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European aerospace giant deferred prosecution agreement creates significant precedent for global corruption cases and settlements

On January, 2020, the Toulouse-based aircraft-maker admitted a series of corruption and bribery allegations regarding the company’s aircraft sales practices, as well as a misleading conduct containing civil violations in the exportation business related to the International Traffic in Arms Regulations (ITAR). The corruption allegations are based on an international investigation conducted by global prosecutors. The company was suspected of paying bribes in order to win large contracts around the world, which were paid by creating fraudulent contracts, accepting fake invoices for services not performed and creating false activity reports.

Airbus reached an agreement with the UK, US and French authorities compromising a total groundbreaking feature fine of €3,598 million, according to the company’s formal statement to the press. The fine is considered to be the biggest in the history of settlement agreements regarding corruption acts.

In further mention, the settlement agreements reached out with three main authorities: the UK Serious Fraud Office (SFO), the French Parquet National Financier (PNF) and the U.S Department of Justice (DOJ).

The authorities mentioned above are international regulators agencies which enforce and coordinate foreign bribery and corruption cases that have the potential of causing  harm to the economy.

A fourth deal was reached with the U.S Department of State (DOS) and is a Consent Agreement, in which Airbus agreed to settle all civil violations of the ITAR allegations, as well as retain an independent export control compliance officer, who will monitor the effectiveness of the company export control system and their compliance with ITAR.

Under the terms of the agreements reached, the European aerospace giant must pay a fine of € 2,083 million to the PNF, € 954 million to the SFO, € 526 million to the DOJ and € 9 million to the DOS. In addition, the company shall establish a reinforced compliance program.

This case sets French authorities as new player in the international scene regarding the fight against corruption. Since its new set of anti-corruption legislation – known as Sapin II – was introduced, France had never convicted a company directly under the charges of corruption and was known for having almost no record of corruption cases with international repercussion.

The Sapin II has 3 driving principles: promote transparency, strength fight against corruption and modernize the economy. The mentioned law introduced plea bargains to the French legal system and allowed companies that confess their wrongdoing and recognize their guilt in order to to avoid criminal conviction, as long as an agreement is reached, in which the company comes to terms to repair its actions and pays an often heavy fine. Moreover, inspired on the UK Bribery Act, passed in 2014, the Sapin II established criminal penalties to big companies that are unsuccessful in preventing corruption.

The Airbus case will also be remembered by two relevant particularities. First, the level of international cooperation, demonstrated by the truly global reach of the conducted investigations that resulted in the outcome of reaching a massive settlement simultaneously in all the jurisdictions involved in the case. Secondly, it is considered the first case to be conducted entirely by predictive coding software technology. Airbus cooperated fully with the authorities during investigations, disclosing more than 30 million documents that were analyzed by the machine learning technology.