Hit and Run: Airbus shuts down subsidiary to avoid bribery investigation

July 19, 2019

2 min read

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What's going on here?

Airbus will shut down one of its subsidiaries following a seven-year bribery investigation by the Serious Fraud Office (SFO).

What does this mean?

Airbus’ UK-based subsidiary, GPT Special Project Management, has been under investigation for seven years. This was over allegations that it paid multi-million pound bribes to secure a military contract with the Saudi Arabian government. The fact that Airbus will shut down its subsidiary by December 31st means that this could prevent the Serious Fraud Office (SFO) from bringing a prosecution against it. This is because, once a firm has been closed down, it is not possible to prosecute it. However, individuals involved with the bribe may still be subject to prosecution. The SFO requires Attorney General Geoffrey Cox’s approval to initiate a prosecution, but it has been over a year and he has yet to address this case. Consequently, Cox has been accused of “sitting on” the Airbus subsidiary corruption case to decide whether or not to prosecute over Saudi deal. Cox has likely shied away from prosecution as this could cause diplomatic tensions with the Saudis and reveal British government complicit in illegal activities.

What's the big picture effect?

Anti-corruption campaigners have argued that the decision on prosecuting GPT will signal whether or not Britain is serious about addressing bribery cases regardless of whether or not they are politically sensitive in nature. The Attorney General’s decision will be especially significant given Britain’s poor track record of prosecuting bribery investigations. Most notably in 2006, Tony Blair’s government shut down an SFO investigation into multibillion-pound arms deal between BAE Systems, Britain’s largest arms company and Saudi Arabia.

Deals in large-scale weapons transactions by companies such as GPT Special Project Management are heavily masked by national-security imposed secrecy. It has been argued thi creates a breeding ground for corruption. The relative immunity of the trade is demonstrated by the fact that out of 502 violations of UN arms embargoes by governments, companies and individuals, only two have resulted in legal action.

Many have said that the documentation presented to the SFO and the government regarding the allegations in the GPT contract is clear evidence of bribery. However, will the SFO show that they are serious about investigating the allegations and, if need be, charge the corporate entity and the individuals responsible? Or will this be another cover-up to protect the British defence industry, the British government and its Saudi client?

Report written by Lina Jeffcock

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