Fokker Technologies Group

"A unit of Dutch aerospace company Fokker Technologies Holding BV is poised to secure a reprieve from criminal charges that it violated U.S. sanctions against Iran, two people briefed on the matter said. The Justice Department doesn’t plan to charge any executives and is prepared to offer Fokker Services a deferred-prosecution agreement for selling aviation parts and maintenance services to at least one Iranian company before 2010, said the people, who asked not to be named because the matter isn’t public. The pending accord, which the people said would include fines, would protect other Fokker units that supply the Pentagon’s F-35 fighter program from possibly losing their eligibility to work on that project. The U.S. has struck similar agreements with banks since stepping up its pursuit of trade with countries including Iran, Sudan and Libya in 2008. ‘A conviction would have collateral effects on government contracting,’ said Eric Dubelier, an attorney at Reed Smith LLP who previously worked on export violation cases as a prosecutor and isn’t involved in the case. ‘If this company is a supplier to the U.S. military, there could be high-level pressure and discussions taking place as to the consequences of making people plead guilty.’ Fokker Services isn’t involved in the F-35 project and the infractions didn’t involve materials related to the program, the company said. ‘The discussions with the U.S. authorities are continuing and the timing and terms of a final resolution are not yet known,’ Fokker spokeswoman Marianne Mulder said in an e-mail. Andrew Ames, a Justice Department spokesman, declined to comment on the matter…’In 2010, Fokker Services made a voluntary disclosure to the U.S. authorities regarding historic export control issues, implemented remedial actions on its own accord, and has been cooperating with the U.S. authorities on the matters disclosed since 2010,’ Mulder said in the e-mailed statement…Fokker is also in talks to settle civil probes by the Commerce Department and Treasury’s Office of Foreign Assets Control, one of the two people said. Those investigations may result in fines, according to the person briefed on the matter. Fokker, which has been a contractor with the F-35 since 2002, announced in April that it signed contracts worth 60 million euros ($81.9 million) to supply in-flight opening doors and flaps. Two months later,the company secured another contract worth 40 million euros ($54.2 million) for electrical wiring systems. Fokker’s 2012 revenue was 769 million euros ($1.04 billion), according to its most recent annual report. The Papendrecht, Netherlands-based company said in the report that it wanted to resolve the sanctions probe by the end of 2013. The F-35 program is a $392 billion weapons system being produced by Lockheed Martin Corp. (LMT) Laurie Tortorello, a spokeswoman for Lockheed Martin, declined to comment on the Fokker investigation…Some companies involved in the project have drawn scrutiny in recent weeks…Honeywell International Inc. said Jan. 12 that it was cooperating with a probe of its production of electrical sensors that were made in China for F-35 fighters.” (Bloomberg, “Fokker Said Set for U.S. Reprieve Deal on Iran Sanctions,” 1/29/14) (http://www.unitedagainstnucleariran.com/company/honeywell) (http://www.bloomberg.com/news/2014-01-30/fokker-said-set-for-u-s-reprieve-deal-on-iran-sanctions.html)

--

“The U.S. Attorney’s Office for the District of Columbia announced Thursday that a subsidiary of the Dutch aerospace company Fokker Technologies Holding BV will forfeit $21 million for selling U.S.-made goods to Iran, Sudan and Burma in violation of trade sanctions.As part of a five-year scheme, Fokker Services provided aircraft parts, technology and services to the countries, which have been sanctioned by the United States. The company admitted to more than 1,110 shipments of banned parts to the three countries. ‘For years, Fokker Services treated U.S. export laws as inconveniences to be ‘worked around’ through deceit and trickery,’ U.S. Attorney Ronald C. Machen Jr. said in a statement. ‘Today’s prosecution sends a clear message that there will be consequences for those who seek to profit from violating and circumventing U.S. trade laws.’ According to court documents, Fokker Services relied on a number of “work-arounds” in U.S.-sanctioned countries that were 'specifically designed to continue the company’s profit earnings in the sanctioned countries’ markets.' The documents state, ’On one occasion, Fokker Services provided a U.S. aerospace company with a work order that falsely represented that the aircraft part belonged to an airplane owned by a Portuguese airline when, in reality, the part actually belonged to an Iran Air aircraft. The U.S. aerospace company fixed the part and returned it to Fokker Services, who then shipped the part to Iran.’” (The Washington Post, “Dutch aerospace company Fokker hit with $21 million fine in sanctions case,” 6/5/14) (http://www.washingtonpost.com/world/national-security/dutch-aerospace-company-fokker-hit-with-21-million-fine-in-sanctions-case/2014/06/05/c2890542-ecbd-11e3-b98c-72cef4a00499_story.html)

“Fokker Services BV’s $21 million settlement with the U.S. for violating Iran sanctions was delayed by a federal judge who questioned the deal’s terms and whether the aerospace company had voluntarily disclosed its wrongdoing. U.S. District Judge Richard Leon set a hearing for July 24 for attorneys to address misgivings that include the size of the penalty levied on Fokker, the lack of charges against individuals and the scope of court oversight of the accord. Leon must sign off on the deferred-prosecution agreement before it can take effect. ‘These are all components of the deal I have great concerns about,’ Leon said during a hearing yesterday in Washington. The judge said he was also troubled by a report in Bloomberg News that raised questions about whether Fokker voluntarily disclosed in 2010 that it had sold aviation parts and services to Iranian clients, including the military. The article cited three people who claimed the government learned about the violations in 2008, two years before Fokker disclosed them." (Bloomberg, "Fokker Iran Sanctions Deal Stalls on Judge’s Concerns," 7/9/14) (http://www.bloomberg.com/news/2014-07-10/fokker-iran-sanctions-deal-stalls-on-judge-s-concerns.html)

---