By Mike Stone
WASHINGTON (Reuters) – RTX Corp will pay a $200 million fine to settle allegations that the aerospace and defense company violated export laws by sharing data and products with banned countries including China, according to U.S. State Department records dated Thursday.
The fine is due to failure to comply with the International Traffic in Arms Regulations by poorly classifying and controlling exports of defense articles, including classified ones, the State Department said.
RTX voluntarily disclosed its mistakes, telling investors on its July 25 earnings 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 notice released Friday was the first of three legal matters and involved the mistaken provision of intellectual property and technology to China.
One of the cases involved providing Chinese citizens with information about “a component of the aluminum housing of the F-22 Raptor fighter jet display” in Shanghai. The information was found to be more sensitive than RTX employees initially believed.
“As part of the resolution of each of these three matters, we will be required to retain independent compliance monitors for the three-year term of the agreements,” the company said on the earnings call. Half of the fine will go toward funding the compliance program.
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