Airbus has been fined £6.4m in the UK after the European aerospace company admitted to breaches of rules designed to prevent sensitive goods such as military hardware from falling into the wrong hands. The company, which sits at the heart of the European defence industry, said it had paid the settlement to HM Revenue and Customs after self-reporting breaches that occurred before November 2022.
Nature of the Breaches
HMRC said the offences related to Airbus's failure to keep records of the export or transfer of controlled technology over a sustained period. The UK's export control licensing regime is designed to prevent strategic goods such as military hardware and items that can be used in weapons of mass destruction programmes from being sold overseas or to sanctioned individuals and countries. The £6.4m payment is the highest out-of-court settlement ever reached by HMRC for strategic export offences and more than 10 times higher than the £569,100 that an Aberdeen-based division of Petrofac paid last month for breaching Russia sanctions regulations.
Airbus's Role in Defence
Airbus cooperated with HMRC's investigation, but its failure to follow the rules is particularly notable given its pivotal role in Europe's defence sector, working on projects including the Eurofighter Typhoon fighter jet and the A400M heavy cargo aircraft. Edwige Hill, deputy director of HMRC's fraud investigation service, said: "The UK operates a strict licensing regime … to ensure military equipment does not fall into the wrong hands. We use a range of powers to ensure effective controls and enforcement on military goods, which contributes to the UK's national security. This settlement shows we will not hesitate to take action."
Specific Licence Failures
HMRC said the breaches included: failing to keep accurate records of transfers of controlled technology as per the conditions of three open general export licences (Ogels); failing to keep registers in relation to Ogels; failing to keep accurate records contrary to the conditions of one Ogel; and a failure of licence conditions on a standard individual export licence (Siel). An Ogel is a reusable, pre-approved licence for multiple shipments of items generally considered low-risk, while a Siel is a more detailed permission requiring government approval for a specific quantity of items going to a single, named end-user.
Company Response
The fine was issued to Airbus Operations Limited (AOL), a UK division of Airbus, whose manufacturing headquarters are in Toulouse, France. In its statement to investors, the company said: "AOL fully cooperated with the investigation and implemented appropriate remediation measures. This settlement closes and fully resolves the matter." The sanctions lawyer Nigel Kushner, chief executive of law firm W Legal, said the fine would shake up compliance. "This is a wake up call for UK exporters. It is not enough to obtain licences or rest on your laurels utilising pre-approved licences available to all. It is critical to comply with the licence terms, in particular record keeping and updating registers. The failure to do so is an offence in itself as Airbus have been reminded to its cost."
Previous Penalties
Airbus agreed to pay a record £3bn in penalties in 2020 after admitting it had paid huge bribes on an "endemic" basis to land contracts in 20 countries. The latest fine underscores ongoing scrutiny of the company's compliance practices.
