UK defence firm BAE Systems is being investigated over allegations of non-compliance with anti-corruption laws by the US Department of Justice.

The firm is facing allegations of making illegal payments to help it win aircraft and military-equipment contracts from Saudi Arabia in the 1980s, the BBC reported today.

Earlier this month, it was reported by the BBC and the Guardian newspaper that Bae had made payments worth hundreds of millions of pounds over a number of years to Prince Bandar, a leading member of the Saudi royal family.

The reports said the payments were discovered during a Serious Fraud Office investigation, though that probe was halted in December 2006 on grounds of national security.

The BBC’s business editor said the al-Yamamah contract was between the British and Saudi governments, not between BAE and Saudi Arabia, and that BAE was only the contractor.

Last week BAE effectively blacklisted a fifth of the world’s countries as part of moves to comply with anti-corruption laws.
BAE denies any wrongdoing but the probe comes as the UK’s Serious Fraud Office (SFO) continues to investigate six contracts signed in the 1990s where there is alleged to have been some corruption.