The State Department announced recently that a U.S. company will pay a $3 million civil penalty to settle 24 violations of the Arms Export Control Act and the International Traffic in Arms Regulations. Specifically, the company made unauthorized exports to foreign person employees from Bhutan, Burundi, El Salvador, Honduras, Mexico, and Peru of tools (specifically, wax pattern and core dies) and wax patterns consumed in the subsequent production of casting blades used in gas turbine engines.
According to State, the company voluntarily disclosed all of the violations, cooperated with the department’s review, and has incorporated improvements to its compliance program. Further improvements have been pledged using $1 million of the penalty State has agreed to suspend. These include strengthened corporate compliance procedures focused principally on the company’s business operations, enhanced AECA and ITAR compliance programs, implementation of a comprehensive automated export compliance system, and a review of the export control jurisdiction of certain items.
In addition, for a minimum of two years the company will appoint an individual to serve as an internal special compliance officer to oversee the company’s consent agreement with State, which will also require an external audit of the company’s ITAR compliance program and implementation of additional compliance measures.
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