Airbus ITAR and Bribery a Massive Multi-year Scheme
The Department of Justice recently announced that Airbus ITAR and Bribery Penalties would amount to more than $3.9 Billion in fines to the United States and United Kingdom. Airbus, based in France, is a leading global manufacturer of commercial and military aircraft. This case, which involved the coordination of multiple international law enforcement agencies, found that Airbus used third party business partners to bribe government officials and airline executives around the world.
Charges filed in the United States included conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices (FCPA) act and conspiracy to violate the International Traffic in Arms Regulations ITAR. The nearly 4 billion dollars in fines constitutes the largest global foreign bribery resolution to date. Airbus engaged in bribery in China, Malaysia, Sri Lanka, Taiwan, Indonesia, and Ghana. They then engaged in further corruption by concealing those bribes. This scheme took place between 2008 and 2015 and involved Airbus personnel located in the United States.
Sensitive Defense Technologies Involved
Because sensitive defense technologies were involved in this corruption case, ITAR violations were also committed. The ITAR are export regulations that prohibit export of defense related technologies to restricted nations. Violation of ITAR can result in serious criminal and civil penalties. It can also result in loss of ability to export. All companies must classify products and services to determine the degree of control required for export to a foreign citizen or foreign chartered corporation. They must also ensure that all parties to a sell are legitimate and that products will not be unlawfully redistributed.
Airbus engaged in a criminal conspiracy to knowingly and willfully violate the AECA and ITAR, by failing to provide DDTC with accurate information related to commissions paid by Airbus to third-party brokers who were hired to solicit, promote or otherwise secure the sale of defense articles and defense services to foreign armed forces.
ITAR Specific Penalties
ITAR specific violations that Airbus committed from 2011 and 2019 involve ITAR part 130 – Political Contributions, Fees and Commissions. This involved failure to maintain accurate records and report statements of fees or commissions paid to facilitate sales. Other violations unauthorized retransfers of defense articles from Spain and reexport of defense articles from Spain to Australia. In a civil settlement Airbus agreed to a 3 year assignment of a Special or Internal Compliance Officer, implementation of extensive remedial compliance measures, and $10 million in for the remedial compliance measures. Additionally if agreed penalties are not paid, or sufficient corrective actions taken, Airbus faces being debarred or suspended from export transactions.
CVG Strategy
ITAR compliance is important for any company involved in controlled products and services. While the Airbus ITAR and bribery penalties resulted from a flagrant violation of the law, government export enforcement agencies have shown a increased vigilance in their activities. As with any other set of laws ignorance is not an excuse. Get your ITAR questions answered today by our experts.