BAE systems to pay $400 million to settle on regulatory charges with US, UK governments

BAE systems to pay $400M on regulatory charges

LONDON — Defense company BAE Systems PLC said Friday it would pay fines totaling more than $400 million after reaching settlements with Britain’s anti-fraud agency and the U.S. Justice Department to end decades-long corruption investigations into the company.

The world’s No. 2 defense contractor said under its agreement with Washington, it would plead guilty to one charge of conspiring to make false statements to the U.S. government over regulatory filings in 2000 and 2002. The agreement was subject to court approval, it said.

In Britain, it said it would plead guilty to one charge of breach of duty to keep proper accounting records in relation to payments it made to a former marketing adviser in Tanzania in 1999.

The bulk of the fines would be paid to the U.S. authorities. In Britain, BAE will be paying penalties of 30 million pounds ($46.9 million), including a charity payment to Tanzania.

BAE says it “regrets and accepts full responsibility for these past shortcomings,” but emphasized that all the offenses happened years ago and do not reflect the company’s current behavior.

“We’re satisfied with that global settlement,” Chairman Dick Olver told reporters in a telephone conference call. “It allows us to draw a very heavy line under the legacy, the historical issues. We’re obviously pleased to see uncertainty removed for our shareholders.”

Olver said Friday’s announcement did not relate to accusations of corruption or bribery.

Britain’s Serious Fraud Office said it was pleased with Friday’s settlement. It said it had decided that no further prosecutions would be brought against BAE and that it was dropping all corruption investigations into the company.

The anti-fraud agency began probing BAE’s various overseas activities in the 1980s, including bribery it allegedly paid out in the lucrative Al-Yamamah arms deal with Saudi Arabia. The agency later had to drop that investigation because of objection from Saudi Arabia.

The agency also probed BAE involving alleged bribes behind a Czech deal to lease Anglo-Swedish Gripen warplanes; payments allegedly made on a sale of two frigates to Romania; and 100 million pounds ($160 million) in allegedly secret payments in a weapons deal with South Africa.

The agency would drop all those investigations with Friday’s announcement, spokesman Sam Jaffa said.

Olver said in a statement that in the years since the activities referred to in the settlement, the company had systematically enhanced its compliance policies and processes.