Payload: Risk management lessons for aircraft operators after the Ghosn escape


Paul Jebely arrives in a box for this CJI London 2020 conference presentation.

Paul Jebely arrived in a box for his CJI London 2020 conference presentation. Find out why in his article.


“How did I escape? With difficulty. How did I plan this moment? With pleasure.”

The Count of Monte Cristo

The ‘Mission Impossible’-esque Carlos Ghosn escape from Japan may be an extreme case study, but it is nonetheless a cautionary tale for any private jet operator, writes Paul Jebely. As captivating as they may be, various versions of the facts are well-publicised about the Ghosn flight from Japan and are not the focus of this article.

For the purposes of this article, I assume MNG Jet’s public statements to date concerning the rogue nature of the operation and employees involved to be true. MNG Jet claims to be a victim, and maintains that it had no knowledge of the “illegal” use of its aircraft. Still, the company could face millions of dollars of potential liability as well as reputational damage.  This Turkish undelight – perhaps along with a cup of Turkish coffee, but I digress – serves as a wake-up call for operators for the need to have a robust risk and compliance framework in place.

Private jet operators face the ongoing risk of exposure to an array of scoundrels, including money launderers, corrupt officials, organised criminals, terrorists, sanctioned parties and even human traffickers. Indeed, is the inherently private, flexible and tailored nature of service that makes private jets at once attractive and susceptible to illicit and criminal enterprise. Compounding such risk is the premise that multiple countries can assert legal jurisdiction over these companies, for example, between physical location, nationality of individuals and type of currency changing hands.

Moreover, when faced with such risks, any well-managed private jet operator should, at a minimum, adopt compliance best practices that are used in other industries to manage similar risks. The key is to develop inoculation strategies and cultivate “backward defensibility” – a phrase which can prove to be a saving grace – when, not if, a private jet operator encounters a bad actor and/or careless employee(s). To that end, I recommend that private jet operators take the following six steps if they have not already:

First, conduct a risk assessment exercise to assess if your aircraft under management might be misused to violate the law. You can do this internally, or via a credible third party like outside legal counsel.

Second, issue a statement that legal compliance is company policy. Owners or senior officials can issue policy statements to all employees stating the complying with the law is, in short, more important than business and that the company intends to comply with applicable laws and not help others to violate them. Mention the important ones identified in your risk assessment – for example, anti-money laundering (AML), anti-corruption, counter-terrorism, sanctions, export controls and tax evasion.

Third, identify a compliance officer. Task a senior employee with responsibility for monitoring adherence to the compliance policy statement. Empower them with a direct reporting line to the senior management and owners.

Fourth, implement written compliance plans and procedures. Take the time to put in writing how the company expects to do business, how it expects employees to act and how to keep proper records.

Fifth, establish an AML programme. This can help organise deliberate steps to avoid misuse of the aircraft under management. Conduct customer and vendor due diligence, vet employees, and screen customers and commercial partners against Interpol, sanctions and other denied party lists. Know your counter party and assess their sources of funds. If transacting in US dollars, be certain not to provide services in countries or with parties that violates US sanctions laws. (US dollar transactions clear the US banking system and are subject to US sanctions jurisdiction).

Sixth, conduct training for your employees. After investing in a compliance programme, make sure personnel understand the company’s rules and why it is important to follow them. Explain the legal risks to employees if misconduct is supported or ignored – for example, several MNG employees alleged to be involved in the Ghosn affair are facing individual criminal charges. Identify red flags and encourage reporting by employees to supervisors. Talking music cases with air holes are a good example of a red flag. Keep records of the training for each employee.

The great escape artist Harry Houdini once famously remarked that “…what the eyes see and ears hear, the mind believes”.  He could have just as well been remarking on backward defensibility, where perception is tantamount to reality. In that light, a well-documented compliance programme not only helps private jet operators avoid actual legal violations and manage risk exposure generally, but also helps evidence that the company intended to do the right thing.

If the need arises, senior management should be able to present specific documents to law enforcement, courts, lenders, commercial partners or even media to buttress an argument that the brush with unlawful activity was against company policy and unauthorised.


About the author

Paul Jebely is the managing partner of the Hong Kong office of Pillsbury Winthrop and co-head of the firm’s asset finance practice globally. This article was first published in February 2020.