Honeywell was fined $13 million for allegedly exporting sensitive data to several countries, including China, without obtaining proper authorization, the Department of State announced on May 3.
The State Department’s spokesperson said in a statement that it concluded a settlement with Honeywell International to resolve alleged violations of export rules when the company exported and retransferred technical information about U.S. fighter jets and other military systems without authorization to Canada, China, Ireland, Mexico, and Taiwan.
The exported data “contained engineering prints showing dimensions, geometries, and layouts for manufacturing castings and finished parts for multiple aircraft, gas turbine engines, and military electronics,” a department spokesperson said.
The violations Honeywell has been charged with occurred within a four-year period and include sending to foreign companies, without permission, technical details of military aircraft such as the Lockheed Martin F-35 and F-22, helicopters, tanks, and Raytheon’s Tomahawk cruise missiles, according to a proposed charging letter sent by the State Department to the company.
In 2015, Honeywell disclosed to the authorities 71 drawings that it sent to foreign suppliers, 65 of which allegedly violated the U.S. export and transfer rules, the letter stated. The company exported 51 of these drawings to communist China, according to the letter.
In 2018, Honeywell submitted a second voluntary disclosure of technical documents that violated export restrictions, which included 23 drawings exported to Mexico, two to Canada, and two to China, the letter said.
The U.S. government determined that exports to and retransfers in China of drawings for certain parts and components of military equipment disclosed in both sets of documents harmed national security
https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=113eab0b1bb764902dc36311f54bcb42 From the US Department of State Directorate of Defense Trade Controls Charging Letter:
“Honeywell Aerospace's Integrated Supply Chain (ISC) organization sent Request for Quotations (RFQs) to U.S. and foreign suppliers that contained drawings of parts for which suppliers were asked to provide price quotations. ISC personnel generally transfer drawings to suppliers through a file exchange platform called DEXcenter. In December 2015, Honeywell initially disclosed to the Department that it had identified multiple ITAR-controlled drawings that ISC personnel had exported without authorization via DEXcenter to Taiwan and the People's Republic of China (PRC) in July 2015. By March 2017, based on an internal investigation and additional analysis conducted at the Department's request, Honeywell ultimately identified 71 ITAR-controlled drawings that between July 2011 and October 2015 it had exported without authorization via DEXcenter to Canada, Ireland, the PRC, and Taiwan”
“The 71 drawings...contained engineering prints showing layouts, dimensions, and geometries for manufacturing castings and finished parts for multiple aircraft, military electronics, and gas turbine engines, including but not limited to the:
• F-35 Joint Strike Fighter,
• B-1B Lancer Long-Range Strategic Bomber,
• F-22 Fighter Aircraft,
• C-130 Military Transport Aircraft,
• A-7H Corsair Aircraft,
• A-10 Aircraft,
• Apache Longbow Helicopter,
• M1A1 Abrams Tank,
• Tactical Tomahawk Missile, and
• T55 Turboshaft Engine.
“In its September 2016 full voluntary disclosure, Honeywell informed the Department of multiple corrective actions it had taken to prevent the types of violations it disclosed from recurring.”
“In October 2018, Honeywell submitted a second voluntary disclosure describing how personnel in the same organization within Honeywell Aerospace, ISC, committed another series of ITAR violations that were similar to the violations disclosed in the first voluntary disclosure. According to the second voluntary disclosure, a team of U.S. ISC personnel invented what Honeywell referred to as “an alternative process, which the team believed complied with export compliance requirements,” for soliciting RFQs.”
Three key points:
1. Honeywell “fixed” the process. so then employees found a work around to continue to illegally export drawings.
2. Two instances of major violations result in only a $13M fine is a slap on the wrist. How much did Honeywell save by moving the manufacture of these parts from the US to China, Taiwan and Mexico? I bet it was considerably more than only $13M.
3. AND THE KICKER - the head of ISC when these violations occurred was promoted and is now the Honeywell Aerospace President. So crime does pay!