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Airbus Says It Misled State Department on Arms Sales Airbus Says It Misled State Department on Arms Sales
(about 11 hours later)
The aircraft manufacturer Airbus said on Tuesday that it may have violated United States rules on arms exports, potentially expanding a corruption investigation that has already shaken the company in Europe.The aircraft manufacturer Airbus said on Tuesday that it may have violated United States rules on arms exports, potentially expanding a corruption investigation that has already shaken the company in Europe.
Airbus, Boeing’s main rival in the passenger jet business, said that it had provided false information to the State Department about its compliance with rules on arms sales overseas. Airbus provided few details except to say that the inaccuracies related to American regulations on fees and commissions paid to sales agents. Airbus, Boeing’s main rival in the passenger jet business, said that it had provided false information to the State Department about its compliance with rules on arms sales overseas.
Airbus provided few details except to say that the inaccuracies related to American regulations on fees and commissions paid to sales agents.
The disclosure raised the prospect that corruption investigations involving the company in Europe, to do with the use of middlemen to pay bribes, could spread to the United States, which typically imposes much higher fines and stiffer court judgments. In an industry that relies heavily on ties with government, Airbus could also be at a disadvantage competing for contracts, or even be frozen out altogether.The disclosure raised the prospect that corruption investigations involving the company in Europe, to do with the use of middlemen to pay bribes, could spread to the United States, which typically imposes much higher fines and stiffer court judgments. In an industry that relies heavily on ties with government, Airbus could also be at a disadvantage competing for contracts, or even be frozen out altogether.
Airbus, based in Toulouse, France, is under investigation by the British and French authorities for possible use of intermediaries to pay bribes related to the sale of commercial aircraft. In addition, the German and Austrian authorities are investigating bribery allegations tied to the sale of Eurofighter jets to Austria in 2003. Airbus also has a unit in Columbus, Miss., that makes helicopters for civilian and military buyers.Airbus, based in Toulouse, France, is under investigation by the British and French authorities for possible use of intermediaries to pay bribes related to the sale of commercial aircraft. In addition, the German and Austrian authorities are investigating bribery allegations tied to the sale of Eurofighter jets to Austria in 2003. Airbus also has a unit in Columbus, Miss., that makes helicopters for civilian and military buyers.
In its quarterly financial report on Tuesday, Airbus warned that penalties from the European investigations could have a significant effect on its finances. The company said that net profit from July through September rose sevenfold to 348 million euros, or $405 million, mainly because of favorable currency exchange rates. Sales rose 2 percent to €14.2 billion.In its quarterly financial report on Tuesday, Airbus warned that penalties from the European investigations could have a significant effect on its finances. The company said that net profit from July through September rose sevenfold to 348 million euros, or $405 million, mainly because of favorable currency exchange rates. Sales rose 2 percent to €14.2 billion.
The false information sent to the State Department was related to defense products or services, but the company did not say which kind. A company spokesman declined to comment on Tuesday.The false information sent to the State Department was related to defense products or services, but the company did not say which kind. A company spokesman declined to comment on Tuesday.
Airbus said it discovered the false reporting during an internal review and volunteered the information to the State Department.Airbus said it discovered the false reporting during an internal review and volunteered the information to the State Department.
“Following a review of its U.S. regulatory compliance procedures,” the company said in a statement, “Airbus has discovered and subsequently informed relevant U.S. authorities of its findings concerning certain inaccuracies in filings made with the U.S. Department of State.” The company said it was cooperating with the United States authorities. “Following a review of its U.S. regulatory compliance procedures,” the company said in a statement, “Airbus has discovered and subsequently informed relevant U.S. authorities of its findings concerning certain inaccuracies in filings made with the U.S. Department of State.”
Airbus shares rose as much as 3.7 percent in midday trading in Paris on Tuesday. The French, German and Spanish governments own about 26 percent of the shares and the rest are traded publicly. The company said it was cooperating with the United States authorities.
A State Department spokesman declined to comment on the specifics on the Airbus disclosure.
Airbus shares rose 3.6 percent in trading in Paris on Tuesday. The French, German and Spanish governments own about 26 percent of the shares and the rest are traded publicly.