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U.S. State Department Announces Resolution of United Technologies Corporation Arms Export Control Enforcement Case

Media Note

Office of the Spokesperson

Washington, DC

June 28, 2012

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United Technologies Corporation (UTC) has agreed to pay more than $75 million as part of a global settlement with the State Department and Justice Department to address arms export violations to China, false and belated disclosures to the U.S. Government about these illegal exports, and many other compliance failures.

An extensive enforcement review by the Department of States Office of Defense Trade Controls Compliance has addressed several hundred civil violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The State Department has reached administrative agreement with United Technologies Corporation to terminate and resolve these violations. This settlement highlights the role of the Department in protecting sensitive American technologies from being illegally transferred to, or received by, unapproved foreign actors.

The Department determined that UTCs numerous violations demonstrated a systemic, corporate-wide failure to maintain effective ITAR controls. Since 2006, UTC operating units and subsidiaries (including Pratt & Whitney, Hamilton Sundstrand Corporation and Sikorsky Aircraft Corporation) have disclosed to the Department hundreds of ITAR violations. A number of the violations may have caused harm to U.S. national security and foreign policy interests.

Accordingly, the Department proposed to UTC a consolidated resolution via an administrative settlement which would ensure immediate, comprehensive and effective remedial action across the companys many operating units and subsidiaries. Among the civil violations settled by UTC are several arising from the unauthorized provision in 2002 and 2003 of U.S. origin, ITAR-controlled engine software for military attack helicopters in the Peoples Republic of China. Concurrently with the administrative settlement, UTC has also agreed with the U.S. Department of Justice to resolve criminal charges related to these transactions. UTC subsidiary Pratt & Whitney Canada Corporation (P&W Canada) has pleaded guilty in the U.S. District Court in Connecticut to a criminal violation of the AECA and ITAR, while UTC, Hamilton Sundstrand and P&W Canada have also entered into a deferred prosecution agreement regarding this and other related charges. UTC and the Departments of State and Justice coordinated the resolution of the civil and criminal matters.

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