Bribery and corruption are pervasive issues that have severe consequences for both businesses and society as a whole. They undermine fair competition, erode public trust, and hinder economic growth. The Airbus bribery and corruption case is a precedent for all corporates with a record-setting penalty, a global settlement, and several lessons for in-house counsel, compliance professionals, and other anti-corruption and investigations practitioners.

Let us examine the allegations of wrongdoing and the subsequent legal implications under the Foreign Corrupt Practices Act (FCPA) of the United States and the Bribery Act 2010 (UKBA) of the United Kingdom.

Summary of Events

Airbus reached an agreement with authorities in the United States, France, and the United Kingdom, in January 2020 to pay nearly $4 billion and implement various remedial measures to address alleged corruption violations. This settlement involved multiple entities, including the French National Financial Prosecutor's Office (Parquet National Financier - PNF), the United Kingdom's Serious Fraud Office (SFO), the U.S. Department of Justice (DOJ), and the U.S. Department of State, marking the largest combined anti-corruption resolution to date. The accusations of corrupt behavior encompassed several airline and government clients.

From 2008 to 2015, Airbus enlisted the services of numerous commercial intermediaries and paid bribes to government officials from different countries to support its commercial negotiations with different countries and private customers. Despite Airbus's internal policies mandating approval by an internal committee and monitoring to ensure the independence of these intermediaries, the investigations uncovered instances where the information provided to the committee was incomplete, misleading, or inaccurate.

Consequently, Airbus engaged in simultaneous agreements as a result of the collaborative investigation. These include the Convention Judiciaire d’Intérêt Public (CJIP) with the French authorities and Deferred Prosecution Agreements (DPA) with the SFO and DOJ.

Defaults and Penalties under UKBA

The SFO investigation focused on wide-ranging bribery schemes of government officials and private corporate directors and executives in several South-East Asian countries and in Ghana, and Mexico, particularly through the use of third-party business partners and intermediaries in violation of the UKBA. According to the U.K. DPA, despite Airbus's then-existing compliance protocols intended to prevent the conduct in question, Airbus employees and executives avoided the compliance programs by providing false information regarding relations of its business partners and customers to the internal corporate organization responsible for evaluating due diligence. In some cases, the individuals involved in the misconduct were involved in compliance evaluations of the underlying transactions.

Airbus paid a $1.09 billion fine to the British Authorities as per the DPA. The U.K. DPA also mandated the continued implementation of a new compliance and ethics program at Airbus, ongoing cooperation in the SFO's investigation, self-reporting of fraud and other wrongdoing for the duration of the 3-year DPA, and the imposition of the French AFA as a corporate monitor.

Violations as per FCPA

As per FCPA violations, Airbus defaulted as it used third-party business partners to bribe airline executives and Chinese government officials in connection with certain aircraft contracts that Airbus was seeking to obtain. Airbus also set up a monetary fund to pay costs associated with entertainment events for Chinese government officials. Under the terms of the U.S. DPA, Airbus paid U.S. authorities approximately $294 million to resolve the criminal FCPA bribery charges.

In addition to the criminal fines, the U.S. DPA requires the continued implementation of Airbus's revamped compliance and ethics program, corporate compliance reporting, and cooperation in ongoing and future investigations and prosecutions of individuals.

Reforms and Remedial Actions

Airbus has taken significant measures from 2015 to 2020 to demonstrate its complete transformation from past misconduct, showcasing its commitment to compliance and prevention of future wrongdoing. These actions include:

1. Changes in Management: Airbus underwent a significant change in its management team, resulting in a largely different Board of Directors.
2. Independent Compliance Review: Airbus commissioned an Independent Compliance Review Panel to conduct a thorough and independent examination of the company's ethics and compliance procedures.
3. Restructuring of Ethics and Compliance Teams: Airbus restructured its Ethics and Compliance teams to ensure functional independence from the business. This involved merging the legal and compliance functions and altering the reporting line to the newly appointed General Counsel and Ethics Officer.
4. Revised Anti-Bribery and Corruption Policies: Airbus revised various internal policies and procedures on export control, like its Anti-Bribery and Corruption (ABAC) policy, based on recommendations from external stakeholders.
5. Comprehensive ABAC Risk Assessment: Airbus launched a company-wide, systemic, and comprehensive ABAC Risk Assessment to identify and mitigate bribery and corruption risks.
6. Enhanced Third-Party Due Diligence: Airbus redesigned the process of onboarding, due diligence, and ongoing monitoring for all third parties engaged in business relationships with the Airbus group.

These measures highlight the commitment of Airbus in rectifying past misconduct and building a robust compliance framework to ensure ethical practices throughout the organization. This case demonstrates that irrespective of their reputation or size, companies cannot operate beyond the boundaries of the law. Any non-compliance with the appropriate laws will result in significant commercial ramifications. 

At Rainmaker, we aim to help our clients navigate these hurdles through tailored solutions. As a leading expert in legal compliance, we offer customized training modules and workshops tailored specifically to address ABAC challenges faced by our clients. Our training module, WorkBAC, is meticulously designed to navigate the complexities of ABAC compliance, including the U.S. Foreign Corrupt Practices Act, 1977 (US FCPA), and the Prevention of Corruption Act, 1988 (PCA). Presented in the form of concise films, our ABAC module imparts essential practical knowledge crucial for seamless organizational operations.

Rainmaker’s comprehensive workshops cover ABAC policies, risk management strategies and ensure regulatory compliance. Our seasoned trainers foster an engaging learning environment that encompasses real-world scenarios, encouraging open discussions to maximize knowledge retention.

Equip your organization with the necessary tools and knowledge to effectively combat bribery and corruption. Reach out to us to schedule an appointment or to gain further insights into our available resources. Together, we can make a meaningful impact!

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