Raytheon Will Pay $8 Million to Settle Export Control Case

Raytheon Company will pay $8 million to settle allegations brought by the State Department that the company violated of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).

The State Department’s Office of Defense Trade Controls Compliance in the Bureau of Political-Military Affairs determined that Raytheon’s numerous violations demonstrated a “recurring, corporate-wide weakness in maintaining effective ITAR controls.”

Raytheon disclosed to the Department hundreds of ITAR violations, largely consisting of failures to properly manage Department-authorized agreements and temporary import and export authorizations.

The violations included inaccurate tracking, valuation and documentation of temporary exports and imports of controlled hardware, manufacture of such hardware by Raytheon’s foreign partners in excess of the approved amounts, and failures to timely obtain and submit required documents.

Raytheon repeatedly discovered and disclosed such violations to the Department, in some cases finding that previously reported remedial measures failed to prevent or detect additional similar violations subsequently disclosed.

Under the terms of a four-year consent agreement with the Department, Raytheon will pay a civil penalty of $8 million.

The State Department agreed to suspend $4 million of this amount on the condition that the funds have or will be used for Department-approved pre- and post-consent agreement remedial compliance measures.

An external “special compliance official” will be engaged by Raytheon to oversee the consent agreement, which will also require the company to conduct two external audits of its compliance program during the agreement term as well as implement additional compliance measures.

The State Department said that Raytheon disclosed nearly all of the ITAR violations resolved in this settlement voluntarily to the Department, acknowledged their serious nature, cooperated with Department reviews, and implemented or has planned extensive remedial measures.

The Department said that it had determined that an administrative debarment of Raytheon is “not appropriate at this time.”

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