TISL welcomes UL suing Airbus, calls for further domestic action

• Says concerned about lack of accountability for actions of those involved locally
• TISL has corresponded with SFO UK regarding incident
• Calls on Govt. to introduce Proceeds of Crime Law

Transparency International Sri Lanka (TISL) has welcomed the decision by SriLankan Airlines to sue the company Airbus SE for $ 1 billion damages, loss of reputation, reimbursement of costs and interest as exclusively reported by the Daily FT last week. 

Sri Lankan Airlines has also called for the cancellation of the purchase agreement for four A350-900 Airbus aircraft and the return of the advance payment of $ 19 million made for the aircraft. 

The move by SriLankan Airlines follows information revealed through a Deferred Prosecution Agreement between the Serious Fraud Office (SFO), UK and Airbus SE, in relation to the bribing of public officials by Airbus SE in several countries including Sri Lanka. 

While commending the move by SriLankan Airlines to sue Airbus, TISL in a statement said it is concerned that the alleged perpetrators of corruption in Sri Lanka are yet to be held accountable domestically.

TISL has been constantly advocating for action by the Sri Lankan authorities to hold to account those responsible for the significant losses inflicted on the Sri Lankan public through this incident, amounting to at least $ 98 million (approximately Rs. 19 billion). This money alone could have been used to import around 24.5 million doses of COVID vaccines at a time when the country is under severe financial stress in a pandemic-stricken economy.

In March 2020 TISL wrote to the Serious Fraud Office (SFO) in the United Kingdom regarding the Deferred Prosecution Agreement, highlighting concerns whether the “General Principles to compensate overseas victims (including affected states) in bribery, corruption and economic crimes cases” had been given due consideration during the investigation and negotiation phases. TISL also highlighted the fact that on five prior instances, the SFO worked together with the National Crime Agency (NCA) and the Crown Prosecution Service (CPS) to secure compensation for overseas victims totalling £ 42.9 million.

The SFO responding to TISL in June 2020, stated that it was challenging to identify a quantifiable loss arising from the Airbus deal and due to this and a number of other reasons, there was no direction made for victim compensation from Airbus SE. It added that there was no evidence to suggest that any of the products or services which Airbus sold to customers were defective or unwanted. 

However, the SFO did highlight that the Deferred Prosecution Agreement did grant room for victims to claim compensation. The move by SriLankan Airlines to seek compensation from Airbus comes within this context and should be commended.

However, it should be noted that Sri Lanka does not have a comprehensive legal framework for the management of recovered assets. As a signatory to the UN Convention Against Corruption (UNCAC), Sri Lanka is responsible to cooperate in the international arena to combat the transfer of proceeds of crime and to recover such proceeds. Sri Lanka reiterated this commitment in 2015 at the London Anti-Corruption Summit and at the Global Forum on Asset Recovery (GFAR) in 2017, pledging to prioritise the recovery of stolen assets.

In 2018, TISL contributed to a multistakeholder effort to draft a policy framework on stolen asset recovery, which provides a proposed legal framework to investigate, identify, trace, seize, and transfer to Sri Lanka and manage such assets. Given the possibility of lost monies being returned to Sri Lanka as a result of the action filed by the authorities in this case, it is vital that this policy framework be converted into law, so that the recovery process may be managed effectively.

TISL is also concerned that the alleged perpetrators of this act of grand corruption in Sri Lanka are yet to be held accountable domestically. Commending the legal action taken, TISL as a longstanding advocate for accountability on the bribery involving Airbus SE, calls upon the Government to take action against the implicated individuals domestically and to expedite the development of a Proceeds of Crime law.