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Local aerospace company agrees to $20 million in fines | Esterline, subsidiaries penalized for unauthorized sharing of sensitive defense data
A Bellevue-based aerospace and defense technology company has reached a settlement for $20 million in civil penalties against it for inadequate oversight that resulted in the provision of defense articles and technical information to foreign company's without the U.S. government's authorization.
The U.S. Immigration and Customs Enforcement agency reported the consent agreement today between the State Department and Esterline Technologies Corporation, which includes Everett-based subsidiary Korry HMI Solutions and Kirhill-TA in California. The agreement follows a multi-year investigation by ICE, Homeland Security and a review by the Office of Defense Trade Controls Compliance.
Korry HMI Solutions reportedly sent sensitive technical data to a foreign company in Liechtenstein between 1997 and 2010 because Korry had contracted with the company to manufacture night vision components for the U.S. government. The company disclosed the unauthorized exports after conducting its own internal compliance review, which was brought on by a Homeland Security investigation.
The news release states California subsidiary Kirhill-TA allowed foreign nationals unauthorized access to controlled technical data.
The three-year consent agreement commits Esterline to a $20 million fine, however, $10 million of the penalty will be suspended as long as that amount is used to implement remedial compliance measures related to the Office of Defense Trade Controls Compliance's findings that Esterline used poor record keeping and jurisdictional control practices, and improperly administered its licenses and agreements.
To ensure compliance, ICE reports, Esterline will "engage" a special official to oversee the agreement and the company will conduct two audits of its compliance program on top of implementing additional measures, such as improved policies and training. It is Esterline's cooperation with the government, according to ICE, that spared it from administrative debarment.