With the triple coordinated resolution of the Airbus case announced simultaneously on January 31, 2020 in Washington, London and Paris, negotiated corporate settlements reached new heights in Europe. Airbus is the second largest aerospace company in the world after Boeing. It is a consortium of British, French, German and Spanish units with its head legal office in the Netherlands. For more than a decade, the company was suspected by regulatory authorities in Europe and the United States of using bribes to promote its sales.
In Europe, the case received international attention because of its unusually high monetary fines. A total of €3.6 billion (about $4 billion USD) was apportioned among the prosecuting entities for France (Parquet National Financier, PNF: €2.08 billion), the United Kingdom (Serious Fraud Office, SFO: €911 million) and the United States (Department of Justice and Department of State: €525 million). However, the size of the fines was not the only unusual aspect of the case. Even more surprising was the extraordinary support from the company itself and the close cooperation amongst the prosecutors of three different preeminent jurisdictions.
Extraordinary cooperation by the company
The extent of Airbus’s cooperation with different jurisdictions is unusual for a non-American multinational company. In the European legal environment, where negotiated settlements are relatively new, and large corporations still enjoy a cozy relationship with national regulators, Airbus is an exception. Furthermore, Airbus is truly a multinational corporation as its main shareholders are government controlled-entities from four different jurisdictions and the company established its headquarters in a fifth one. It is used to doing a large part of its business overseas, and since 2006, has undergone several organizational reforms and management changes aimed at making it a more transparent and ethical company. Some of its commercial practices were an open secret on which the press had reported, and the most recent executive team was committed to improving the standards of conduct. Airbus, after discussions on some reporting issues with UKEF, the British export financing agency, self-reported misconduct within its ranks on March 1, 2016 to the SFO[1] and then informed the PNF that it would fully cooperate in its preliminary investigation of bribery of foreign officials and related crimes by Airbus employees between 2004 and 2016.”[2]
On August 16, 2016, Airbus issued a press release acknowledging that it was under investigation by the SFO and PNF and pledged to fully cooperate with the investigators. While the official investigation was pending, the company launched a parallel internal investigation. Throughout this investigation, Airbus kept the UK and French authorities informed,[3] constituting an unusual level of cooperation compared to other recent corruption settlements in France and the United Kingdom.
Prosecutors acknowledged the company’s cooperation in the settlement documents as well as in press releases. The SFO noted in its press release “the full cooperation of Airbus SE in the investigation, and the programme of corporate reform and compliance. ”[4] The final judgment of the British deferred prosecution agreement (DPA) with the company stated that “Airbus ha[s] cooperated with the prosecuting authorities conducting the investigations, to the fullest extent possible.”[5] Similar statements can be found in the French settlement agreement (Convention Judiciaire d’Interet Public, CJIP) and the American DPA. Airbus’s cooperation clearly translated to more lenient treatment by the prosecuting authorities and credit in the calculation of the fines.
Cooperation among prosecutors
The close cooperation among the relevant prosecutors was evidenced by the creation, early in the process, of a Franco-British Joint Investigation Team (JIT); the acknowledgement of the restrictions imposed by the French “blocking statute“; and the conciliatory position of the DOJ.
The JIT was created by a protocol agreement signed by the British SFO and French PNF on January 30, 2017. Thus, investigators from different jurisdictions worked together during a period of three years. While not formally members of the JIT, U.S. authorities (who had started their own investigation) joined the joint inquiry once it was initiated in 2018.[6] The JIT investigators reviewed more than 1,750 entities worldwide with which Airbus transacted business, dividing up their analysis geographically and, in some cases, also by type of contract (e.g., export of military equipment). Investigators also agreed to give credit to Airbus for fines paid to other jurisdictions and on the need to use a single monitor. A trusting relationship among investigators was cemented by ties developed over the years through meetings and events organized under the auspices of multilateral organizations such as Eurojust. This productive rapport manifested itself in the joint resolution of the Societe Generale case[7] in November 2018, but it reached a new apex with Airbus. The cooperation among prosecuting entities has been heralded as a model of efficiency, a new Entente Cordiale.[8] It was possible in the Airbus case because the three prosecuting jurisdictions had common objectives: they are parties to the OECD Convention against Corruption and operate within compatible judicial frameworks.
The JIT protocol agreement makes a specific reference to the legal constraints of the parties, including respect for the French “Blocking Mechanism.”[9] The purpose of the JIT agreement was to “share relevant information among prosecutors while respecting the constraints of [the French] law of July 26, 1968.”[10] This law—known internationally as the French Blocking Statute— prohibits any entity under French jurisdiction from providing any sensitive information or data to foreign (i.e., non-French) authorities. Historically, the Blocking Statute has created a conflict of law for French companies if they are compelled to report on “sensitive” activities to authorities from several jurisdictions. In the Airbus case, the fact that prosecutors had a preliminary agreement in place mooted any such issue.
The acknowledgement by the United States that other jurisdictions have a higher interest in the resolution of the case is also an unusual feature. In most joint or parallel resolution cases, American prosecutors take the leading role. But in its Airbus resolution press release, the DOJ stated that “the U.S. resolution recognizes the strength of France’s and the United Kingdom’s interests over the Company’s corruption-related conduct, as well as the compelling equities of France and the United Kingdom to vindicate their respective interests as those countries deem appropriate, and the Department has taken into account these countries’ determination of the appropriate resolution into all aspects of the U.S. resolution.”[11] With these words, the DOJ appeared to tacitly honor the ne bis in idem principle dear to the Europeans (similar to double jeopardy in the United States). Furthermore the DOJ, as did the SFO, agreed that the 3 year monitoring of Airbus would be coordinated by Agence Francaise Anticorruption, AFA, the French Anticorruption Agency established in 2017. The fact that a recently created national agency was entrusted with such a sensitive assignment by three different jurisdictions was recognized with appreciation in Paris.
Lessons learned and to be learned
The Airbus triple settlement was, in the words of the top financial prosecutor in France, a “very substantial“[12] outcome. Takeaways from the settlement include the following:
– For the company, the settlement represents a large, but manageable cost, and did not amount to an existential threat for a corporation with annual sales of approximately $70 billion. The prospect of protracted legal proceedings in different jurisdictions was not a better alternative. The company was able to clean its slate and restore its reputation. Because of the current pandemic environment, Airbus, like its competitors, faces an uncertain future. New large subsidies have already been announced and the political decision in Europe to grant them was probably helped by Airbus’s ability to get out of this judicial quagmire.
– For the three jurisdictions involved, the triple settlement provides welcome revenue to the public coffers. It avoids long legal procedures that could have raised sensitive issues of sovereignty. It also proves that if prosecutors and magistrates are guided by some common principles, like those of the OECD Anti Bribery Convention, and develop a trusting rapport, joint solutions are attainable.
– From a broader legal perspective, the Airbus case is a new landmark that demonstrates the usefulness of negotiated settlement procedures to resolve large, multijurisdictional bribery cases.
The remaining question is therefore: could Airbus serve as a template to resolve future complex cases involving multiple jurisdictions? The answer is likely yes, but only when three preconditions are present: (1) a cooperative corporation with a culture of transparency, a supportive executive team and the will and resources to reform; (2) compatible legal frameworks in the prosecuting jurisdictions, preferably with each being a party to the OECD Convention Against Bribery; and (3) dedicated investigators, preferably working as a transnational team.
We will see in the upcoming months and years how well and often the Airbus model is replicated.
Footnotes
[1] SFO Statements of Facts, paragraphs 32 to 35, available at https://www.sfo.gov.uk
[2] CJIP ¶ 39 (English translation), https://www.agence-francaise-anticorruption.gouv.fr/files/files/CJIP%20AIRBUS_English%20version.pdf (PDF: 512 KB)
[3] CJIP ¶ 38.
[4] https://www.sfo.gov.uk/2020/01/31/sfo-enters-into-e991m-deferred-prosecution-agreement-with-airbus-as-part-of-a-e3-6bn-global-resolution/
[5] Final Judgment ¶ 69.
[6] See Kate Beioley, Peggy Hollinger & Kadhim Shubber, “Airbus Ran ‘Massive’ Bribery Scheme to Win Orders,” Financial Times (Jan. 31, 2020), available at https://www.ft.com/content/f7a01a60-442b-11ea-abea-0c7a29cd66fe
[7] See U.S. Dep’t of Justice, Press Release (June 4, 2018), available at https://www.justice.gov/opa/pr/soci-t-g-n-rale-sa-agrees-pay-860-million-criminal-penalties-bribing-gaddafi-era-libyan
[8] “Entente Cordiale” is the informal but binding understanding between Britain and France that was reached in 1904, forming the basis of Anglo-French cooperation in World War I. The term by extension applies to informal agreements between sovereign jurisdictions.
[9] See the description of the French Blocking Mechanism in the British Statement of Facts, at ¶ 36.
[10] See CJIP ¶ 39; British Statement of Facts at ¶ 37.
[11] U.S. Dep’t of Justice, Press Release (Jan. 31, 2020), available at https://www.justice.gov/opa/pr/airbus-agrees-pay-over-39-billion-global-penalties-resolve-foreign-bribery-and-itar-case
[12] Statement of JF Bonhert, Procureur National Financier, to Agence France Presse.
Michel A. Perez is a Senior Fellow at New York University School of Law’s Program on Corporate Compliance and Enforcement, the U.S. representative of Labex ReFi, and a Ph.D. candidate at Paris I Sorbonne-Pantheon University.
Disclaimer
The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of New York University School of Law. PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author.