The State Department has fined Raytheon [RTN] $8 million for “hundreds” of violations of export control laws over the last decade and said the defense firm has shown a “corporate-wide weakness” in maintaining effective procedures for complying with the regulations.
Under a four-year agreement reached by the State Department and Raytheon, the company will have to pay only half the fine if it spends the remainder on shoring up pre-identified internal processes to ensure it is meeting requirements under the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), the State Department said in disclosing the deal late Tuesday afternoon.
Because Raytheon voluntarily came forward and reported the violations over the years, cooperated with the reviews, and is working to improve the process, it was “not appropriate at this time” to suspend foreign sales, the State Department said.
The violations included inaccurate tracking, valuation and documentation of temporary exports and imports of controlled hardware, and the manufacturing of the hardware by Raytheon’s foreign partners in quantities beyond what had been approved, the State Department said. Raytheon also failed to timely obtain and submit mandated documents, the department said.
“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,” the department said.
Raytheon said in a statement it is working closely with the State Department to fully comply with defense trade restrictions.
“We have voluntarily taken a number of actions designed to eliminate administrative errors, including investments in automated technology systems, the expansion of employee training programs, and changes to our export operations and compliance organization,” the Waltham, Mass.-based company said.
The agreement also requires Raytheon to conduct two external audits of its export procedures during the next four years.