U.K.- headquartered BAE Systems plc yesterday said it had reached a civil settlement with the U.S. Department of State in connection with violations of the U.S. defense export control regulations.
Those violations, linked to aircraft sales, were subject to the company’s earlier settlement with the U.S. Justice Department, announced by the company in February 2010 (Defense Daily, March 2, 2010). The company was fined $400 million by the Justice Department–one of the largest fines the department has levied, it said at the time.
Separately, prosecution was dropped in a case about payments to a former marketing advisor in a radar sale to Tanzania, led by the U.K. Serious Fraud Office over accounting records as the company agreed to pay a fine.
Under the agreement with the State Department, BAE Systems plc will pay a fine of up to $79 million in respect to the alleged civil violations, the company said in a statement. The fine will be payable over a period of three years, subject to a reduction of up to $10 million due to the cost of enhanced export control compliance measures already implemented by the company and planned for implementation during the four-year period.
In the 2010 agreement BAE Systems plc agreed to retain an independent compliance monitor.
The DoJ noted last year that none of the criminal activity in the company’s plea involved the actions of its U.S.-based subsidiary, BAE Systems Inc.
In addition, a limited number of the company’s U.K.-originated export programs will be subjected to enhanced administrative review, which is not expected to adversely impact the company’s current or future export programs, the statement said. The company will also make additional commitments concerning its ongoing compliance.
BAE Systems plc Chairman Dick Olver said, “Last year the Company reached a settlement with the U.S. Department of Justice concerning historical violations of U.S. defense export control regulations and this settlement with the State Department arises in connection with its parallel civil jurisdiction over such matters. The Company is grateful to the State Department for the time and effort its staff have invested over the last year in reviewing the company’s present compliance systems and processes, which enabled them to conclude that the company has initiated appropriate steps to address the cause of the past civil violations and to mitigate any law enforcement concerns.”
Olver said the company looks forward to working with the State Department to ensure that it continues to progress towards achieving its goal as being as widely recognized for responsible conduct as it is for high quality products and advanced technologies.