British defence contractor BAE Systems has agreed to pay a $36 million (£26.7 million) civil penalty to settle charges involving 104 violations of US arms export regulations. The US Department of State announced the administrative settlement on Thursday, noting that the agreement resolves numerous breaches of the Arms Export Control Act and the International Traffic in Arms Regulations.
Under the terms of the settlement, the State Department will suspend $18 million of the total penalty, provided that the company invests that amount into enhancing its internal compliance programs. BAE Systems, which voluntarily disclosed all but one of the identified violations, stated that it has “thoroughly cooperated” with the government’s review process.
The violations involved the unauthorized export of technical data to several nations. In December 2023, BAE sent data concerning printed wiring boards for GPS systems to a manufacturer in China. The State Department noted that the company acknowledged its supply chain team lacked a full understanding of compliance regulations, and that its secure file transfer systems failed to flag export control warnings before data was transmitted.
Additional breaches included sending military GPS technical data to Canada in September 2021 after a license agreement had expired, as well as sharing technical specifications for an “explosive mixture” with the UK. Furthermore, technical documentation related to a US Navy guided-missile destroyer was improperly sent to Germany, and a control system for a military gas-turbine engine was accidentally exported to Switzerland without authorization.
Beyond data transfers, the State Department reported that a BAE subcontractor provided unauthorized defence services on more than 17 occasions across Italy, France, and Indonesia. The agency emphasized that the settlement underscores “the importance of exporting defence articles pursuant only to appropriate authorisation from the department.”
In response to the resolution, BAE Systems reaffirmed its commitment to adhering to all export control laws. The company stated it has been working diligently to implement improvements to its US compliance infrastructure over the past several years and remains dedicated to protecting critical information while supporting the security requirements of its customers. The report also notes that the UK defence company BAE Systems is to pay a $36m (£26.7m) civil penalty after breaching US arms exports regulations more than 100 times. The report also notes that on the condition that the $18m was used to strengthen BAE’s compliance programme, it also persuaded the state department to suspend half of the penalty. The report also notes that we take seriously our responsibility to protect critical information and support all our customers’ security,” the company added.
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