Boeing faces potential prosecution over breach of 2021 737 MAX agreement

The US Department of Justice (DOJ) announced on Tuesday that Boeing has violated its 2021 deferred prosecution agreement related to the fatal crashes of its 737 MAX aircraft in 2018 and 2019, which claimed 346 lives.

This breach exposes Boeing to potential criminal prosecution and further intensifies its ongoing corporate crisis.

In a court filing in Texas, the DOJ stated that Boeing failed to "design, implement, and enforce a compliance and ethics program to prevent and detect violations of US fraud laws throughout its operations."

This determination follows a January 5 incident where a panel blew off a new Boeing 737 MAX 9 jet during an Alaska Airlines flight, raising fresh concerns about the company's safety and quality protocols.

The DOJ's assessment means Boeing could face significant financial penalties and heightened oversight.

The department has directed Boeing to respond by June 13, with a decision on prosecution expected by July 7.

The outcome could include extending the original agreement, imposing additional fines, or requiring Boeing to plead guilty, which could impact its ability to secure government contracts.

Boeing acknowledged receiving the DOJ's notification and asserted its belief that it has complied with the terms of the agreement.

"We believe that we have honoured the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue," Boeing stated.

The company pledged to engage with the DOJ transparently, particularly regarding the Alaska Airlines incident.

The January blowout incident occurred just two days before the expiration of the 2021 deferred prosecution agreement, which had required Boeing to pay $2.5 billion and implement extensive compliance measures.

This agreement followed a criminal investigation into Boeing's actions surrounding the two deadly crashes.

The Justice Department's determination has sparked reactions from various stakeholders.

During a US Senate hearing in April, a Boeing engineer alleged that the company took dangerous manufacturing shortcuts and ignored safety concerns, accusations that Boeing disputes.

Family members of crash victims and their lawyers have long argued that Boeing failed to meet the compliance overhaul stipulated in the 2021 deal.

Paul Cassell, a lawyer representing victims' families, praised the DOJ's decision as a critical step toward accountability.

Erin Applebaum, another lawyer for victims' families, expressed satisfaction with the DOJ's actions and called for a subsequent prosecution.

The DOJ plans to meet with victims' families and their lawyers on May 31 to discuss the decision.

Under the 2021 agreement, US officials have six months from the deal's January 7 expiration to decide on prosecuting Boeing.

Possible outcomes include extending the settlement, imposing additional oversight, or pursuing criminal charges.

The DOJ's stance on corporate wrongdoing has become stricter under President Joe Biden, exemplified by the hefty fines and guilty plea from Sweden's Ericsson for violating a similar agreement in 2019.

(With inputs from Reuters)