The approval agreement and related documents will be made available to the public on the website of the Directorate of Commercial Defence Controls under www.pmddtc.state.gov/compliance/consent_agreements.html. The approval agreement remains in effect for four years. UTC will pay $20.7 million in fines, cash and other penalties to the Department of Justice and US$55 million to the State Department. The U.S. State Department has suspended $20 million of the $55 million, on the condition that it be used for expert measures. In addition, UTC, its U.S. subsidiary Hamilton Sundstrand Corporation (HSC) and PWC, have agreed to pay more than $75 million as part of a comprehensive agreement with the Department of Justice and the State Department on violations of arms exports to China and for misrepresentations and late revelations to the U.S. government about these illegal exports. Approximately $20.7 million will be provided to the Department of Justice. The remaining $55 million is to be paid to the State Department as part of a separate approval agreement to resolve outstanding export issues, including Z-10 issues. Up to $20 million of this penalty may be suspended if applied by UTC on challenges.
As part of the comparison, the companies admitted conduct set out in an agreed and publicly presented statement of facts. Today`s actions were announced by David B. Fein, U.S. Attorney for the District of Connecticut; Lisa Monaco, Assistant Attorney General for National Security; John Morton, Director of Immigration and Customs Enforcement of the United States (ICE); Ed Bradley, Special Representative of the Northeast Field Office of the Defense Criminal Investigative Service (DCIS); Kimberly K. Mertz, Special Agent, FBI New Haven Division; David Mills, Assistant Secretary of the Department of Commerce for Export Enforcement; Andrew J. Shapiro, Assistant Secretary of State for Political and Military Affairs. The U.S. State Department says the approval agreement is not just about illegal exports, but “misrepresentations and delayed revelations to the U.S. government about these illegal exports and many other compliance errors.” While it recognizes voluntary allegations as mitigating factors, it has decided to subject the company to 576 offences “in light of the harm to national security and the long-standing and repeated systemic nature of certain offences,” says a proposed royalty letter. In addition, it should be noted that even if there is a method of tracking products and services traded under an approved agreement, the scope of the agreement can still be easily exceeded if the U.S. and non-agreement parties are not trained within the specific parameters of the agreement.
The importance of proper classification and monitoring of ITAR-controlled articles and agreements cannot be overstated.