Boeing Reaches $51 Million Settlement with U.S. State Department Over Export Violations

After a series of export violations, Boeing has reached a settlement with the U.S. State Department, agreeing to pay a total of $51 million. The violations included unauthorized downloads of technical data by Chinese employees in China. This settlement comes after a thorough review by the government and highlights the importance of adhering to proper authorization for the export of defense articles.

Chinese Employees Involved in Unauthorized Downloads

Between 2013 and 2017, three Chinese employees at Boeing facilities in China were found to have improperly downloaded technical data pertaining to various U.S. Defense Department programs. These programs included the F-18, F-15, and F-22 fighter jets, the E-3 airborne warning and control system, the AH-64 Apache attack helicopter, and the AGM84E cruise missile.

Widespread Scope of Unauthorized Downloads

Furthermore, it was revealed that there were additional unauthorized downloads of technical data at Boeing and partner facilities in as many as 18 countries from 2013 to 2018. These countries include Australia, Canada, France, Germany, Hong Kong, India, Italy, Japan, Kenya, Morocco, Russia, Singapore, South Korea, Spain, Thailand, Taiwan, Ukraine, and the United Kingdom.

Settlement Details and Compliance Measures

The administrative settlement covers a total of 199 violations of the Arms Export Control Act and International Traffic in Arms Regulations. As part of the settlement, Boeing has agreed to a $51 million civil penalty, with $24 million of the penalty to be suspended by the State Department. This suspended amount will be utilized by Boeing for remedial compliance measures to strengthen its trade controls compliance program.

Additionally, the settlement includes a three-year consent agreement, during which Boeing will engage an external special compliance officer to oversee the compliance program. The agreement also mandates two external audits over the same period to ensure adherence to the terms.

Commitment to Compliance and Cooperation

Boeing has reiterated its commitment to trade control obligations and expressed its dedication to continuous improvement in its trade controls compliance program. Moreover, the company voluntarily disclosed the violations, most of which occurred prior to 2020, and cooperated fully during the investigation.