The U.S. Department of State has concluded an administrative settlement with Precision Castparts Corp. (PCC) of Lake Oswego, Oregon, to resolve 24 violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. parts 120-130. The Department of State and PCC reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.
The administrative settlement between the Department of State and PCC, concluded pursuant to ITAR § 128.11, addresses PCC’s unauthorized exports to foreign person employees from Bhutan, Burundi, El Salvador, Honduras, Mexico, and Peru pertaining to tools (specifically, wax pattern and core dies) and wax patterns consumed in the subsequent production of casting blades used in gas turbine engines.
All of the violations were voluntarily disclosed and predate 2020. PCC cooperated with the Department’s review of this matter and has incorporated improvements to its compliance program since the conduct at issue.
Under the terms of the 36-month Consent Agreement, PCC will pay a civil penalty of $3 million. The Department has agreed to suspend $1 million of this amount on the condition that the funds will be used for Department-approved Consent Agreement remedial compliance measures to strengthen PCC’s compliance program. In addition, for a minimum of two years, PCC will appoint an individual to serve as an Internal Special Compliance Officer (ISCO) to oversee the Consent Agreement, which will also require an external audit of its ITAR compliance program and implementation of additional compliance measures.
The settlement demonstrates the Department’s role in furthering the national security and foreign policy of the United States by controlling the export of technical data to foreign person employees. The settlement also highlights the importance of exporting technical data only pursuant to appropriate authorization from the Department.
The Consent Agreement and related documents will be available for public inspection in the Public Reading Room of the Department of State and on the Penalties & Oversights Agreements section of the Directorate of Defense Trade Controls’ website.