BAE Systems to pay $36m penalty over more than 100 US arms export violations
UK defence firm BAE Systems has agreed to pay a $36m civil penalty to the US State Department to settle 104 violations of US arms export control rules, including unauthorised technical data transfers to China.
The US Department of State announced on Thursday an administrative settlement with the US arm of British defence company BAE Systems, resolving 104 violations of the Arms Export Control Act and the International Traffic in Arms Regulations. The company will pay a $36m (about £26.7m) civil penalty.
The violations included unauthorised exports of technical data to several countries, including China, along with breaches of directorate of defense trade controls authorisations involving multiple nations. Because BAE voluntarily disclosed all but one of the alleged violations, it avoided a steeper penalty. The State Department also agreed to suspend half of the fine — $18m — on condition that the sum be used to strengthen BAE's internal compliance programme.
Specific incidents
One violation involved technical data on printed wiring boards used in GPS systems being sent to a manufacturer in China in December 2023. The State Department said BAE's supply chain team had not fully understood export control regulations, and that its secure file transfer networks failed to flag export control warnings before the data was sent.
Other breaches included sending data on printed wiring boards for military GPS use to Canada in September 2021 after a licence agreement had expired, sending technical specifications for an explosive mixture to the UK, and transmitting technical data related to a US Navy guided-missile destroyer to Germany. A BAE subcontractor also provided defence services without authorisation more than 17 times across Italy, France and Indonesia, and the company accidentally exported a control system for a military gas-turbine engine to Switzerland without authorisation.
BAE Systems said it remained committed to full compliance with applicable export control laws and had cooperated thoroughly with the State Department's review, adding that it had been working for several years to improve its compliance programme and would continue to do so.
