Boeing agrees to $51 million settlement over US export violations, including breaches in China

Boeing has reached a $51 million settlement with the US State Department for multiple export violations, a resolution that includes improper actions by Chinese employees in China.

The State Department revealed that three Chinese workers at Boeing facilities in China downloaded technical data pertaining to multiple US Defence Department programmes between 2013 and 2017. These programmes included fighter jets such as the F-18, F-15, and F-22, as well as the AH-64 Apache attack helicopter, the AGM84E cruise missile, and the E-3 airborne warning system.

The settlement also addresses unauthorised downloads of technical data at Boeing and partner facilities in 18 countries, spanning regions such as Australia, Canada, Germany, Russia, and the United Kingdom.

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These unauthorised actions occurred between 2013 and 2018, with the administrative settlement covering 199 violations of the Arms Export Control Act and International Traffic in Arms Regulations.

The State Department highlighted that exporting defence articles with proper authorisation was necessary and that the settlement should follow an extensive compliance review by the government.

Boeing said that it would remain dedicated to trade controls obligations and said that it was ready to collaborate with the State Department under the agreement.

The State Department, acknowledging Boeing's cooperation, revealed that the violations were voluntarily disclosed by the aerospace giant, mostly occurring before 2020.

Importantly, the government documents did not allege the disclosure of classified material.

The settlement entails a three-year consent agreement and a $51 million civil penalty.

Of this penalty, $24 million will be suspended by the State Department, allowing Boeing to allocate these funds for remedial compliance measures aimed at reinforcing its compliance program.

As part of the agreement, Boeing will engage an external special compliance officer for at least two years, overseeing the implementation of compliance measures.

Additionally, the settlement requires two external audits to ensure ongoing adherence to regulations.

The violations also encompassed unauthorised exports of defence material and technical data related to defence programs to countries such as Israel, Turkey, and Lebanon.

(With inputs from Reuters)