Syedur Rahman and Nicola Sharp examine the risks of bribery

in international trade and how corporates should respond if they face such

allegations.

Aerospace giant Airbus is now facing corruption allegations

in a fifth country.

Airbus, which was already under investigation in the UK,

France, Germany and Austria for suspected corruption, has announced that it has

found "inaccuracies in filings" made with the U.S. Department of

State under the International Traffic in Arms Regulations (ITAR). The French

aircraft maker has said it has brought the problem to the attention of the US

authorities and has said it will cooperate with investigators.

ITAR require exporters to disclose to the US State

Department any payments made to third parties for certain overseas sales.

In 2016, the UK Serious Fraud Office (SFO) opened an

investigation into Airbus regarding fraud, bribery and corruption. The SFO

stated that the allegations related to “irregularities concerning third party

consultants."

In April last year, the UK’s Export Finance agency suspended

funding for Airbus because of a lack of transparency regarding its third-party

payments. France and Germany also took similar action.

In March this year, it was announced that French

investigators had begun investigations into the same allegations that the SFO

were probing. Investigators in Germany and Austria are examining possible

irregularities in the 2 billion Euros sale of fighter jets to Austria.

Airbus’ problems are not unique. In 2010, BAE paid the US

Department of Justice a $400M criminal fine for impeding investigators, making

false statements about its Foreign Corrupt Practices Act compliance program and

violating the Arms Export Control Act and ITAR. It also paid the SFO a £30M fine in a negotiated resolution. In 2011,

BAE was fined $79M by the US State Department for violating the Arms Export

Control Act and ITAR. The penalties were

due to payments made regarding the sale of fighter planes to Saudi Arabia and

Eastern Europe.

But while Airbus’s problems may not be unique, they are

certainly major. If it sells aircraft to a country and there is then a

suggestion of wrongdoing, there is the possibility of at least two countries

conducting investigations. Airbus’ situation (and the international nature of

the whole aerospace industry) illustrates the risks of bribery across

jurisdictions – and the need to tackle those risks.

Coordination

There may be many in business who can recount instances from

the past where bribery in another country may have gone unpunished, unnoticed

and even accepted or encouraged as a way of securing deals.

The Airbus case, like many other recent investigations,

shows that there is no way such an outcome is likely anymore. Countries the

world over are more alert to the dangers of bribery. Their investigating

agencies are swifter to act and more likely to work with similar bodies in

other countries. Bribery very often crosses borders – and the authorities are

now better at conducting appropriate responses to this. They are more attuned

to the signs of bribery and able to share information with foreign counterparts

on a far quicker and more regular basis than in previous years. In simple terms,

tackling international bribery has become coordinated.

It would be foolish to keep thinking that bribery is a

harmless tool to boost foreign trade – something that will be ignored or

condoned. Anyone taking such an approach could find themselves facing an

international investigation.

If that is the case, they will require legal advice from

solicitors who have:

* The ability to put together an international defence case.

* The knowledge of business crime law in a number of

countries.

* The skills to conduct negotiations with a number of

investigating agencies from various nations.

Coordination is crucial to any successful defence against

international bribery allegations.

Negotiation

While devising a cross-border defence case and knowing the

law in many countries are essential prerequisites for any legal team

representing a client facing allegations of international bribery, negotiation

is an area which should not be ignored. Its importance should not be

underplayed.

Logical, persuasive and informed negotiation with the

authorities can be as important as any other aspect of a defence case when

looking to obtain the most favourable outcome.

Earlier this year, Rolls-Royce paid £671M to settle

allegations that it had used widespread bribery in many countries to win

contracts. It did not report the wrongdoing to the Serious Fraud Office (SFO)

and the evidence against it was compelling. And yet it avoided prosecution, was

given a deferred prosecution agreement (DPA) and received a discount on the

fines it had to pay.

This was because Rolls-Royce offered what the DPA settlement

called “extraordinary cooperation’’ to the authorities. It helped investigators

establish what had happened, removed many senior staff with links to the

bribery and devised and introduced tougher preventative measures; even hiring

Lord Gold to examine its anti-corruption measures.

But Rolls-Royce also emphasised to the authorities that its

50,000 employees – and many, many more in its supply chain – would be harmed if

it as punished too harshly.

Rolls-Royce had little defence to the allegations it faced.

But it negotiated itself away from what could have been a potentially

catastrophic criminal prosecution.

International

The international nature of bribery means, as we have

outlined here, that companies who face such allegations require skilled

international legal representation.

It is an area that may well grow, as many countries start to

uncover and act upon evidence of large-scale bribery that has been committed within

their borders over the years. The Rolls-Royce case, for example, involved

bribery carried out between 1989 and 2013.

For those who find themselves accused of bribery, the right

choice of legal representation can make a vast difference to the outcome of the

investigation. The likes of Airbus and Rolls-Royce should serve as a reminder

of the seriousness of the allegations and the need to make the right legal

choices.

But for companies that are certain they have not indulged in

bribery anywhere or at any time in their history, such high-profile cases can

be a useful reminder of the need to avoid such problems in the future. Anyone

doing business abroad faces the risk of being embroiled in – or at least of

being asked to be involved in – bribery.

The risks may vary wildly from country to country and from

business sector to sector. But all companies must:

* Seek informed, expert advice about the dangers of bribery

in the sectors and countries they operate, or plan to operate, in.

* Devise and introduce appropriate workplace practices that

prevent any member of staff or company representative being able to either

offer or receive a bribe or make it possible for anyone else to do so.

Legal help is available for companies looking to take such

precautions when trading abroad. The Airbus case alone should make everyone

trading across borders think long and hard about their anti-bribery measures.