Airbus faces British probe over potential export control breach
PARIS: Airbus is facing a criminal investigation in Britain into potential violations of export control rules involving several of its British entities, the aerospace group said on Tuesday.
BLAGNAC, France: A photo shows the Airbus logo during the Airbus annual press conference in Blagnac, southwestern France on February 16, 2023. – AFP.
The investigation emerged in footnotes to the company’s half-yearly earnings, which said Airbus was fully cooperating with the probe by Britain’s Revenue and Customs agency (HMRC).
“Airbus is working with all relevant authorities to ensure full remediation of all identified deficiencies,” a spokesperson said in response to a Reuters query about the filing, adding that it was not expected to have a material financial impact. A spokesperson for HMRC declined to comment, citing a policy of never discussing ongoing or specific investigations.
Airbus said the decision to launch the probe followed an audit carried out by British export control authorities in 2022. The British probe comes around nine months after the US State Department formally lifted the threat of charges over alleged violations of export rules in the United States.
Airbus said Tuesday that its net profit in the first half year fell 46 percent to 825 million euros ($890 million), dragged down by a massive writedown in its space operations. Overall, revenue in the first half of the year rose 4 percent to 28.8 billion euros as its commercial aircraft deliveries rose by seven planes to 323. Airbus announced in June that it had decided to make a roughly 900-million-euro charge against first-half earnings after an extensive review of its space business. On Tuesday it said the charge for the space business was in fact 989 million.
In January 2020, Airbus reached a trio of deferred prosecution agreements and agreed to pay record fines totaling 3.6 billion euros following broad investigations in Britain, France and the United States into allegations of corruption. As part of the settlements, Airbus agreed to pay 9 million euros and set up a three-year monitoring plan to resolve findings by the State Department that Airbus had violated US International Traffic in Arms Regulations (ITAR).
Airbus also agreed to appoint an export control compliance officer.
ITAR is the official name for a 40-year-old set of rules governing the export of defense goods and data perceived to have implications for US national security. In 2017, Airbus said it had discovered and reported to US authorities inaccuracies in past declarations to the State Department over the sale of goods and services under ITAR.
The ending of the three-year monitoring period was delayed to October last year after Airbus asked for more time to complete the process after diverting internal resources to ensuring it complied with Western sanctions against Russia. Airbus also warned last year that the factual disclosures in the State Dept probe could spawn other international investigations, though a person familiar with the latest British investigation told Reuters the two cases were not related.
The British criminal probe puts Airbus back in the judicial spotlight, albeit on what so far appears to be a relatively limited scale, just as Boeing wrestles with the fallout from criminal probes into its handling of the safety of the 737 MAX.
The US planemaker initially won a prosecutor settlement over allegations that it misled US regulators over development of a software feature linked implicated in two fatal crashes. But the US Justice Department said in May that Boeing had breached its obligations in the agreement, and the US planemaker last week finalized a guilty plea to a criminal fraud conspiracy charge and agreed to pay at least $243.6 million. — Reuters.
