Airbus has been fined £6.4m in the UK after admitting to breaches of rules designed to prevent sensitive goods such as military hardware from falling into the wrong hands. The European aerospace company said it had paid the settlement to HM Revenue and Customs after self-reporting breaches that occurred before November 2022.
Breaches and settlement details
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 £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 cooperated with HMRC’s investigation. 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.
HMRC statement and licence violations
“The UK operates a strict licensing regime … to ensure military equipment does not fall into the wrong hands,” said Edwige Hill, deputy director of HMRC’s fraud investigation service. “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.”
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 low-risk items. A Siel requires government approval for a specific quantity of items to a single named end-user.
Company response and industry reaction
The fine was issued to Airbus Operations Limited (AOL), a UK division of Airbus. In a statement, the company said: “AOL fully cooperated with the investigation and implemented appropriate remediation measures. This settlement closes and fully resolves the matter.”
Nigel Kushner, a sanctions lawyer and chief executive of law firm W Legal, said: “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.”
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.
