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On August 29, the U.S. State Department revealed that Raytheon Technologies (NYSE：RTX) will pay a $200 million fine for violating the International Traffic in Arms Regulations (ITAR). The aerospace and defense company failed to properly classify and control defense articles, including sensitive items, while sharing data and products with embargoed countries like China.

These violations largely involved Rockwell Collins, a company acquired by United Technologies (now RTX) in 2018. Before the acquisition, Rockwell Collins used Chinese suppliers to manufacture printed circuit boards (PCBs) for various U.S. military aircraft, sending U.S. technical data to China. These PCBs were later supplied to the Pentagon and other defense contractors for use in nearly 20 military aircraft, including Air Force One, the B-1B bomber, U-2 spy plane, B-52 bomber, F-16, F-15, A-10, and F/A-18 fighter jets.

The State Department noted that the company often failed to inform the Department of Defense that these components were sourced from China until long after delivery.

Other violations included unauthorized exports of parts and technical data to U.S. allies like Canada, Japan, the U.K., and South Korea, and RTX employees carrying laptops with sensitive data to restricted countries like Russia, Iran, and Lebanon.

RTX self-reported these violations and disclosed during a July 25 earnings call that it had set aside $1 billion to address multiple legal issues, including the improper transfer of technology to China.

On August 30, after a compliance review by the State Department's Office of Defense Trade Controls Compliance (DDTC), a settlement was reached with RTX. The company agreed to a $200 million fine for violating the U.S. Arms Export Control Act (AECA) and ITAR.

RTX committed 750 violations between 2017 and 2023, including improper classification, unauthorized exports, and non-compliance with license terms. RTX voluntarily disclosed these violations, cooperated with the review, and implemented corrective measures. Under the 36-month settlement, the State Department agreed to suspend $100 million of the fine, contingent on RTX using those funds for compliance improvements. RTX must also appoint a Special Compliance Officer and conduct at least one external compliance audit within the next 24 months.

About RTX

Raytheon Technologies (RTX) is a leading American aerospace and defense company, established in 2020 through the merger of Raytheon Company and United Technologies Corporation (UTC). Headquartered in Arlington, Virginia, RTX ranks among the largest defense contractors globally, delivering advanced systems and services to commercial, military, and government customers.

The company operates through four main divisions. Collins Aerospace focuses on aerospace systems, avionics, and information management services, providing critical components for both commercial and military aviation. Pratt & Whitney is renowned for manufacturing high-performance aircraft engines, used in a wide range of military and commercial aircraft. Raytheon Intelligence & Space specializes in advanced intelligence, surveillance, and reconnaissance (ISR) solutions, playing a crucial role in global security. Finally, Raytheon Missiles & Defense is dedicated to the development of missile systems, air and missile defense systems, precision weapons, and related technologies.

Raytheon Technologies is recognized for its innovation in defense, cybersecurity, and aerospace, making it a key player in shaping the future of global security and aviation industries.

Editor：Lulu

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