BAE Systems fined £280m over corruption charges

City A.M. Reporter
BAE Systems is to pay a fine of $400m (£250m) after pleading guilty to a charge of conspiring to make false statements to the US government.

The UK's largest defence group has also reached agreement with the UK Serious Fraud Office (SFO) to plead guilty to breach of duty to keep accounting records.

That case is in relation to payments to a former marketing adviser in Tanzania.

It will pay a penalty of £30m over the UK offence – some of which will be a fine, some a charity payment.

The last of the offences was committed in 2002. BAE has since changed the way it conducts business.

The US fine, agreed with the Department of Justice, relates to undertakings it gave to the US government in 2000 and 2002 concerning way it carried out its business dealings.

It is understood that the Department of Justice concluded that BAE breached these undertakings in relation to payments and support services provided to an unnamed Saudi official, as part of the £40bn al-Yamamah contract to supply military equipment to Saudi Arabia.

There was also an infringement of restrictions on the supply of sensitive US technology in deals to supply aircraft in Hungary and the Czech Republic.

Britain's Serious Fraud Office was seeking a higher fine.

The British charge surrounds an £88m contract signed in 1999 to supply a radar system to Tanzania.

BAE has been advised by its lawyers that the fines are fair.