The manufacturer risks criminal prosecution

On Tuesday evening, the US Department of Justice announced that Boeing faced criminal prosecution for failing to comply with an agreement reached in 2021, linked to the crash of two 737 MAXs. The company has until June 13 to respond to the notice filed by the Justice Department in a Texas federal court.

For several months, the aircraft manufacturer has been in turmoil, faced with multiple production problems. This is without taking into account several serious incidents, one of which occurred in the middle of the flight of a new plane from the American company Alaska Airlines, at the beginning of January.

What does the agreement reached in 2021 say

Dating back to January 2021, this agreement, known as deferred prosecution (DPA), was initiated by the Ministry of Justice. Accused of fraud in the 737 MAX certification process, Boeing agreed to pay $2.5 billion after the crashes of 2018 and 2019, which cost the lives of 346 people.

In addition to this heavy financial penalty, the aircraft manufacturer also committed to strengthening its compliance program, meeting regularly with those responsible for combating fraud and presenting annual reports on its progress. For example, the manufacturer was required to implement a quality control and ethics program and strengthen its controls to “effectively detect and deter violations of federal law.”

The deferred prosecution agreement ended on January 7. But at the end of this period, the Ministry of Justice still had six months to verify whether Boeing had respected its commitments. Unfortunately for the aircraft manufacturer, the courts ruled that this was not the case. A letter was therefore sent to federal judge Reed O’Connor, informing him that Boeing “did not respect its obligations” provided for in the agreement.

In addition to this decision by the Department of Justice, the American civil aviation regulator (FAA), for its part, launched an audit at Boeing. The American company has 90 days to put in place a “comprehensive action plan” to remedy the numerous non-compliance problems identified in recent months.

What risks does Boeing face?

According to John Coffee, a law professor at Columbia, it is entirely likely that the DPA will be extended. The courts could also appoint a supervisor with extensive supervisory powers. He considers it unlikely that leaders will be prosecuted. Yet this is what many families of victims are asking for. If they want the appointment of independent supervision, the families are mainly demanding that Boeing and its managers be tried before a criminal court. They will soon be received at the Ministry of Justice.

While awaiting the court’s decision, Boeing is truly under pressure. Due to numerous technical incidents, the company had to slow down its production and delivery rates while it resolved its quality control problems. The manufacturer also shows significant financial losses. This is extremely worrying, as John Coffee points out. “The group is in poor shape and a criminal trial would attract considerable attention, causing much greater economic damage,” he concluded.

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