U.S. Dept. of State: $30 Million Settlement of Alleged Export Violations

U.S. Dept. of State: $30 Million Settlement of Alleged Export Violations

The Department of State concluded an administrative settlement with FLIR Systems, Inc. of Wilsonville, Oregon, to resolve alleged 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 FLIR have 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.

This case involves one the world’s largest commercial company specializing in thermal imaging cameras and sensors. The State Department’s Directorate of Defense Trade Controls charged this company with 347 violations of the Arms Export Control Act and the International Traffic in Arms Regulations, including the following.

• unauthorized exports to foreign national employees at 22 non-U.S. facilities

• failing to collect and maintain records of reexports of technical data on its information technology systems

• misrepresenting and/or omitting material facts in license applications

• providing inaccurate information concerning implementation of anticipated corrective actions

• failing to retain records or obtain endorsements by U.S. Customs and Border Protection on temporary export licenses

• causing the loss or theft of temporarily exported defense articles

• failing to ensure foreign forwarders correctly identified defense articles as significant military equipment in electronic export information filing

• failing to maintain complete or legible export control records related to shipping

• failing to incorporate export control statements as integral parts of the bill of lading, air waybill, or other shipping document

• including statements in export documents misrepresenting that the ITAR shipment was subject to the Export Administration Regulations

• attempting to use an ineligible party as a party to the export

[above details Summarized by Sandler, Travis & Rosenberg]

The Department has agreed to suspend $15,000,000 of this amount on the condition that the funds have or will be used for Department-approved Consent Agreement remedial compliance measures. Also, FLIR must hire an external Designated Official to oversee the Consent Agreement, which would require the company to conduct two external audits to assess and improve its compliance program during the Agreement term as well as implement additional compliance measures.

Click here to see the Dept. of State press release