L3Harris will pay $13 million fine for export violations

Date: Saturday, September 28th, 2019
Source: Freight Waves

The aerospace and defense company Harris Corp. failed to stop repeated violations of the Arms Export Control Act for several years following notification by the Defense Department of wrongdoing.

Past violations of the Arms Export Control Act by Harris Corp. has resulted in a $13 million civil penalty for the newly formed aerospace and defense contractor L3Harris Technologies, the U.S. State Department said.

According to the State Department, the 131 alleged violations of unauthorized exports of controlled U.S. defense items occurred with Harris Corp. between 2013 and early 2019.

The Defense Department’s Defense Technology Security Administration first notified Harris Corp. of the alleged violations in 2015. The company conducted an internal review and made multiple self-disclosures of additional violations to the U.S. government. The most recent self-disclosure by Harris Corp. occurred on Jan. 22, prior to completing its merger with L3 Technologies.

The violations covered a range of illicitly exported defense technology and software, such as tactical radios, military electronics, remote-controlled vehicles and night-vision equipment, largely due to internal administrative errors, false statements, noncompliant provisos and license terms and conditions, as well as exporting under the wrong license jurisdictions, according to the charging letter.

The charges were initiated against L3Harris by the State Department’s Directorate of Defense Trade Controls.

According to the settlement agreement, Melbourne, FL-based L3Harris must dedicate half of the $13 million penalty toward developing an internal compliance program.

“Compliance officers in these situations should review and pass on to their senior management the consent agreement to ensure they also comprehend the extensive compliance requirements that must be met to fulfill the requirements of these types of settlement conditions,” said Paul DiVecchio, a 40-year export compliance consultant from the Boston area, who reviewed the settlement agreement.

The merger of the two companies closed June 29. William Brown, formerly chairman and CEO of Harris, holds the same role with L3Harris, while Christopher Kubasik, formerly chairman and CEO of L3, became vice chairman and chief operating officer of the new company.

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