RTX Corp (RTX.N) has agreed to pay a $200 million fine to settle allegations that it violated U.S. export laws by sharing data and products with prohibited countries, including China, according to U.S. State Department records dated Thursday.
The fine is tied to the company’s failure to comply with the International Traffic in Arms Regulations (ITAR), which govern the export and import of defense-related articles and services. The State Department indicated that RTX mishandled the classification and control of defense articles, including classified ones.
RTX voluntarily disclosed these violations and informed investors during its July 25 earnings call that it had set aside approximately $1 billion to address three separate legal issues. These issues were primarily identified during the integration of Rockwell Collins and Raytheon Co. into RTX. The State Department’s notification, released on Friday, addressed the first of these legal matters, which involved the inadvertent provision of intellectual property and technology to China.
One notable incident included sharing information with Chinese citizens in Shanghai about an aluminum display housing component of the F-22 Raptor Fighter Aircraft. The sensitivity of this information was later found to be higher than initially assessed by RTX employees.
As part of the resolution of these legal matters, RTX will be required to retain independent compliance monitors over a three-year period. Half of the $200 million fine will be allocated to fund the company’s compliance program.
