Among the penalties for its 131 alleged violations, L3Harris faces a civil fine of $13 million, of which $6.5 million may be suspended if the company puts the money into corrective compliance fees in accordance with the agreement. It is important to note that the penalties in the agreement apply to the “agents and successors” of the business, which means that the terms of the approval agreement apply to the buyer, even if the business is sold or is part of a merger. The importance of proper classification and monitoring of ITAR-controlled articles and agreements cannot be overstated. Compliance with U.S. export rules is based on the correct classification of the object or technology in question. As noted above, many of the offences in United Technologies are due to the misclassification of defence articles. The correct labelling or labelling of ITAR items is equally important. How do you identify physical products as ITAR-controlled? Are they stored in a separate area, accompanied by the day or otherwise known as the ITAR command, or are they mixed with non-ITAR products? How do you back up and identify ITAR-controlled technology that is maintained electronically? Each of these issues, for which there is no formal procedure, may result in unintentional offences. The U.S. State Department says the approval agreement is not just about illegal exports, but “misrepresentations and delayed revelations to the U.S. government about these illegal exports and many other compliance errors.” While it recognizes voluntary allegations as mitigating factors, it has decided to subject the company to 576 offences “in light of the harm to national security and the long-standing and repeated systemic nature of certain offences,” says a proposed royalty letter.
While PWC pleaded guilty to Counts 1 and 2, the Department of Justice recommended that the UTC and HSC`s prosecution of Count Two and PWC and Count 3 be postponed for two years, provided the companies complied with the terms of a deferred prosecution agreement with the Department of Justice. As part of the agreement, companies must pay $75 million and maintain an independent monitor to monitor and assess their compliance with export laws for the next two years. The management of activities authorized under DDTC agreements is also essential. We often find that companies are not adequately prepared to deal with the complexities of tracking and calculating items, technologies and services traded under an approved agreement. There is no “one size fits all” method for monitoring and devaluing these agreements; On the contrary, an effective approach must be adapted to the specific activities authorized by the agreement. The scope of an approved agreement is generally exceeded in two ways: the value and scope of authorized access to technology. It is easy to understand how a chord can be exceeded in value, for example. B when goods are manufactured at a value greater than the permitted value under an agreement. Things become more complicated, especially when there is no effective method of devaluation of the agreement to track and evaluate the services provided or provided as part of an agreement. Similarly, the level of access to controlled technology authorized under an agreement is often exceeded. Several variables may take into account the difficulty of managing this aspect of an approved agreement, including the fluctuation of employees within your subsidiary or foreign partner, the poor IT control of controlled technology abroad, the lack of training and understanding within your foreign subsidiary or partner regarding the release and sharing of controlled technologies.
, as well as all contractors or outsourced functions of your foreign partner.