Airbus: Vietnam Aircraft Deal



Between 2002 and 2014, Airbus engaged with consultants to facilitate and conceal bribe payments intended to be paid to Vietnamese government officials and airline executives in order to obtain and retain business in Vietnam, including the sale of three C-295s.

The details of this case are loosely transcribed and abbreviated from the Department of Justice report, United States of America v. Airbus SE, released on January, 28, 2020. The report anonymized many of the actors involved. Every effort has been made to ensure that the content of this case is as accurate and comprehensive as possible; however, the information available on the Airbus-Vietnam case is limited at this time.

Case details
Seller country: United States, Spain
Seller company: Airbus (EADS)
Buyer country: Vietnam
Goods category: Aircraft
Equipment sold: 3 C-295s
Deal value: 100 million USD
Sum involved in corruption: 6,150,226 Euros
Start year: 2002
End year: 2014
Outcome status: Deferred Prosecution Agreement(s)

Dramatis Personae
  • Airbus SE: European multinational aerospace corporation based in France.

  • SMO: Strategy and Marketing Organization within Airbus.

  • SMO International: A division of the SMO that was in charge of Airbus’s business development activities, including, but not limited to, the identification, engagement, and supervision of third party business partners and International Marketing and Development Projects.

  • Organization 4: Company in Hong Kong doing business in Vietnam. The relationship between Organization 4 and Airbus was overseen by SMO International, including supervision from Airbus Executive 3.

  • Consultant 6, Consultant 7, and Consultant 8: Foreign nationals in control of Organization 4. Consultant 7 had a long-term connection with senior Vietnamese government officials and airline executives. Consultant 6 was a frequently used business partner for SMO International.

  • Airbus Executive 3: Executive within Airbus who approved the contracts between Airbus Defense & Space and Organization 4.

Summary of Corruption Allegations

The International Traffic in Arms Regulations (ITAR) is a United States regulatory regime to ensure that defense and military-related technologies meet export requirements. When defense items are exported, the U.S. suppliers have to file an export license application with the Directorate of Defense Trade Controls (DDTC). When Airbus completes the production of the C-295 and sells it to a customer, the company must file a export license that alerts the DDTC who the new end user is. As part of these re-export applications, Airbus has to include statements regarding ITAR Part 130, which refers to whether or not the company paid, offered, or agreed to pay political contributions, fees, or commissions in connection with these sales. Airbus filed false re-export license applications to the DDTC regarding Part 130 for all three C-295s. In other words, Airbus willfully concealed political contributions, fees, or commissions related to this sales campaign.

  • 2002

    Organization 4 starts working with Airbus on commercial aircraft campaigns based on an oral agreement.

  • Oct 2002

    to July 2014: Airbus entered several agreements with Organization 4 related to sales campaigns for commercial, defense, and helicopter products. Airbus Executive 3 authorized these contracts with Consultant 6. Most of the consultant agreements between Organization 4 and Airbus were entered into after the sales campaigns were already solidified.

  • 17 Dec 2013

    The contract for three C-295s was signed between Airbus and the Vietnamese Ministry of Defense.

  • 20 Dec 2013

    Airbus entered into an agreement to pay Organization 4 a “success rate” in the amount of 6,150,226 Euros for the sale of three C-295s of which Airbus paid at least 2,935,541 Euros under this agreement. This “success rate” was used to pay senior Vietnamese government officials and airline executives.

Investigation Outcomes
  • 31 Jan 2020

    After a four-year investigation by French, British, and U.S. authorities, Airbus admitted to their long-running bribery and corruption scheme involving sales to at least 19 markets. Airbus agreed to pay almost $4 billion in fines in a so-called Deferred Prosecution Agreement (DPA). Under the terms of the DPA, Airbus itself avoids criminal conviction, but individual employees of Airbus may be prosecuted for their involvement in the bribery and corruption scheme. No Airbus employees have been prosecuted thus far, and it is unlikely that they will be in the future, which may risk setting a precedent where individuals are not held accountable for their involvement in endemic corruption despite it being known to investigating authorities. While this settlement is a monumental case in anti-corruption within the global arms trade, it elucidates the ways in which transnational corporations can buy their way out of harsher consequences. With a net worth of $107.2 billion, a $4 billion fine for endemic bribery and corruption still seems miniscule; however, the cooperation among countries that took place during the investigation of the case to hold Airbus financially responsible is a potential step forward in anti-corruption efforts.