Boeing to pay $15 million in fines for violating Arms Control Export Act

US based maker of airplanes, Boeing has agreed to pay $15 million to settle federal allegations. Boeing was accused of breaking the Arms Control Export Act. Apparently, the company had delivered commercial airplanes equipped with a small chip that has military applications.

This is one of the biggest fines ever imposed on a company related to the Arms Control Export Act in the country. This law regulates the sale of defense products to overseas interests.

Boeing has also agreed to oversight requirements as settlements over previous violations does not actually result in full compliance. The charges against the company claimed that Boeing shipped 94 commercial jets overseas between 2000 and 2003 that carried the QRS-11 gyrochip embedded in the flight boxes.

This chip is used in the guidance system of the Maverick missile and required a license for foreign sales. Boeing clarified that the chip on the delivered planes is part of a backup system that maintains an artificial horizon for the pilots. 19 of the delivered planes were delivered to China where such U.S. export of listed defense items is specifically prohibited.

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