Boeing to pay $51mn US penalty over arms export violations

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Boeing is paying $51mn to settle a US administrative charge over unauthorised exports, to countries including China, of technical data related to a range of US military weaponry including fighter jets and missile systems.

The deal with the US aerospace manufacturer will resolve nearly 200 violations of the Arms Export Control Act and the International Traffic in Arms Regulations laws, the US state department said on Thursday. The company and government reached the agreement after an “extensive compliance review” prompted by Boeing’s disclosures between 2017 and 2022 that some of its international employees and contractors had been violating the law.

The US government found the exports to China between 2013 and 2017 “caused harm to US national security”, according to the proposed charging letter from the state department. Exports to Russia in the last decade, while it was subject to restrictive measures on defence exports, “created the potential for harm to US national security”.

Most of the violations came before President Joe Biden introduced export controls meant to thwart Chinese attempts to access US technology. Most also came before Boeing changed its trade controls compliance programme in 2020.

“We are committed to our trade controls obligations, and we look forward to working with the state department under the agreement announced today,” Boeing said.

The settlement between the company and the state department covers a range of incidents, including unauthorised exports and retransfers of technical data to foreign employees and contractors, unauthorised exports of defence articles and violating licence terms.

Boeing employees in China downloaded technical data from the company’s library 25 times during a four-year span, according to the proposed charging letter. The downloads included data on the F-18, F-15 and F-22 fighter jets; the AH-64 Apache helicopter; and the AGM-84E Standoff Land Attack Missile and AGM-131 Short Range Attack Missile II.

Separately, “an indeterminate number” of international employees and contractors at Boeing sites across 18 countries, including Russia, downloaded technical data 80 times over five years, according to the proposed charging document.

The three-year settlement between Boeing and the government calls for oversight by a special compliance officer for two years. The government said it will suspend $24mn of the civil penalty if Boeing uses the funds to strengthen its compliance programme.

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