Airbus’s legal troubles grow as it admits inaccurate US arms filings

Firm also warns of potentially significant fines from bribery investigations in UK and France

Airbus  said it was too early to guess the size or timing of any European penalties or the outcome of the new US findings. Photograph: Getty Images

Airbus said it was too early to guess the size or timing of any European penalties or the outcome of the new US findings. Photograph: Getty Images

 

Airbus said on Tuesday it had uncovered inaccuracies in its filings to US regulators over arms technology sales, drawing the US for the first time into a scandal over alleged misconduct at Europe’s largest aerospace firm.

Airbus also warned about potentially significant fines resulting from existing bribery investigations in Britain and France over the use of middlemen in civil airplane sales, which have triggered a sweeping internal investigation.

However, it said it was too early to guess the size or timing of any European penalties, or the outcome of the new US findings.

Shares in the defence and civil aviation group rose more than 4 per cent after it posted a smaller than expected drop in third-quarter profits despite jetliner delivery delays.

However, the gains were overshadowed by news that Airbus had itself unearthed inaccuracies in past filings to the US State Department on defence technology exports. These involved inaccurate statements made by Airbus under a section of the US International Traffic in Arms Regulations (ITAR), which governs the use of commissions and agents.

Airbus said the flaws were first discovered during an audit at the end of 2016, and were confirmed in an internal follow-up review completed in the third quarter.

Secrets

Finance director Harald Wilhelm said the European company had not disclosed any secrets about US technology, and that the issue was restricted to the use of sales agents and commissions, governed under part 130 of the ITAR rules.

It is separate from investigations into the use of agents in commercial airplane sales, which are not subject to the same US controls as weapons exports, but do have some US restrictions over the use of advanced navigation technology.

Legal experts estimate Airbus faces fines in the billions because of the scale of suspect paperwork dating back years.

The world’s second largest planemaker after Boeing, posted third-quarter core operating earnings of €697 million, down 4 per cent on lower aircraft deliveries. It took a further small charge for the troubled A400M military project and warned of further costs later this year. – Reuters

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