The U.S. Department of State announced on Friday (August 30) that aerospace and defense company Raytheon Technologies Corporation (RTX) will be fined $200 million for violating export laws by carrying controlled defense technology documents to sanctioned countries including China, Russia, and Iran.
According to the Department of State, the fine is a result of 750 violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) by the company. Half of the fine will be allowed to be used by RTX for “strengthening remedial compliance measures for the RTX compliance plan”.
In a statement, the Department of State mentioned that “RTX voluntarily disclosed all suspected violations. RTX also cooperated with the department’s review of the matter and implemented multiple improvements to its compliance plan since the relevant actions occurred”.
During a financial conference on July 25, RTX informed investors that the company had set aside approximately $1 billion to resolve three legal matters discovered during the integration of Rockwell Collins and Raytheon companies.
The notice from the U.S. Department of State on Friday was the first of the three legal matters.
According to the Department of State’s accusation document, from August 2017 to September 2023, a total of 750 violations occurred, including erroneously providing intellectual property and technology to China.
Several violations involved employees carrying “defense documents” in their work laptops when traveling to sanctioned countries, storing a significant amount of sensitive U.S. military-related information.
For instance, an incident in May and June 2021 involved an employee traveling to St. Petersburg, Russia, who carried a laptop issued by RTX containing ITAR-controlled technical data related to at least five military aircraft.
In another incident, an employee traveled to Iran and attempted to log into his computer there. Although RTX’s security department detected this action and locked the laptop, the computer’s hard drive contained technical data on the B-2 Spirit bomber and F-22 Raptor fighter jet.
One case involved providing information to Chinese citizens regarding “F-22 Raptor fighter jet aluminum display screen housing components”, which turned out to be more sensitive than initially believed by RTX employees.
The Department of State pointed out that “the U.S. government reviewed the file copies mentioned in this disclosure and determined that the unauthorized export of technical data damaged U.S. national security and had implications for Department of Defense records”.
Under the 36-month agreement, RTX will pay a $200 million civil penalty, but the government agreed to reduce the fine by half if RTX invests $100 million in remedial compliance measures.
As part of the agreement, RTX must hire an external compliance officer to oversee the agreement for at least 24 months. This will also require at least one external audit of the compliance plan and implementation of additional compliance measures.
“This settlement case demonstrates the role the Department of State plays in controlling the export of defense articles, promoting U.S. national security, and diplomatic policy,” stated the Department of State.