UK aerospace group Rolls-Royce has agreed to pay fines totalling £671m (US$816m) to settle bribery and corruption allegations with UK, US and Brazilian authorities.
Under a deferred prosecution agreement (DPA), the biggest single fine of £497m plus costs, will go to the Serious Fraud Office (SFO) in the UK, which started investigating claims in 2012 of wrongdoing overseas. At the time, the SFO asked the Rolls-Royce for information about alleged bribes offered to secure contracts in China, Indonesia and other markets.
Rolls-Royce is a major UK manufacturing exporter, producing engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations. The group has customers in more than 150 countries, which include more than 400 airlines and leasing customers.
A further penalty of US$170m (£141m) will go to the US Department of Justice (DoJ) and US$26m to Brazilian regulator Ministério Público Federal. “These are voluntary agreements which result in the suspension of a prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty,” Rolls-Royce stated.
A number of the bribery and corruption allegations date back more than 10 years and involve the group’s ‘intermediaries’, or local companies that handle sales, distribution, repair and maintenance on the group’s behalf in countries where it lacks a significant presence.
The DPA is only the third to be sanctioned by the SFO since their introduction into UK law in 2014. They provide companies with the option of paying a significant financial penalty but avoid prosecution, if they freely admit to economic crimes such as fraud or bribery. The SFO has been facing criticisms that it has made relatively little progress in cracking down on corporate wrongdoing since the 2011 Bribery Act, which made companies criminally liable for failing to prevent bribery.
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