BAE Systems, Europe's biggest military contractor, said on Friday it had asked a former top English law official to lead a review of its business ethics but he would not be investigating controversial past deals with Saudi Arabia.
BAE denies making wrongful payments to a Saudi prince in connection with Britain's biggest arms export deal, dating back to the 1980s and worth an estimated 43 billion pounds ($85 billion).
"The board of BAE Systems has today announced the creation of an external, expert committee to review and evaluate the company's policies and processes, and their application, relating to ethics and business conduct," the company said in a statement.
Lord Harry Woolf will chair the review, expected to last six to nine months. He told a news conference it would focus on BAE's current and future policies, rather than conduct an "inquest" or "post-mortem" of past dealings.
BAE's chairman, Dick Olver, said he had first approached Woolf on May 10, well before British media reports accused the company of paying 1 billion pounds over a decade to Prince Bandar bin Sultan in connection with the deal, known as al-Yamamah.
Olver said al-Yamamah would not be part of the ethics review. "It's been exhaustively investigated and there's no benefit, nor indeed is there any possibility of reopening what's already been done by the appropriate authorities," he said. In response to questions he emphatically denied the review was a "figleaf".
Woolf, the former Lord Chief Justice, added: "If I thought I was just being used as some form of window dressing I would not have taken on the assignment." He said he would be vigorous in his inquiry, but was not yet able to say whether BAE's new agreement to supply Saudi Arabia with 72 Eurofighter Typhoon jets would fall within his terms of reference.
Olver said Woolf and other members of the four-person panel would get full access to documents and personnel, including agents and external advisers. "Nothing will be off-limits that's inside the terms of reference ... We will facilitate anything that Lord Woolf wants."
BAE said it had not received and was not expecting to receive any contact from the US Department of Justice over any proposed US investigation into funds it had paid into US bank accounts to which Prince Bandar was a signatory. British media reports have said such an investigation is likely.
Prince Bandar, former Saudi ambassador to the United States and now Secretary-General of the Saudi National Security Council, has strongly denied the sums involved represented secret commissions to him, describing this as "a zenith in fabrication".