the world’s major players alongside the US Department of Justice. The SFO was the first agency to investigate Airbus: a year before France and two before the US. The UK was the first European country to introduce DPAs. This one can be seen as a quick, big win for the SFO which, under director Lisa Osofsky, is looking to close investigations as quickly as possible. It remains to be seen if individuals will be prosecuted.”

In addition, Rahman told Risk Xtra: “While the current senior Airbus figures may now sleep soundly, it seems that big companies are coming to see self-reporting and obtaining DPAs as nothing more than the cost of doing business. Nobody from any of the seven companies thus far granted DPAs has been successfully prosecuted. There seems to be a problem in the UK when it comes to successfully prosecuting individuals for corporate crime.”

He added: “In Airbus’ defence, it isn’t the only aerospace offender. Rolls-Royce’s bribery problems showed this. The last 30 years has seen Boeing paying out hundreds of millions of dollars due to illegally obtaining classified documents, improperly using competitors’ information, overcharging and performing defective work. Airbus’ wrongdoing may not be on a similar scale as its US competitor, but its treatment by the SFO hardly hits new heights when it comes to tackling and deterring business crime.”

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