Background

The Department of State reports that it has concluded an administrative settlement with a U.S. company to resolve three violations of the Arms Export Control Act and the International Traffic in Arms Regulations.

According to State, this settlement addresses the company’s misrepresentation of material facts on export license applications and its engagement in unauthorized brokering activities involving an ITAR-controlled substance from China, a proscribed country for exports and temporary imports of defense articles and services at the time of the violations.

As part of this settlement the company will pay an $850,000 civil penalty and implement the following remedial measures.

- appoint a qualified individual to serve as a special compliance officer who will monitor the company’s AECA and ITAR compliance program, with specific attention to the areas associated with the violations; oversee efforts such as corporate oversight of ITAR compliance; and report on issues such as the company’s ITAR compliance program enhancements

- develop and utilize strengthened corporate compliance procedures

- enhance its AECA and ITAR compliance program with specific attention to identified problem areas

- implement a comprehensive automated export compliance system throughout the company’s divisions, subsidiaries, and business units engaged in AECA and ITAR-regulated activities

- review, verify, and complete the export control jurisdiction of all hardware and/or software of the company’s AECA and ITAR-regulated operating divisions, subsidiaries, and business units as well as any defense services or technical data directly related to such hardware

- have at least one audit of its implementation of this consent agreement performed by an outside consultant with expertise in AECA/ITAR matters

For more information on export rules and regulations sand ensuring your company is in compliance, please contact attorney Kristine Pirnia via email.

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