Boeing pays USD 2.5 billion in order to resolve criminal charges after two 737 MAX crashes

On 7 January 2020, the U.S. aircraft manufacturer Boeing has entered into an agreement with the U.S. Department of Justice (hereinafter “DOJ”) to resolve a criminal charge related to a conspiracy to defraud the U.S. Federal Aviation Administration’s Aircraft Evaluation Group (hereinafter “FAA AEG”) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.

According to the DOJ’s press release, Boeing accepted to pay USD 2.5 billion to resolve a DOJ criminal investigation and admitted that employees deceived aviation regulators about safety issues that led two crashes of Boeing’s 737 MAX model occurred in October 2018 and March 2019. The settlement includes a nearly USD 244 million fine as well as almost USD 2.3 billion in compensation to airline customers and families of the 346 people who died in the crashes.

Since then, U.S. federal prosecutors have been investigating the role of Boeing employees who interacted with the FAA AEG about the design of the 737 MAX and how much pilot training would be required for the new model. Pursuant to the DOJ, the Boeing employees deceived the FAA AEG about an important aircraft part that impacted the flight control system of the Boeing 737 MAX. Because of this deception, a key document published by the FAA AEG lacked information about this important aircraft part, and in turn, airplane manuals and pilot-training materials lacked information about it.

According to an article published in the Wall Street Journal, U.S. lawyers say that Boeing’s USD 2.5 billion settlement would underscore the continuing focus by prosecutors on ensuring that compliance programs are effectively structured and independent of certain business considerations.

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