Canadian Manufacturing

Rolls Royce to pay US$880M to settle bribery and fraud case

This was the largest ever investigation carried out by the U.K.'s Serious Fraud Office and covers 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery

January 18, 2017  by Danica Kirka, The Associated Press

Rolls-Royce makes jet engines. PHOTO Rolls-Royce

LONDON—Jet engine maker Rolls Royce has agreed to pay 671 million pounds (US$808 million) to settle bribery and corruption charges brought by authorities in Britain, the U.S. and Brazil.

U.K. High Court judge Brian Leveson approved a deferred prosecution agreement during a public hearing on Jan. 17. The agreement follows a four year investigation, which will continue to look at the conduct of individuals.

Britain’s Serious Fraud Office said the matter covers 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery in conduct spanning three decades. It was the largest ever investigation carried out by the Serious Fraud Office and cost 13 million pounds.

“Bribery harms the reputation of the U.K. as a safe place to do business,” said David Green, the SFO director. He said the agreement “allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business.”


Rolls’ civil aerospace, defence aerospace businesses and former energy businesses were involved in matters relating to aero engines, energy systems and related services. The U.K.’s agreement covered conduct in Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.

U.S. Justice Department officials have said that part of the business obtained through the scheme was for Rolls-Royce Energy Systems Inc., a Rolls-Royce subsidiary based in Mount Vernon, Ohio.

Rolls-Royce said in a statement that the “voluntary agreements” will result in the suspension of prosecution. Company CEO Warren East apologized and said the behaviour of the past was “completely unacceptable.”

“This was unworthy of everything which Rolls-Royce stands for, and that our people, customers, investors and partners rightly expect from us,” he said in a statement. “The past practices that have been uncovered do not reflect the manner in which Rolls-Royce does business today.”

The company said it had co-operated with authorities and would continue to do so.

Under the terms of the deal, the company will pay 497 million pounds plus interest to British authorities on a schedule of up to five years. It will pay the U.S. authorities $169 million and $25.6 million to the Brazilians.

Transparency International’s U.K. executive director Robert Barrington says individuals should be prosecuted so the case serves as a deterrent to bribery.

He argued, however, that the hint of prosecutions of individuals involved is too vague to assess whether the public interest has really been served. “A fine is insufficient as a punishment and deterrent, because at face value, it sends an unfortunate message that large companies can escape criminal prosecution by paying their way out _ somewhat ironically for a bribery case,” Barrington said.

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