BAE Systems to pay $36m penalty for US arms export rule violations

BAE Systems' US arm reached an administrative settlement with the State Department. The company's voluntary disclosure of nearly all alleged violations was a key factor in avoiding a higher penalty. Furthermore, the State Department agreed to suspend half of the penalty, $18 million, on the condition that BAE Systems uses these funds to strengthen its compliance program.

The company stated its commitment to complying with export control laws and highlighted its diligent work in implementing improvements to its compliance program. BAE Systems emphasized its responsibility to protect critical information and support customer security.

The State Department underscored the settlement's importance in reinforcing the necessity of obtaining proper authorization for exporting defense articles. Specific violations cited included sending technical data for GPS systems to a manufacturer in China in December 2023, with the company acknowledging its supply chain team's misunderstanding of export control regulations. Other instances involved sending data related to military GPS to Canada after a license expired, an "explosive mixture" specification to the UK, and technical data for a US Navy guided-missile destroyer to Germany.

Additionally, a BAE subcontractor furnished defense services without authorization on over 17 occasions in Italy, France, and Indonesia. The company also inadvertently exported a control system for a military gas-turbine engine to Switzerland without authorization.