BAE Systems says it has "drawn a line under the past" after reaching settlements with the UK Serious Fraud Office and US Department of Justice over its past business conduct.
Following an SFO investigation into the sale of radar equipment to Tanzania in 1999 that lasted more than five years, BAE says it will plead guilty "to one charge of breach of duty to keep accounting records in relation to payments made to a former marketing adviser". The admission of guilt stems from a failure "to accurately record such payments in accounting records", it adds.
BAE has announced a financial allocation of £30 million ($46.9 million), with this to cover a fine yet to be determined by the courts, "with the balance as a charitable payment for the benefit of Tanzania".
The SFO says it "has taken account of the implementation by BAE Systems of substantial ethical and compliance reforms ... and has determined that no further prosecutions will be brought against BAE Systems in relation to the matters that have been under investigation."
But the company's proposed settlement with the US DoJ - which still requires court approval - is much more financially damaging. Totalling $400 million, this relates to "one charge of conspiring to make false statements to the US government in connection with certain regulatory filings and undertakings", BAE says.
"In 2000, the company gave a commitment to the US government that it would establish and comply with defined regulatory requirements within a certain period. It subsequently failed to honour this commitment or to disclose its shortcomings," says BAE chairman Dick Olver. If approved, its settlement would also see it "make additional commitments concerning ongoing compliance".
Olver says BAE "very much regrets and accepts full responsibility for these past shortcomings". However, the official - who joined the company from BP in 2004 - notes: "In the years since the conduct referred to, the company has systematically enhanced its compliance policies and processes with a view to ensuring that it is as widely recognised for responsible conduct as it is for high-quality products and advanced technologies."