Raytheon fined $200 million for unauthorised export of defence technology
- In Reports
- 04:26 PM, Aug 31, 2024
- Myind Staff
Raytheon Technologies (RTX) will pay a $200 million fine for unauthorised export of defence technology to multiple countries, including China, Russia, Iran, and Lebanon, according to an announcement by the U.S. State Department. This settlement covers 750 violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The company will be allowed to allocate half of the fine, $100 million, toward “remedial compliance measures to strengthen RTX’s compliance program,” as per the State Department's statement.
The settlement specifically addresses Raytheon’s “unauthorised exports of defence articles” that stemmed from its failure to establish proper jurisdiction and classification. It also covers unauthorised exports of both classified and unclassified defence articles, including situations where employees carried these items by hand to prohibited destinations. According to the State Department's charging letter, the violations occurred between August 2017 and September 2023. These unauthorised exports involved sensitive technical data related to Pentagon aircraft and weapons programs, such as the stealthy F-22 fighter jet and the E-3 radar plane.
The State Department's statement highlighted that these actions compromised U.S. national security and emphasised the importance of adherence to ITAR and AECA regulations to protect sensitive defence technology. In response to these violations, the State Department has mandated that Raytheon implement enhanced compliance measures. These will include more stringent internal oversight, employee training, and auditing procedures to prevent future violations.
Last month, Raytheon informed its investors that it had set aside over $1 billion to resolve multiple government investigations, including this one by the State Department regarding export-control violations. The company mentioned this during its second-quarter earnings call on July 25, 2024, indicating that it was aware of the potential financial impact and had taken steps to prepare for it.
In a statement issued today, Raytheon said, “Today’s action is in line with the company’s expectations, which we disclosed during the company’s second quarter earnings report on July 25, 2024.” Despite this acknowledgment, company officials declined to provide further comments or details about the specific violations or the terms of the settlement.
Image source: Outlook India
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