Are offsets in big deals truly not bribery?

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Offsets in Large Business Deals Are Not Necessarily Bribery If Funds Serve a Specific Purpose

Prime Minister Tun Dr Mahathir Mohamad has articulated the view that obtaining offsets in significant business transactions is a common practice, provided that the funds are not personally misappropriated. This perspective distinguishes between legitimate offsets, which can arise from purchasing goods at a premium, and bribery, which involves direct personal enrichment. The government's own procurement policies, for instance, incorporate offsets when acquiring substantial assets like aircraft and equipment.
Government Procurement Policies Include Offsets

Government procurement frequently involves offset agreements, particularly when acquiring major assets such as aircraft and complex equipment. This practice is considered a standard element in such deals, allowing the purchasing nation to derive additional benefits beyond the primary transaction. For example, when the government purchases an aeroplane, it often negotiates for an offset.
Distinguishing Between Offsets and Bribery

Dr Mahathir's stance suggests that if an advantage is gained as a consequence of a high-value purchase, it can be classified as an offset rather than bribery. He clarified that the critical differentiator is whether the funds are directed into an individual's personal account; if the money is for a specific, designated purpose, it is considered an offset. This contrasts sharply with bribery, which is defined by the illicit personal gain of an individual.
Airbus-AirAsia Allegations and Deferred Prosecution Agreement

Recent allegations have surfaced concerning Airbus SE and its dealings with AirAsia executives, detailed in a Deferred Prosecution Agreement entered into by Airbus and the UK's Serious Fraud Office (SFO) on January 31, 2020. The agreement implies that Airbus may have paid a bribe of US$50 million (RM200 million) to secure aircraft orders. A statement of facts associated with this agreement suggests that Airbus sponsored a sports team owned by AirAsia executives during negotiations, and that AirAsia subsequently ordered 406 aircraft between October 2005 and November 2014.
AirAsia Executives' Stance on SFO Investigation

In response to these allegations, Datuk Kamarudin Meranun and Tan Sri Tony Fernandes stated on February 4 that the SFO had not contacted AirAsia during its four-year investigation into the matter. They asserted that no inquiries were made for explanations or clarifications from AirAsia's side. Both executives had stepped down from their positions within the AirAsia Group the day prior to issuing this joint statement, citing their desire to cooperate with the probe.

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Are offsets in big deals truly not bribery?

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