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SFO launches Airbus probe

The Serious Fraud Office has opened a criminal investigation into allegations of “fraud, bribery and corruption” in the civil aviation business of Airbus Group

THE Serious Fraud Office has opened a criminal investigation into allegations of “fraud, bribery and corruption” in the civil aviation business of Airbus Group.

The allegations relate to irregularities concerning third party consultants, the SFO said in a statement.

The aircraft manufacturer, which is headquartered in France but employs around 100,000 people in the UK, said in a statement that it continued to co-operate with the investigation, which was launched in June.

Airbus’s A380 passenger place, whose wings are built in the UK, is used by 13 airlines around the world, including Qatar Airways, China Southern Airlines and Lufthansa.

In April Airbus informed the UK Export Finance department about “certain inaccuracies to applications” for export finance credit. At the time Airbus put out a statement which was light on detail but suggested Airbus failed to inform UK authorities that it used agents or intermediaries in the deals it was asking the UK government to cover with financing guarantees. Following the revelation UK Export Finance froze Airbus’s export credit applications.

In 2010 the government passed the UK Bribery Act, considered to be among the toughest anti-corruption laws in the world, with the aim of tackling domestic and foreign corporate fraud and bribery.

Last year Britain came 10th out of more than 170 countries in Transparency International’s corruption perceptions index, an improvement on its score in 2012, which can be partly attributed to its new anti-fraud laws.

The Act, which came into force in July 2011, affects companies incorporated in or carrying out business in the UK. It increases the liability risks for companies, directors and individuals by placing strict legal responsibility on companies for failure to prevent bribes being given. The Act has extra-territorial reach both for UK companies operating abroad and for overseas companies with a presence in the UK

Companies with strong internal controls are less likely to suffer from fraud. However, despite the increasing threat of newer types of frauds such as cyber crime and continued traditional forms of wrongdoing, a KPMG study this year found executives are not doing enough to strengthen internal controls. Weak internal controls were a factor for 61 percent of fraudsters interviewed for the study (72% in Europe).

The number of fraudsters who committed an act of fraud because the opportunity presented itself due to weak internal controls leaped from 18% in 2013 to 27% in this year’s study, KPMG found.

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