(MENAFN- Asia Times)
The US State Department has let RTX Corporation off the hook for serious violations of US export control laws that compromised major US military systems. The transactions involved China, Iran and Russia, among others, and the procurement of important parts for defense systems from China.
Despite reporting more than 750 violations, RTX was fined US$200 million, although the de facto actual fine is only half that amount. No other action was taken, with no apparent referrals made to the Department of Justice.
No estimate was made of damages to US security. The fine is just a number pulled out of a hat and is, in fact, a meaningless penalty given the severity of the violations. RTX revenues are around $69 billion annually.
According to the State Department, most of the violations occurred in RTX's Collins Aerospace division, but there were also export violations in other parts of RTX.
The State Department says that its response was not harsher because the company voluntarily disclosed the violations and cooperated with it on strengthening export compliance.
The violations include shipments to Iran, Lebanon, Russia and China. China was used as a parts subcontractor for US defense systems and received export-controlled technical data and design information so they could manufacture components.
These transactions allowed Collins, now a division of RTX, to buy cheap and potentially inferior components from China. Collins has operations in Shanghai and is partnered with China Aerospace Systems Corporation.
The US has three systems for controlling US exports. The State Department administers the Arms Export Control Act and publishes regulations known as the International Traffic in Arms Regulations (ITAR). Defense companies know that most of what they produce is covered under ITAR regulation.
The Commerce Department administers Export Administration Regulations and publishes regulations known as the Commodity Control List (CCL). The CCL covers national security, foreign policy, short-supply, nuclear non-proliferation, missile technology, chemical and biological weapons, regional stability, crime control and terrorist concerns.
The Treasury Department administers various US export sanctions managed by the Office of Foreign Asset Controls. The US has sanctions on Russia, China and Iran. All three countries also run aggressive spying operations against the United States, including extensive cyber hacking, often described as an“advanced persistent threat.”
While the above three agencies administer the programs there is sometimes overlap and controversy over categories that interagency mechanisms are tasked with sorting out.
In addition, other agencies, most notably the Defense Department, the Department of Energy (especially for nuclear-related technology) and US Intelligence (mainly the CIA) participate in establishing technology controls, tracking adversaries and adjudicating export license applications.
Collins Aerospace Rockwell Collins was acquired by
United Technologies Corporation
(UTC)
on November 27, 2018, for $30 billion and now operates as part of
Collins Aerospace , a subsidiary of the
RTX Corporation
(formerly Raytheon Technologies).
A significant part of the company's business is commercial aviation but many of the same products are used in military aviation.
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