A U.S. company will pay a $20 million civil penalty as part of a settlement resolving its alleged violations of the Arms Export Control Act and the International Traffic in Arms Regulations. The State Department notes that this settlement highlights the importance of obtaining appropriate authorization before exporting ITAR-controlled technical data.

According to a department press release, an extensive compliance review by State’s Office of Defense Trade Controls Compliance found alleged ITAR violations from 2012 to 2018 involving unauthorized exports of technical data to Germany, China, and foreign-person employees; unauthorized reexports of technical data to Taiwan; and a failure to maintain ITAR records.

The press release states that under the terms of a 36-month consent agreement State will suspend half the $20 million penalty provided that the funds are used for department-approved remedial measures to strengthen the company’s compliance program. The company will also engage an external special compliance officer for at least the first year of the agreement, conduct two external audits of its ITAR compliance program, and implement additional compliance measures.

State adds that it has determined not to administratively debar the company at this time because of the corrective actions it has already undertaken, including expanding the scope of its internal investigation to cover exports of technical data, implementing remedial compliance measures, and selling its business unit primarily responsible for ITAR activity.

For more information on export requirements and ensuring your company is in compliance, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.

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