The United States Department of State and The Boeing Company have agreed on a $51 million settlement to resolve export violations committed by the aviation giant. These violations, which involved technical data downloaded by the company in China and Russia, posed national security risks for the United States.
Following an extensive compliance review, the Department of State identified 199 violations of the Arms Export Control Act (AECA) by The Boeing Company. The review revealed that Boeing conducted unauthorized exports and retransfers containing technical data to foreign contractors and employees. Furthermore, it exported defense articles without obtaining the necessary approval. This data was transferred primarily to the People's Republic of China, with most incidents occurring before 2020. The consent agreement between the Department of State and Boeing spans 36 months and imposes a total civil penalty of $51 million. However, $24 million will be suspended on condition that these funds are used for compliance measures approved under the Consent Agreement.
According to a CNN report, this compliance review found that exports to China between 2013 and 2017 had compromised US national security. It recorded 25 instances where Boeing employees in China downloaded data. The settlement covers a broad range of incidents, including license term violations. A three-year agreement has been established to ensure special compliance oversight with a dedicated compliance officer for two years.
In response to these developments, Boeing stated: "We are committed to our trade controls obligations, and we look forward to working with the State Department under the agreement announced today. We are committed to continuous improvement of that program, and the compliance undertakings reflected in this agreement will help us advance that objective."
As reported by CNN, this comes at a time when Boeing is already under scrutiny following an incident in January where a door blew out mid-flight. Moreover, the Justice Department is investigating whether this incident breaches a settlement reached in 2021 after two fatal crashes involving its 737 Max aircraft claimed all 346 lives on board, leading to the grounding of the plane for a year and eight months.
