Airbus Fined Billions Due to Corruption

Photo by Karam Sodhi | AeroNewsX.

Details have emerged of activities inspected by fraud investigators, with legal authorities adjudicating an adjourned prosecution arrangement with Airbus labelling bribery linked to its commercial and defence aircraft divisions as “endemic”.

The company has been fined approximately €3.6 billion to resolve multiple allegations from French, British, and American authorities. While the largest portion of the fine (€2 billion) is covered by a French arrangement, court approval of the UK portion of the fines, over €990 million, came with a statement of facts about the offences of failure to prevent bribery.

The court document states that sponsorship payments were made to a sporting team owned by executives of AirAsia, however, unrelated to AirAsia and AirAsia X.

These payments were “intended to secure or reward improper favour” for orders covering 180 aircraft.

The orders included the AirAsia deal for 55 Airbus A330neos in 2014, as well as earlier orders for 25 A330s, 64 A320neos and 36 A320s.

The delivery of six A330s and four A350s to SriLankan Airlines has been linked to a $16.8 million payment offer to an airline executive’s wife through a company which was approved by Airbus as a business partner, hence, influencing the purchase. The wife’s identity was later discovered to be disguised to mislead a UK export credit agency.

Executives at Garuda Indonesia, its LCC Citilink, and TransAsia Airways also received similar payments intended to “reward improper favour”. The Garuda orders linked to the bribes include 15 A330s and 40 A320s, while the TransAsia orders cover two A330s and 18 A321 and A321neos.

Communication between Airbus and a negotiator regarding TransAsia took the form of “coded emails” which referred to participants using false names, most notably discussing “medications and dosages” prescribed by a ‘doctor’ to the ‘patient’ with numbers which accurately represented payments from Airbus to the negotiator and onward to an executive at TransAsia Airways.

“Airbus paid bribes through agents around the world to stack the decks in its favour and win contracts around the globe,” says Serious Fraud Office Director Lisa Osofsky.

The €991 million fine in the UK case consists of a disgorgement of profit of almost €586 million and a penalty of €398 million. The US section of the fine adds up to €526 million. The Department of Justice stated that the manufacturer offered to pay foreign individuals, including Chinese officials, in order to obtain and retain business.

Assistant Attorney General Brian Benczkowski says the bribery scheme was “multi-year and massive” and designed to “corruptly enhance” Airbus’ business position.

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