- BAE Systems has agreed to pay a $36 million fine for 104 violations of U.S. export controls, including unauthorized transfers of technical data to China.
- In December 2023, BAE's subsidiary sent technical data for a wiring board used in a GPS device to a manufacturer in China, resulting in 38 violations.
- The U.S. State Department announced an administrative settlement, fining BAE Systems $36 million, with $18 million suspended if spent on compliance improvements.
- BAE will engage an external compliance officer to audit its export controls program for at least 24 months.
- The violations involved unauthorized export of technical data to several countries, including China, and noncompliance with the terms of export licenses for defense products.
- BAE's supply chain team did not fully understand what constituted violations of export controls, and its file transfer software failed to issue warnings before the designs were sent.
- BAE voluntarily reported all but one of the violations to the State Department and cooperated fully with its investigation.
BAE Systems has been penalized with a $36 million fine for 104 violations of U.S. arms export regulations, primarily involving unauthorized exports of technical data to countries including China. The violations occurred between 2019 and 2025, with a significant incident in December 2023 involving the transfer of technical data for a GPS device.12346
The U.S. State Department noted that BAE's supply chain team lacked a full understanding of export control requirements, and their file transfer software failed to issue necessary warnings. As part of the settlement, BAE will engage an external compliance officer for at least 24 months to audit its export controls program.57
The company has voluntarily reported most violations and has been cooperating with the investigation. The State Department will suspend $18 million of the fine if BAE invests that amount in improving its compliance program. BAE has stated its commitment to adhering to all export control laws and has been working to enhance its compliance measures over the past few years.
The violations included unauthorized exports to Canada, Germany, and other countries, with instances of providing technical specifications for military systems without proper licenses. BAE's subcontractors also provided defense services in multiple countries without authorization, further complicating the company's compliance landscape.
The settlement underscores the importance of stringent adherence to the U.S. Arms Export Control Act and the International Traffic in Arms Regulations as BAE seeks to rectify its compliance failures and restore its standing in the defense sector.
“The violations included sending technical data for a military GPS circuit board to a Chinese manufacturer in December 2023, and providing Canada with data after a license expired. BAE's supply chain team lacked understanding of export controls, and its file transfer software failed to flag the transfers.”
WSJ
