Airbus agrees to pay record $3.9 billion to settle bribery claims

fuselage of Airbus A380

Airbus has agreed to pay more than $3.9 billion in penalties to France, the U.K. and U.S. to settle charges stemming from a yearslong scheme to bribe officials in China and elsewhere to buy its aircraft. The penalties represent the largest ever global foreign bribery settlement.

“Airbus paid bribes through agents around the world to stack the decks in its favor and win contracts around the globe,” Lisa Osofsky, director of the U.K. Serious Fraud Office, said in a news release. “Corruption like this undermines free trade and fair development and it is to Airbus’s credit that it has admitted its culpability, cleaned its house and come forward to put this conduct to bed.”

The largest penalty, about $2.3 billion, will be paid to France’s Parquet National Financier in connection to bribes paid to government and airline officials in China and multiple other countries.

The U.K. Serious Fraud Office, which launched the investigation into Airbus in 2016 after receiving a tip from a whistleblower, will receive $1.09 billion over bribes paid in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana.

The penalties to be paid to the U.S. total about $582 million and cover violations of the Foreign and Corrupt Practices Act and the International Traffic and Arms Regulations related to the sale of military technologies to foreign armed forces.

The U.S. Department of Justice said that from 2008 until at least 2015 Airbus participated in a scheme to offer and pay bribes to decision makers and other influencers, including foreign government officials, to win business from both privately owned businesses and entities that were state-owned and controlled. Part of the conspiracy involved marking payments to a business partner in China that were to be used to pay bribes to government officials in connection with the sales of Airbus airliners to state-owned airlines. To hide the payments and its connection with the business partner, Airbus made payments to a bank account in Hong Kong in the name of a company controlled by another business partner, the DOJ said.

Airbus and Boeing compete fiercely for business from China, which is expected to become the world’s largest aviation market in the near future. Boeing projects that nearly 8,100 new airliners will be delivered to Chinese carriers in the next 20 years.

France, the U.S. and U.K. all have agreed to suspend or defer prosecution for three years, and prosecution will be discontinued after the three-year period if Airbus abides by all the terms of agreements with each country, including cooperation with any ongoing investigations. Anti-corruption authorities in France will monitor the company’s compliance with the agreements.

“The settlements we have reached today turn the page on unacceptable business practices from the past,” said Airbus Chairman Denis Ranque in a statement. “The strengthening of our compliance program at Airbus is designed to ensure that such misconduct cannot happen again.”