By Christian Josi
Sanctions only work when nations and multinational corporations work together to impose them. A company ignoring sanctions should be treated as an outcast, not be rewarded for bad behavior. There are major companies that are openly flouting sanctions at the moment and not hiding it, because they don’t think there are any true ramifications for ignoring sanctions. They are wrong.
As we witness horrible death and destruction in Ukraine because of the Russian invasion, governments and corporations the world over have unified to isolate the Putin regime through extraordinarily serious sanctions. Sadly, there is at least one glaring exception to this unified front—Airbus (with whom I have taken issue before).
Airbus is not shy about claiming that they don’t support sanctions and are ok with business as usual with the government of Russia. Bloomberg reported on April 12, 2022, “Airbus SE defended its decision to keep importing Russian titanium, contending sanctions would hurt aerospace manufacturers who depend on the lightweight metal and wouldn’t deter Vladimir Putin after his invasion of Ukraine.” The report cited that Airbus is a major customer of Russia’s VSMPO-AVISMA Corp. and refuses to stop—or even pause–importing titanium from the company.
While thumbing their nose at these sanctions initially laid down by the United States, Airbus is simultaneously seeking a massive contract with the U.S. government to provide refueling tankers for the US Air Force. While most American companies are respecting the sanctions, Airbus want to have their cake and eat it too by trying to get the Pentagon to cut a check for billions and, to make matters worse, outsource the manufacturing of tankers to Europe.
This is not a new development for Airbus. The Bloomberg report indicated that Russia is a major partner for the company and “Russia provides about half of Airbus’s titanium needs, directly or through key suppliers,” while “the company has been stockpiling the metal since Russia’s 2014 annexation of Crimea, Chief Financial Officer Dominik Asam said.” So, the company increased imports from Russia after the invasion of Crimea by Russia. Somebody at the Department of Defense might want to take note of that fact and impose the sanction on Airbus that they should never be allowed to provide tankers, or any other aircraft, for the U.S. government.
The idea that American taxpayer cash could flow to a company ignoring sanctions on Russia seems ridiculous on its face. One could argue that any U.S. government contract with a company increasing business with Russia would reward bad behavior and provide violation of the spirit of sanctions. It would also punish American companies who contract with the Pentagon who are abiding by the rules of the road and respecting sanctions.
Although the most recent Pentagon budget appears to renew a contract with an American company to build the KC-46 Pegasus, Air Force Magazine reported on March 28, 2022, “the Air Force upped its 2022 buy from 14 to 15 in 2023, adding $220 million for the additional aircraft and getting the KC-46 rate up to where it was already planned to be.” Airbus had made a big push to provide tankers for the Air Force, but it looks like they have lost on the merits.
The message to Airbus at this time needs to be simple and crystal clear: if you don’t play ball with us and most of the international community to punish the Putin regime for its increasingly brazen crimes against humanity in Ukraine, do not expect us to play ball with you.
Christian Josi is a veteran of international politics and media. He is the Founder and Managing Director of C. Josi & Company, based in Virginia Beach, Virginia.