Airbus ordered to pay $99m fine in Eurofighter case

European aircraft manufacturer Airbus on February 9 said it had agreed to pay a fine of 81.25 million euros ($99 million) to end a German corruption probe into the 2003 sale of Eurofighter jets to Austria. (AFP)
Updated 09 February 2018

Airbus ordered to pay $99m fine in Eurofighter case

FRANKFURT: German prosecutors have ordered Airbus to pay 81.25 million euros ($99 million) to settle one of two investigations into alleged corruption surrounding the sale of Eurofighter combat jets to Austria in 2003, the two sides said on Friday.
The settlement includes an administrative fine of 250,000 euros and “disgorgement” — which legal experts broadly define as the recovery of ill-gotten gains — of 81 million euros.
Munich prosecutors have been investigating whether Airbus issued bribes to win the $2 billion contract: charges it denies.
In a statement, prosecutors said they had not found evidence of bribery but that Airbus had been unable to account for over 100 million euros in payments to two shell companies.
EADS, as the main Airbus parent group was known at the time, sent funds totalling a triple-digit-million euro amount to Vector Aerospace LLP and City Chambers Limited, they added.
Most of these funds, by evading internal control mechanisms, had been used for what the prosecutors said were “unclear purposes,” adding it could not be finally determined what the funds had been spent on.
Airbus said in a statement the penalty, which it had agreed to pay, related to the “negligent breach of supervisory duties” by unidentified members of Airbus Defense and Space’s former management.
The former managers failed to ensure proper controls that would have prevented payments to “business partners” without the company getting proven services in exchange.
Airbus regularly uses the term “business partners” to refer to foreign sales agents or intermediaries.
It is being investigated separately in France and Britain over the handling of agents in the sale of commercial jets.
While Friday’s settlement ends the Munich investigation, Airbus and individuals including Chief Executive Tom Enders, who headed the company’s defense business from 2000 to 2005, face an ongoing investigation in Vienna into the Eurofighter deal.
Airbus and Enders have denied wrongdoing and accused the Austrian government of playing politics with the investigation.


Italy cabinet approves 2020 budget that cuts taxes, cracks down on evaders

Updated 45 min 58 sec ago

Italy cabinet approves 2020 budget that cuts taxes, cracks down on evaders

  • Italian budget draft to be submitted to Brussels
  • Budget drops previous commitment to reduce deficit

ROME: Italy’s government approved a draft 2020 budget in the early hours of Wednesday that aims to cut taxes for middle-earners and crack down on tax evaders, while holding the deficit at the same level as this year, government officials said.
The package was agreed at a cabinet meeting of the anti-establishment 5-Star Movement and its center-left coalition partner the Democratic Party. It will now be sent to Brussels for scrutiny by the European Commission.
The budget scraps a hefty increase in sales tax worth 23 billion euros ($25.35 billion) which had been scheduled to take effect in January, but which the coalition feared would push Italy’s already-stagnant economy into recession.
However, since setting the economic targets that provide the framework for the budget in September, the ruling parties have struggled to agree on many of the measures to adopt.
Full details of all the agreed measures were not immediately available, but a final version of the text seen by Reuters ahead of the late night cabinet meeting showed the government planned income tax cuts for middle-earners. The reduction will cost state coffers some 3 billion euros in 2020.
The financial bill targets the 2020 deficit to remain at 2.2% of gross domestic product for a third consecutive year.
Deputy Economy Minister Laura Castelli, from the 5-Star Movement, said in a statement on Tuesday that the lengthy negotiations with the PD had yielded “an expansionary budget” that will increase benefits for poor families and the disabled.
To help finance these measures, the government has put together a raft of measures to curb rampant tax evasion which costs the state some 109 billion euros every year, according to Treasury estimates.
The budget must be presented to parliament by Oct. 20 and approved in both houses by the end of this year.
It remains to be seen whether it will be rubber-stamped by the European Commission.
The package targets the structural deficit — which strips out the effects of economic growth fluctuations — to rise by 0.1% of GDP next year, reversing a commitment made in July to reduce it by 0.6 points.
The anti-tax-evasion plan, targeted to raise an ambitious 7 billion euros, aims to encourage the use of easily traced credit and debit cards rather than opaque cash transactions.
The budget draft seen by Reuters introduces sanctions of up to 2,000 euros for retailers and service providers that do not accept credit cards. It lowers to 2,000 euros from 3,000 the threshold above which it is illegal to make cash transactions. The amount is expected to be further pushed down to 1,000 euros from 2022.
To encourage people to ask retailers for receipts, the budget also launches lotteries in which holders of the winning receipts, identified with a number, get a tax-free cash prize.
These “receipt lotteries” have already been adopted in several countries including Portugal, Slovakia and Malta.
A new “web-tax” on digital companies aims to raise around 600 million euros each year, the draft showed.
The levy, applied on companies with annual global revenues worth at least 750 million euros and digital services exceeding 5.5 million euros in Italy, obliges them to pay a 3% levy on Internet transactions conducted in Italy.