Airbus fined US$126 million over sale of missiles to Taiwan

Europe’s largest aerospace company says subsidiary behind the contract, Matra Defense, is ‘reviewing’ the penalty

PUBLISHED : Sunday, 14 January, 2018, 4:01pm
UPDATED : Sunday, 14 January, 2018, 8:54pm

Airbus said on Saturday it had been ordered to pay 104 million (US$126 million) in fines over a missile sale to Taiwan in 1992, the latest French company to reach a settlement over disputes arising from one of the country’s biggest ever arms sales.

The scandal around French arms sales to the island in the early 1990s was one of a series of cases that underpinned accusations of widespread corruption during the final years of late French president Francois Mitterand.

Airbus, which this week agreed to sell mainland China 184 A320 planes by 2020, said in a statement it had been ordered to pay the fine “for a complaint of breach of contract concerning the sale of missiles”.

3, 2, 1 ... lift-off for a barrage of Chinese military missile tests

It said in a statement that its subsidiary behind the missile contract, Matra Defense, was “reviewing the award before evaluating the next steps to take”.

Matra Defense SAS joined the Airbus group in 1998.

The arbitration fine comes three months after Dassault Aviation, radar supplier Thales and engine maker Safran said they had been fined a combined 227 million in Taiwan to settle the 25-year-old dispute over the wrongful use of commissions in the sale of 60 Mirage fighters to the island.

“This was a commercial dispute and not a corruption allegation,” an Airbus spokesman said.

Taipei brands China’s new aviation routes in Taiwan Strait irresponsible

When asked about the case by Taiwan’s Central News Agency, the island’s defence ministry spokesman Chen Chung-ji said it had no comment on the matter and would not give further information about the case.

In a separate case, Airbus said it was in talks with prosecutors in Munich that could lead to the termination of their investigation into alleged corruption in the sale of Eurofighter combat jets to Austria in 2003.

Is China planning to take Taiwan by force in 2020?

That investigation is one of several corruption cases still facing Europe’s largest aerospace company.

Airbus did not mention the status of a parallel Austrian investigation into the same arms deal.

The company and individuals including CEO Tom Enders are being investigated in Vienna over industrial deals that were built into the Eurofighter sale and have denied any wrongdoing.

Separately, Airbus faces British and French investigations into the use of middlemen in commercial airliner sales.

Additional reporting by Agence France-Presse