Company Agrees to an $8 Million Penalty to Settle Charges of AECA and ITAR Violations

On August 9, 2013, the State Department (State) concluded an administrative settlement with Aeroflex Incorporated (Aeroflex) of Plainview, NY, to resolve alleged violations of the Arms Export controls Act (AECA) and the International Traffic in Arms Regulations (ITAR).

The Office of Defense Trade Controls Compliance determined that Aeroflex demonstrated inadequate corporate oversight and a systemic and corporate-wide failure to properly determine export control jurisdiction over commodities, leading to numerous violations during the period of 1999-2009. Over the course of many years, Aeroflex business units disclosed to the Department of State hundreds of ITAR violations, primarily unauthorized exports resulting from the failure to properly establish jurisdiction over defense articles and technical data. The violations included unauthorized exports and re-exports of ITAR-controlled electronics, microelectronics, and associated technical data and causing unauthorized exports of ITAR-controlled microelectronics by domestic purchasers.

Under the terms of the two-year Consent Agreement with the Department, Aeroflex will pay a civil penalty of $8 million, of which $4 million will be suspended on the condition the Department approves expenditures for self-initiated, pre-Consent Agreement remedial compliance measures and Consent Agreement-authorized remedial compliance costs.