Airbus Operations Limited has paid HMRC more than £6.4m after admitting multiple breaches of Strategic Export Controls, the largest compound settlement ever reached for strategic export offences.
The breaches were record-keeping failures rather than unlicensed exports. On multiple occasions, the company failed to keep accurate records of transfers of controlled technology as required by the conditions of three of its Open General Export Licences.
HMRC lists four categories of breach: Article 29(2)(a-g) on multiple occasions, for failing to keep accurate records of transfers of controlled technology under three OGELs; Article 29(3) on multiple occasions, for failing to keep registers relating to those licences; Article 29(2)(i) on multiple occasions, for records kept contrary to the conditions of one OGEL; and a single failure of licence conditions under a Standard Individual Export Licence.
Airbus Operations self-reported the breaches and, according to HMRC, fully cooperated with the investigation. The company disclosed the matter in its quarterly earnings notes.
Edwige Hill, Deputy Director in HMRC’s Fraud Investigation Service, said the UK “operates a strict licensing regime” to ensure military equipment does not fall into the wrong hands, adding that HMRC uses a range of powers on military goods and that “this settlement shows we will not hesitate to take action”.
A compound settlement allows HMRC to settle alleged offences under the Customs and Excise Management Act and the Export Control Order out of court through payment of a sum of money, avoiding legal proceedings. HMRC says it will only offer one where it believes there is sufficient evidence to prosecute. In setting the level, it weighs the seriousness of the offence, whether fraudulent intent can be proven, the type and value of goods involved, the offender’s history and the extent of cooperation, among other factors.
The naming of Airbus follows a change in approach. Petrofac Facilities Management Limited became the first company publicly named by HMRC for accepting such a penalty last month, a shift HMRC says will improve transparency and bring it into line with other UK law enforcement bodies. Both companies self-reported.
Payments of compound settlements are published by the Export Control Joint Unit through Notices to Exporters. HMRC also operates a voluntary disclosure process for unlicensed exports of strategic or sanctioned goods and transfers of controlled technology, with outcomes ranging from educational visits and written warnings to compound settlements or, in the most serious cases, referral to prosecutors.
£6.4M.. breach of Military Equipment export controls.. so we can spend this £6.4M on acquiring military equipment? 😁
I wonder if this would be a valid round-about way for private companies to fund military procurement