State Fines Esterline $20 Million Over Hundreds of Defense Trade Violations
Esterline Technologies Corporation is ordered to pay $20 million in civil penalties as part of a State Department settlement over hundreds of alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAC), said State Department’s Directorate of Defense Trade Controls (DDTC) and other government agencies in recent days. Esterline engaged in unauthorized exports and imports of defense articles, violations of licenses and approvals, exports of defense articles that exceeded quantity and value authorized, inappropriate use of exemptions and flawed Automated Export System filing, State said (here).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Esterline, based in the Seattle area, is permitted to continue to export defense articles, however, according to State. “Esterline disclosed the alleged AECA and ITAR violations resolved under this settlement to the Department, acknowledged the serious nature of the alleged violations, cooperated with the Department, and implemented or has planned extensive remedial measures,” said the State Department in a press release (here). “For these reasons, the Department determined that an administrative debarment of Esterline was not appropriate at this time.” The State Department will suspend $10 million of the civil penalty on the condition that Esterline spent that amount on remedial compliance measures prior to the date of the settlement, DDTC said in the order (here).
ICE's Homeland Security Investigations (HSI) targeted Esterline subsidiaries Korry HMI Solutions and Kirkhill-TA, said ICE in a release (here). State Department “documents state that between 1997 and 2010, Korry transferred sensitive technical data to a foreign company without U.S. government authorization," said ICE. "The foreign company in Liechtenstein was contracted by Korry to manufacture night vision components used by the U.S. military. As a result of HSI's inquiry, the company conducted an internal compliance review and voluntarily disclosed the unauthorized exports to foreign suppliers. Department documents also noted HSI's investigation into another subsidiary, Kirkhill-TA in California, where HSI special agents alleged the company allowed foreign nationals unauthorized access to controlled technical data.”