Publication: Sapa Issued: London Date: 2007-06-26 Reporter: Sapa

US to Probe British Arms Firm over Saudi Arabia Deal

 

Publication 

Sapa-DPA
BRITAIN-DEFENCE-SAUDI

Issued

 London
Date

2007-06-26

Reporter

Sapa

 

Britain's leading defence procurer BAE Systems said Tuesday that it was being investigated by the US Department of Justice in an anti-corruption probe concerning a major arms deal with Saudi Arabia.

According to BAE, the probe will look at its compliance with anti-corruption laws including its business "concerning the kingdom of Saudi Arabia".

The company is facing allegations that it ran a multi-million pound slush fund to help it win a giant plane and military equipment order from Saudi Arabia, the so-called Al Yamamah deal, signed in 1985.

BAE has always argued that it acted lawfully at all times.

The allegations of illegal payments by BAE date back to the 1980s deal, worth 43 billion pounds (85 billion dollars) under which Tornado jets and other military equipment were supplied to Saudi Arabia.

Analysts said the US probe comes at a bad time for BAE, which has recently attempted to expand its business with the US, aiming to become the Pentagon's largest defence supplier.

An investigation in Britain by the Serious Fraud Office (SFO) into the Al Yamamah deal was stopped in December 2006 on grounds of national security, following government intervention.

With acknowledgement to Sapa.