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

By David Shepardson

WASHINGTON (Reuters) -Boeing said on Thursday it had reached a $51 million settlement with the U.S. State Department for numerous export violations including Chinese employees in China improperly downloading documents related to U.S. Defense Department programs.

The State Department said from 2013 through 2017 three Chinese employees at Boeing facilities in China downloaded technical data involving programs including the F-18, F-15 and F-22 fighter jets, the E-3 airborne warning and control system, the AH-64 Apache attack helicopter and the AGM84E cruise missile.

Boeing said there were additional unauthorized downloads of technical data at Boeing and partner facilities in 18 countries, including Australia, Canada, France, Germany, Hong Kong, India, Italy, Japan, Kenya, Morocco, Russia, Singapore, South Korea, Spain, Thailand, Taiwan, Ukraine and the United Kingdom from 2013 to 2018.

The administrative settlement covers unauthorized exports of technical data and resolves 199 violations of the Arms Export Control Act and International Traffic in Arms Regulations, the State Department said.

The State Department said the settlement “highlights the importance of exporting defense articles only pursuant to appropriate authorization” and followed “an extensive compliance review” by the government.

Boeing said it was “committed to our trade controls obligations, and we look forward to working with the State Department under the agreement.” The company added it was committed to continuous improvement of its trade controls compliance program.

Boeing also engaged in some unauthorized exports of defense material and technical data related to defense programs to a number of countries including Israel, Turkey and Lebanon, the State Department said.

Boeing voluntarily disclosed the violations, which mostly occurred before 2020, and the government documents did not allege disclosure of classified material. The department said Boeing cooperated and “has incorporated numerous improvements to its compliance program since the conduct at issue.”

The settlement includes a three-year consent agreement and $51 million civil penalty, of which $24 million will be suspended by the State Department so Boeing can use the funds for remedial compliance measures to strengthen its compliance program.

For at least two years, Boeing will engage an external special compliance officer to oversee the agreement, which will also require two external audits, the State Department added.

(Reporting by David Shepardson, Eric Beech and Kanishka Singh; Editing by Jamie Freed)