April 20, 2024

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U.S. Department of State Concludes $51 Million Settlement Resolving Export Violations by The Boeing Company

The U.S. Department of State has concluded an administrative settlement with The Boeing Company (Boeing) to resolve 199 violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 CFR parts 120-130. The Department of State and Boeing reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The administrative settlement between the Department of State and Boeing, concluded pursuant to ITAR § 128.11, addresses Boeing’s unauthorized exports and retransfers of technical data to foreign-person employees and contractors; unauthorized exports of defense articles, including unauthorized exports of technical data to the People’s Republic of China, a proscribed destination under ITAR § 126.1; and violations of license terms, conditions, and provisos of Directorate of Defense Trade Controls authorizations.

All of the alleged violations were voluntarily disclosed, and a considerable majority predate 2020. Boeing cooperated with the Department’s review of this matter and has incorporated numerous improvements to its compliance program since the conduct at issue.

Under the terms of the 36-month Consent Agreement, Boeing will pay a civil penalty of $51 million. The Department has agreed to suspend $24 million of this amount on the condition that the funds will be used for the Department-approved Consent Agreement remedial compliance measures to strengthen Boeing’s compliance program. In addition, for an initial period of at least 24 months, Boeing will engage an external Special Compliance Officer to oversee the Consent Agreement, which will also require two external audits of its ITAR compliance program and implement additional compliance measures.

The settlement demonstrates the Department’s role in furthering the national security and foreign policy of the United States by controlling the export of defense articles. The settlement also highlights the importance of exporting defense articles only pursuant to appropriate authorization from the Department.

The Consent Agreement and related documents will be available for public inspection in the Public Reading Room of the Department of State and on the Penalties and Oversights Agreements section of the Directorate of Defense Trade Controls’ website.

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