Boeing Co. BA agreed to pay a $51 million fine to settle a U.S. administrative charge related to unauthorized exports of technical data to countries including China and Russia.
What happened: The agreement, announced Thursday by the US State Department, resolves nearly 200 violations of the Arms Export Control Act and laws regulating international trafficking in arms, the Financial Times reported.
According to the State Department, breaches that occurred between 2013 and 2017 “caused harm to the national security of the United States.” Exports to Russia, during a period of restrictive defense export measures, “created the potential for harm to the national security of the United States.”
Boeing disclosed these violations between 2017 and 2022, leading to an “extensive compliance review.” The company’s international employees and contractors were found to have violated the law.
Most of the breaches occurred before President Joe Biden implemented export controls aimed at preventing Chinese access to U.S. technology. Furthermore, they occurred before Boeing revised its trade controls compliance program in 2020.
The settlement covers a number of incidents, including unauthorized exports and re-transfers of technical data to foreign employees and contractors, unauthorized exports of defense articles, and violations of license terms.
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“We are committed to our trade controls obligations and look forward to working with the Department of State under the agreement announced today,” Boeing said.
The agreement also includes two-year oversight by a special compliance officer. The government will suspend $24 million in civil penalties if Boeing uses the funds to strengthen its compliance program.
Because matter: This deal is the latest in a series of setbacks for Boeing. The company came under regulatory scrutiny following an incident in January when a door burst in mid-air. The FAA has ordered the grounding of some Boeing 737 Max 9 jets after a door plug came off the side of an Alaska Air Group, Inc. plane.
Previously in September, Boeing agreed to pay $8.1 million to resolve allegations that it violated the False Claims Act by submitting false claims and making misrepresentations in connection with contracts with the U.S. Navy to produce the V -22 Ospreys.
In February, the FAA issued a stern ultimatum to Boeing to correct its “systemic quality control problems” within 90 days or face serious repercussions after a door panel came off during a flight of a new Alaska Airlines 737 MAX 9 , forcing an emergency landing.
Additionally, in February, Boeing announced that it had identified new quality defects in its 737 MAX planes, which could lead to delays in the delivery of the planes.
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