The US Department of Justice has said it will decide by July 7 whether to prosecute Boeing (BOE, Washington National) for having violated a 2021 Deferred Prosecution Agreement (DPA) over the fatal crashes of two B737 MAX aircraft in 2018 and 2019 that killed 346 people.

The DOJ said the manufacturer had failed to establish and maintain an adequate compliance and ethics programme as required by the agreement. Boeing has been granted a 30-day window (by June 13) to respond to these allegations.

Boeing disputed the allegations: "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,” it said in a statement. “As we do so, we will engage with the Department with the utmost transparency, as we have throughout the entire term of the agreement, including in response to their questions following the Alaska Airlines 1282 accident."

Boeing has come under renewed scrutiny from the US Federal Aviation Administration (FAA) after a door plug blew out on the Alaska Airlines B737 MAX flight in January. The manufacturer has already paid out USD160 million in compensation to the airline.

In a letter to Judge Reed O’Connor of the Texas Northern District Court, Glenn Leon, head of the DOJ's fraud and criminal divisions, and the US attorney for the Northern District of Texas, Leigha Simonton, said the Justice Department had determined that Boeing breached its obligations under the DPA, "by failing to design, implement, and enforce a compliance and ethics programme to prevent and detect violations of the US fraud laws throughout its operations".

"For failing to fulfil completely the terms of and obligations under the DPA, Boeing is subject to prosecution by the United States for any federal criminal violation of which the United States has knowledge," the letter added.

Pending Boeing's response, the DOJ will confer with family members of the victims of the two B737-8 crashes - Lion Air Flight 610 and Ethiopian Airlines Flight 302 - and their legal counsels on May 31 about the next steps. If found guilty, Boeing could face additional financial penalties and stricter oversight, which could deepen the ongoing corporate crisis and reputational damage caused by the recent incidents.

Under the DPA, Boeing agreed to pay more than USD2.5 billion, including a criminal penalty of USD243.6 million, USD1.77 billion to Boeing's B737 MAX airline customers, and a USD500 million fund to compensate relatives. The DPA deferred a criminal charge against Boeing of conspiracy to defraud the United States for three years, on condition that the company complied with the agreement's terms. This included not making any contradictory public statements, fully cooperating, and implementing an enhanced compliance programme.

The case against Boeing in the Texas Northern District Court was filed on January 26, 2023, by the relatives of those who died in the two crashes and who have been declared crime victims under the US Crime Victims' Rights Act.