French aircraft group Airbus has established an independent compliance review panel (ICRP) as fraud and bribery investigations into the company’s sales activities continue by UK, French and Austrian authorities.

The panel consists of former German finance minister Theo Waigel, former French European affairs minister Noelle Lenoir, and David Laurence Gold, a UK lawyer and House of Lords member. The panel, which Airbus says will have access to all levels of the company, will report to CEO Tom Enders on how the company can improve its compliance processes and policies.

Market observers believe the move is a bid to help Airbus’s chances of winning a deferred prosecution deal in the civil investigations. A deferred prosecution agreement (DPA) would mean a settlement with prosecutors for admitting wrongdoing and paying a fine. Any criminal charges would be deferred and after a period of compliance monitoring can be dropped, thus preventing any convictions and the knock-on effects of that. DPAs are usually given to companies that co-operate with investigators and undertake remedial compliance measures.

“To be meaningful it must transcend a cynical attempt to tick the right boxes to secure settlements in the UK, France and other jurisdictions,” director of investigations at Corruption Watch UK, Paul Holden, tells GTR.

“Unlike Gold’s previous controversial review of BAE Systems, any compliance review of Airbus must be given a broad mandate and unfettered access to investigate the rectitude of all the company’s agency and middle-man arrangements both past and present. If the allegations are proven true, the company must come clean to all the relevant authorities and assist in the prosecution of managers, directors and employees involved in the corruption.”

Corruption cases

Parquet National Financier (PNF), a judicial unit which was established in 2013 to investigate fraud, launched an investigation into illegal activities relating to financing of aircraft sales at Airbus in March. The investigation is running in parallel to ongoing investigations by the UK’s Serious Fraud Office (SFO), which were launched in August last year.

The investigations have meant a freeze on export financing from the UK, France and Germany. Since major components of Airbus commercial aircraft are manufactured and assembled in France, Germany and the UK, the company has enjoyed access to finance support from all three governments.

The credit freeze has led to the company having to increase financing for customers. For the first half of 2016, GTR reported that Airbus had supplied a near tenfold increase in customer financing on the back of the export credit blocks.

The company is also facing legal charges in Austria, where prosecutors have announced a fraud investigation into Enders and other individuals in connection to a US$2bn order in 2003.

Airbus, which self-disclosed its use of agents and middlemen to help win contracts, has pledged to co-operate with all investigations.

The panel

Commenting on the new panel, Airbus CEO Enders says: “To embed irreproachable behaviours in all our business undertakings sustainably, we must take a hard look at both our systems and our culture. That’s why we have chosen to elect highly experienced independent experts to challenge and guide us in our ongoing efforts.”

Gold was a solicitor at Herbert Smith for 37 years, before setting up David Gold and Associates, a high-level strategic litigation advisory in 2011. He has become the go-to name for large companies looking to reassure investors or prosecutors that a compliance problem is in check.

Gold was the monitor appointed by the US department of justice to make sure defence group BAE Systems, kept its promises made as part of its 2010 deal and US$400m fine to settle allegations of bribery in Saudi Arabia. He also reviewed Rolls-Royce’s global anti-corruption compliance policies following bribery allegations in various countries.

Lenoir is a specialist in competition law, public business law and economic regulations – both at the national level and at the European level. Waigel, a lawyer since 1967, has acted in an advisory capacity for corporations and government on matters of compensation, governance and compliance since 1999. From 2009 to 2012 he served as an outside compliance monitor for Siemens.