Compliance Lessons from the Airbus Settlement
In addition to carrying the largest anti-corruption fine in history, the Airbus resolution also has the distinction of being only one of two that covered violation of the U.S. Arms Export Control Act and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in addition to corruption charges. The investigation also uncovered an elaborate system of code words used to mask corruption in email communications. In this second article examining the settlement, we look at how deep Airbus’ compliance failures went and offer lessons for companies seeking to avoid the same pitfalls. A first article examined the significant international cooperation between U.K., U.S. and French enforcement authorities that led to the settlement. A final article will analyze the company’s remediation efforts and how they led to a big penalty but no independent compliance monitor.
See “Airbus Case Marks a Milestone in International Anti Corruption Cooperation” (Feb. 19, 2020).
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Good Compliance Hygiene
Maintaining good compliance hygiene is an excellent first step in being able to spot code words during an investigation. “It is important for companies operating in challenging business environments, and in highly regulated industries, to conduct periodic compliance audits and other risk reviews,” Thad McBride, a partner at Bass Berry, told the Anti-Corruption Report.
Paying attention to the issues arising in a company’s industry or locations is another key element of good hygiene. “Companies learn based on the experiences of other companies,” Shawn Wright, a partner at Blank Rome, suggested and recommended that companies review their policies, procedures and internal controls on an annual basis in order to reassess risk based on what has been learned from other companies. Benchmarking exercises can help a company identify unusual patterns or use of unusual terms, and assess the conduct of its intermediaries. “Companies must constantly be aware of what is happening in the marketplace,” so that they can locate their risks and shift internal controls to minimize those risks, she said.
“Compliance Lessons from the Airbus Settlement,” by Megan Zwiebel was published in the Anti-Corruption Report on March 4, 2020.