By any measure, 2017 has not been a good year for the European aircraft manufacturer Airbus. In its annual report, the company has stated it is under investigation in the United Kingdom, Germany, Romania, Greece, and Australia over allegations of bribery and corruption. It would not be surprising if the U.S. government is soon on that list for investigating possible FCPA violations as well. The company’s chief executive, Tom Enders, has indicated publicly he would consider some type of Deferred Prosecution Agreement if one is offered. Not too surprising, as the company has indicated all the kerfuffle risks a “material impact” on profits.
One thing on the mind of The Man From FCPA is how the Airbus investigations ties into, directly or even indirectly, the Rolls-Royce bribery and corruption investigation and resolution. It turns out that a part of the Rolls-Royce investigation may have led to Airbus, as the companies had a mutual third-party representative in Indonesia, Soetikno Soedarjo, who facilitated sales of planes to the Indonesian national airline. Another question was raised by the Embraer FCPA enforcement action, which involved corrupt sales into Saudi Arabia, as a do allegations in the Airbus investigation.
There have been FCPA enforcement actions in the past, but they have more often dealt with airplane and airport logistics, which outside the Untied States are foreign government-run or controlled as state-owned enterprises. Now, international enforcement authorities are investigating sales to national carriers or state-owned airlines that perform those government functions in many countries across the globe. While the number of manufacturers that can provide aircraft is exponentially smaller than aircraft logistic companies, any company in this business needs to be cognizant of this new wave of an industry sweep.
Another noteworthy issue will be how the U.S. manufacturer Boeing fares from the turmoil of these investigations involving Airbus. Boeing went through its own bribery and corruption issues many years ago and now touts a very public stance against bribery and corruption. It will be interesting to see if Boeing can use this public persona as a market differentiator going forward.