Airbus will be able to turn the page, but at a high price: 2.1 billion euros to close the legal aspect in France and 1.5 billion euros in Great Britain and the United States to escape prosecution. French, British and American courts have validated, on Friday, January 31, the agreements that the European aircraft manufacturer concluded in order to avoid legal proceedings for alleged acts of corruption and for which it had just provisioned 3.6 billion euros .
The case has posed serious threats to Airbus since 2016, including a ban on access to public markets. It precipitated the change of the management team and undermined the internal functioning of the group, which has 134,000 employees.
Airbus announced on Wednesday that it had found a “Agreement in principle with the National Financial Prosecutor’s Office [PNF] French, the Serious Fraud Office [SFO] British and the United States “ who were jointly investigating “Irregularities” relating in particular to commercial agents involved in aircraft sales contracts.
At these “Corruption charges” for the United States are added “Inaccurate statements made to the United States authorities under the United States Military Equipment Export Regulations [ITAR] “, according to the aircraft manufacturer.
“Inaccuracies and omissions”
Since 2017, the PNF has concluded five such agreements, in particular with the banks HSBC and Société Générale, for a total amount of € 1.08 billion fine. The penalty, which does not constitute recognition of guilt, should therefore swallow up part of the profits of Airbus, which had posted a net profit of 3.1 billion euros in 2018 and will present its annual results on February 13. But it allows the group to leave this affair behind, while its competitor Boeing remains entangled in the crisis of the 737 MAX which cost it 18.4 billion dollars at this stage.
The case arose out of the self-reporting of irregularities in 2016 by the then manufacturer’s owner, Thomas Enders, to the SFO. The group wanted to protect itself from possible lawsuits, especially American, by collaborating with the judicial authorities.
This strategy was tested by the British engine manufacturer Rolls-Royce, who was sentenced in early 2017 to pay a fine of 763 million euros to the British, American and Brazilian judicial authorities in order to settle a corruption case abroad after having himself denounced the facts to the SFO at the end of 2012.
In 2014, Airbus compliance services began to update “Inaccuracies and omissions regarding the information provided” to British, French and German export credit insurance agencies to guarantee certain contracts, according to Airbus.
The aircraft manufacturer noted in particular that a number of transactions carried out by an internal entity, called the Strategy and Marketing Organization (SMO), were not in compliance. The SMO, which was responsible for managing intermediaries in contracts with certain countries, has since been dissolved. The SFO and PNF opened their investigation in the summer of 2016, followed the following year by the United States Department of Justice (DoJ).
At the same time, American justice suspected Airbus of not having obtained the necessary authorizations to export armaments containing American components. To facilitate negotiations, the group had decided in late 2017 to reshuffle its management. The head of the civil aviation branch, Fabrice Brégier, left office in February 2018, and Thomas Enders was replaced in April 2019 by Guillaume Faury. Executives potentially involved in the case are not protected from prosecution.
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