Airbus Pays €81M to Settle German Investigation

Munich Public Prosecutor Ends Eurofighter Austria Investigation

(Source: Airbus; issued Feb. 09, 2018)

AMSTERDAM --- The investigation of Airbus Defence and Space GmbH by the Munich Public Prosecutor (Staatsanwaltschaft München I) related to the sale of Eurofighter aircraft to the Republic of Austria in 2003 has been terminated.

The result of the investigation by the Munich Public Prosecutor, which had been ongoing since 2012, did not confirm the allegations of bribery.

In order to conclude the investigation, the Munich Public Prosecutor has issued an administrative penalty notice against Airbus Defence and Space GmbH under the German Act on Administrative Misdemeanours ("Ordnungswidrigkeitengesetz") amounting to € 81.25 million. The total amount comprises an administrative fine of € 250,000 and a disgorgement of € 81 million. Airbus Defence and Space GmbH has accepted this notice.

The notice is based on the allegation of a negligent breach of supervisory duties of non-identified members of Airbus Defence and Space GmbH's former management. The notice alleges that certain former management negligently failed to ensure proper internal controls that would have prevented employees from making payments to business partners without proven documented services in exchange.

On the other hand, the notice explicitly recognizes the major efforts undertaken by Airbus and its management since 2012, which have resulted in a new Compliance culture and a serious Compliance programme.

Since the beginning of the investigation, Airbus has fully cooperated with the Munich Public Prosecutor. This included the provision of an independent fact-finding report of the law firm Clifford Chance, which Airbus shared with the Munich Public Prosecutor in 2014.

Airbus is a global leader in aeronautics, space and related services. In 2016 it generated revenues of €67 billion and employed a workforce of around 134,000. Airbus offers the most comprehensive range of passenger airliners from 100 to more than 600 seats and business aviation products. Airbus is also a European leader providing tanker, combat, transport and mission aircraft, as well as one of the world's leading space companies. In helicopters, Airbus provides the most efficient civil and military rotorcraft solutions worldwide.

(EDITOR’S NOTE: The Cambridge English dictionary defines “disgorgement” as “a situation in which a person or organization is forced to pay back money that they have made in an illegal way.”)

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Airbus Ordered to Pay €81 Million to End German Corruption Probe

(Source: Deutsche Welle German Radio; posted Feb. 9, 2018)

German prosecutors have ordered Airbus to pay €81 million to settle an investigation into alleged corruption. The long-running probe concerns the firm's multi-billion euro sale of Eurofighter jets to Austria.

European aircraft manufacturer Airbus agreed to settle a corruption investigation in Germany by paying an €81.25 million ($99 million) fine to authorities, prosecutors in Munich announced on Friday.

The settlement sum breaks down into a €250,000 administrative fine as well as an €81 million "disgorgement," which is broadly defined as the recovery of ill-gotten gains.

The German investigation, which first opened in 2012, was looking into whether Airbus issued bribes in order to secure a €2 billion contract to sell Eurofighter combat jets to Austria in 2003.

Airbus said in its own statement that it had accepted the fine and that the German investigation "has been terminated."

No evidence of bribery, but suspect funds

Prosecutors in Munich noted in their statement that the investigation did not find evidence of bribery. However, Airbus was unable to account for over €100 million in payments made to two shell companies in Great Britain.

"The funds, which bypassed internal controls and were largely without provable return, were used for unclear purposes," the statement said. "It cannot be determined based on the cash flows, which purposes the payments ultimately served."

German authorities, therefore, concluded that Airbus failed in its supervisory duty by allowing its former management to make the payments.

Probes ongoing in Austria, UK and France

Airbus is still under investigation in Austria, which is looking into claims that bribers were paid to land the Eurofighter deal. Austrian authorities are seeking up to €1.1 billion in damages.

France and Britain are also investigating the company over its sale of commercial jets. The company also faces separate probes in in France and Britain.

Airbus' current Chief Executive Tom Enders, who headed the company's defense business from 2000 to 2005, has denied any wrongdoing. However, Airbus announced in December that Enders would not seek reappointment when his term ends in April 2019.

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