Boeing to Pay $51 Million for Export Control Violations

5 March 2024

On 29 February, Boeing announced that it has reached a settlement with the US Department of State to resolve 199 breaches of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR), following an extensive compliance review by the Office of Defence Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs. 

The aircraft manufacturer will pay a civil penalty of $51 million, but the Department of State agreed that $24 million of it can be suspended on the condition that the funds be used for remedial measures to strengthen Boeing’s compliance program, under a consent agreement.

For a minimum of two years, Boeing must engage an external special compliance officer to oversee the consent agreement, and two external audits will be required.

All 199 of the violations were voluntarily disclosed by Boeing, and the majority took place before 2020.  They all relate to unapproved exports of technical data, rather than equipment, and include unauthorised downloads made by Boeing employees in at their offices in China, and also downloads at offices belonging to Boeing and its partners in 18 other countries, including the UK.  The downloads involved a range of sensitive technologies, including some relating to the F-15, F-18 and F-22 fighter jets.

The state department commented that the settlement “highlights the importance of exporting defence articles only pursuant to appropriate authorization”.  A statement from Boeing said it is “committed to our trade controls obligations, and we look forward to working with the state department under the agreement”.

There has been no allegation that the downloads involved classified material.

The case is an important reminder that US export controls cover non-tangible exports such as data, and that tough US export controls apply outside the US, even in cases where data is downloaded by a division or partner of the company. 

If your company exports US-produced components or technology, or if you are concerned about the issues raised by this incident, or have questions relating to UK export licensing, contact our Customs Manager for assistance.

Chamber International’s half-day online workshop An Introduction to Export Licensing takes place on 13 March at 1.30pm UK time.

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