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Airbus revamping its compliance controls

Jaclyn Jaeger | May 26, 2017

Airbus announced this month the establishment of an independent review panel to help improve its compliance controls and culture, as the European aircraft maker faces numerous investigations into allegations of bribery and corruption across several countries.

In its 2016 annual report, Airbus said it’s facing a series of investigation over bribery allegations in Austria, Greece, Germany, Indonesia, Pakistan, Romania, Thailand, Turkey, and the United Kingdom. Additionally, the U.K. Serious Fraud Office (SFO) is investigating Airbus subsidiary GPT concerning a service contract in Saudi Arabia that pre-dated the acquisition by Airbus in 2007.

Last year, too, Airbus disclosed it was under coordinated investigations by the SFO and France’s Parquet National Financier (PNF) into allegations of fraud, bribery, and corruption in its civil aviation business relating to self-reported misstatements and omissions concerning third-party consultants. “We have been cooperating fully with the investigations that ensued and further improving our compliance system is obviously our number one priority now,” Airbus CEO Tom Enders stated.

“However, to embed irreproachable behaviours in all our business undertakings sustainably, we must take a hard look at both our systems and our culture,” Enders added. “That’s why we have chosen to elect highly experienced independent experts to challenge and guide us going forward.”

The newly established Independent Compliance Review Panel (ICRP) is made up of members all well-versed in compliance monitoring of large corporations. Furthermore, they will have access to all levels of the company and will report to Embers and the board on how to further improve Airbus’ compliance processes, policies, organisation, and culture.

The ICRP will be made up of the following members:

  • Lord Gold: A senior litigator with extensive experience working with corporations, governments, and regulators around the world, and who reviewed Rolls-Royce’s global anti-corruption compliance policies following bribery allegations in various countries.
  • Noëlle Lenoir: Former French Minister of European Affairs and a member of the Conseil d’Etat, France’s highest court in administrative and tax matters.
  • Theodor Waigel: Germany’s former Federal Minister of Finance of Germany and a former outside compliance monitor for Siemens.

“Lord Gold, Noëlle Lenoir, and Theo Waigel will support us in our ongoing efforts to put in place a meaningful change programme which addresses the issues that have been identified,” Enders said.

Review of business partner relationships. In response to its regulatory investigations and commercial disputes, Airbus said in its annual report that it’s in the process of enhancing “certain of its policies, procedures, and practices, including ethics and compliance.”

Specifically, it is in the process of revising and implementing improved procedures, including its engagement of third parties, and particularly with respect to sales-support activities. Airbus said it is also “conducting enhanced due diligence as a pre-condition for future or continued engagement and to inform decisions on corresponding payments.”

Airbus said it has “engaged legal, investigative, and forensic accounting expertise of the highest calibre to undertake a comprehensive review of all relevant third-party business consultant relationships and related subject matters.” Together, Airbus stated, these experts are using advanced software tools to analyse massive amounts of electronic and hard copy documents as part of the investigation.

Airbus said it will take “appropriate action against those found to have engaged in any wrongdoing or misconduct.” John Harrison, general counsel and head of the legal and compliance team at Airbus, leads the enhancements to the compliance programme and in supporting authorities with the investigations.