By Mike Stone
WASHINGTON (Reuters) – RTX Corp will pay a $200 million fine to settle accusations that the aerospace and defense company violated export laws by sharing data and products with banned countries including China, a U.S. State Department document showed on Thursday.
The State Department said the fine was the result of failure to comply with the International Traffic in Arms Regulations, which resulted from improper classification and export controls of defense items, including classified goods.
RTX voluntarily disclosed its mistakes and told investors during its July 25 earnings conference call that the company had set aside about $1 billion to resolve three separate legal matters “primarily identified during the integration of Rockwell Collins (NYSE:) and Raytheon (NYSE:) Co. into RTX.”
The State Department notification, released Friday, was the first of three legal proceedings and involved the mistaken delivery of intellectual property and technology to China.
One case involved providing Chinese citizens with information about an “aluminum housing element for an F-22 Raptor fighter jet display” in Shanghai. The information turned out to be more sensitive than RTX initially thought.
“As part of addressing each of these three issues, we will be required to hire independent compliance monitors for the three-year term of the contracts,” the company said on a financial results conference call. Half of the fine will be spent to fund the compliance program.