BAE Systems pays £286m over corruption charges
Friday 05 February 2010
Defence giant BAE Systems said today it had agreed to pay fines totalling £286 million to settle corruption charges with the Serious Fraud Office and US Department of Justice.
The move, which will see the firm plead guilty to two charges, follows an investigation into deals that BAE won from countries including Tanzania, the Czech Republic, Romania and South Africa.
BAE will pay 400 million US dollars (£255.7 million) to the Department of Justice and £30 million to the SFO, the firm said.
The company will plead guilty in court to an offence of failing to keep "reasonably accurate accounting records" in its activities in Tanzania, the SFO said.
The payout to the SFO will be made as an "ex gratia payment" for the benefit of the people of Tanzania.
Richard Alderman, director of the SFO, said: "I am very pleased with the global outcome achieved collaboratively with the DoJ.
"This is a first and it brings a pragmatic end to a long-running and wide-ranging investigation."
Under the agreement with the DoJ, BAE Systems will plead guilty to one charge of conspiring to make false statements to the US government.
BAE said the settlement would allow it to "deal finally with significant legacy issues" which have overshadowed the company.
Chairman Dick Olver said: "In 2000, the company gave a commitment to the US government that it would establish and comply with defined US regulatory requirements within a certain period and it subsequently failed to honour this commitment or to disclose its shortcomings.
"In connection with the sale of a radar system by the company to Tanzania in 1999, the company made commission payments to a marketing adviser and failed to accurately record such payments in its accounting records."
He added that the company "failed to scrutinise these records adequately to ensure that they were reasonably accurate and permitted them to remain uncorrected".
The firm said that, in the years since the incidents, the group had "systematically enhanced" its compliance policies and procedures.
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