RTX to Pay Record $200M to Settle Alleged Defense Export Control Violations

The State Department fined U.S. defense firm RTX Corp. $200 million to settle alleged violations of the Arms Export Control Act and the International Traffic in Arms Regulations, one of the largest standalone export penalties ever issued by the agency. The Directorate of Defense Trade Controls said the 750 violations, most of which involved the “historical systemic failures” of an aerospace systems company acquired by RTX, stemmed from export control classification issues, the illegal “hand-carry” of defense items to another country and violations of the terms of DDTC licenses. RTX voluntarily disclosed the violations, which included exports of prohibited items to Lebanon, Iran, Russia and China.

As part of a consent agreement released Aug. 30, RTX must pay $34 million to DDTC within 10 days, $33 million within one year and another $33 million within two years. The company must use the remaining $100 million to make specific improvements to its compliance procedures.