UK prosecutions over Airbus wrongdoing will need SFO to tread carefully

04 February 2020 00:00 by Martin Coyle

UK efforts to prosecute individuals on corruption charges linked to Airbus are likely to avoid French "blocking" laws but could be hindered by France's own efforts to prosecute wrongdoing.

Airbus was hit with a record penalty of 3.6 billion euros ($4 billion) on Friday after UK, US and French prosecutors uncovered massive corruption in multiple countries. With the plane maker accepting the penalty to wipe its slate clean, eyes turn to whether criminal charges will be brought against current or former executives responsible for the misconduct.

The UK's Serious Fraud Office, which has previously struggled to punish individuals suspected of corruption, said its investigation into Airbus remains live, potentially opening the door to prosecutions against executives or middlemen.

SFO director Lisa Osofsky yesterday praised the "beautiful" cooperation between her agency and France's Parquet National Financier, or PNF. "We worked seamlessly and hand in hand," she told BBC News. But she raised concerns about how French law might impact future attempts to go after individuals, particularly those closely linked to the country.

The "French Blocking Statute," introduced in 1968, allows for the rejection of foreign requests for evidence that have the potential to harm French citizens or businesses.

The law applied to Airbus during the investigation into the company, but the obstacles it created were overcome through a dedicated team. Six months after the SFO's investigation started in July 2016, the agency and the PNF formed a joint investigation team agreement that set the pathway for the ground-breaking investigation.

To comply with the blocking law, Airbus supplied the 30 million documents it handed over to the PNF, which then supplied them to the SFO, which reciprocated with evidence that it had uncovered.

"[France] still controls the flow of information," Osofsky said. "So we did it through this [joint investigation] team. Will we be able to get all the information we need if we want to do more? That's a question," she said.

Osofsky's concerns could be smoothed by the fact that Airbus has already shared, via the PNF, a huge number of documents potentially containing masses of evidence. According to French law this evidence, used against the company, would be able to be used in the course of a subsequent prosecution against individuals so long as the wrongdoing was correctly identified by the SFO at the outset.

The SFO could request further information from French prosecutors via the mutual legal request mechanism that governs cross-border investigation protocols. With a seemingly strong relationship existing between the two sets of prosecutors, this has the potential to work seamlessly.

This relationship will also be helped by Airbus, which under the terms of the UK deferred prosecution agreement must assist any future linked prosecutions.

MLex understands that one caveat is that for any material necessary for an SFO prosecution that is held in France or by a French company, the French Ministry of Justice would ultimately have the power to withhold or provide that material.

What is more difficult to predict is how France will treat any SFO efforts to prosecute individuals residing in France, where Airbus's operational headquarters are. France will likely resist any UK attempts to prosecute its own nationals where it has an opportunity to do so itself, wanting to take the lead in this regard.

That will see the SFO needing to pick its targets carefully and work closely with the French to prevent a tug of war.

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