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French aerospace company to pay more than $3.9 billion to resolve foreign bribery cases

Financial Crimes DOJ FCPA Bribery Of Interest to Non-US Persons UK Serious Fraud Office AECA ITAR

Financial Crimes

On January 31, a French aerospace company that manufactures civilian and military aircraft agreed to pay combined penalties of more than $3.9 billion to U.S., French, and UK authorities. The company resolved foreign bribery charges with all three jurisdictions, as well as U.S. violations of the Arms Export Control Act (AECA) and its implementing regulations, and the International Traffic in Arms Regulations (ITAR). (See deferred prosecution agreement and information filed in the U.S. District Court for the District of Columbia.)  The resolutions covered bribes paid in countries including China, Sri Lanka, Malaysia, Indonesia, Taiwan, and Ghana.

With respect to the FCPA, according to the DOJ’s announcement, beginning in at least 2008 and continuing through at least 2015 the company engaged in a global “scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives.” The bribes were offered to decision makers, including foreign officials, “in order to obtain improper business advantages and to win business from both privately owned enterprises and entities that were state-owned and state-controlled.” The AECA and ITAR violations involved “fil[ing] numerous applications for the export of defense articles and defense services to foreign armed forces[,]” but failing to provide the U.S. State Department’s Directorate of Defense Trade Controls (DDTC) “with accurate information related to commissions paid by [the company] 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.”  As part of the deferred prosecution agreement, the company agreed to cooperate with the DOJ’s ongoing investigations and prosecutions and enhance its compliance program. The DOJ also recognized the company’s cooperation and remediation.