BAE Systems completes payment to Tanzania

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BAE Systems will pay £29.5 million to educational projects in Tanzania as part of a settlement with the UK’s Serious Fraud Office (SFO) regarding accounting records covering payments to a former adviser in Tanzania.

BAE Systems said it had signed a Memorandum of Understanding with the government of Tanzania, the Department for International Development (DFID) and the Serious Fraud Office enabling the payment of £29.5 million, plus accrued interest, following a settlement agreed between BAE Systems and the SFO.
“We are glad to finally be able to make the payment to the Government of Tanzania and bring this matter to a close,” said Dick Olver, BAE Systems Chairman. “We are grateful to DFID for their work in agreeing the Memorandum of Understanding with the Government of Tanzania.”

The money will be spent on purchasing textbooks for all 16 000 primary schools in the country, benefiting 8.3 million children. Up to £5 million will go toward the purchase of desks in nine areas where the need is greatest.

Funds will also be used to provide all 175 000 primary school teachers with teachers’ guides, syllabi and syllabi guides.

In December 2010, BAE Systems was fined £500 000 by a London court after pleading guilty to making accounting errors in Tanzania, ending a six-year investigation into its activities. The court also ordered the company to pay £225 000 pounds in costs.

The fine signs off a settlement agreed between Britain’s Serious Fraud Office (SFO) and BAE in February 2010 when the British defence firm entered into a plea bargain deal with the UK fraud watchdog.

Under the agreement with the SFO, BAE Systems agreed to pay a £30 million fine and in November 2010 pleaded guilty to one charge of breach of duty over the keeping of accounting records covering payments made to the former adviser in Tanzania.

The fine follows an enquiry into a £28 million deal to sell a radar system to Tanzania to be used at Dar-es-Salaam airport.
“The residue of the agreed £30 million will be paid by BAE to the people of Tanzania by a mechanism yet to be agreed,” an SFO spokesman said at the time.



As part of the UK plea bargain, attempts by the SFO to prosecute BAE for alleged corruption in Tanzania, the Czech Republic, Romania and South Africa were dropped.