Top > Business > 2006 > April > 2006-04-16

Boeing Settles and Pays $15M fine

Boeing decided to settle U.S allegations about violating export regulations and will pay a $15 million fine. Boeing was accused of selling commercial jets equipped with a chip that had potential army uses. The State Department has agreed to settle, and the fine will be a part of a consent decree. The case was one of a series cited by Boeing`s general counsel earlier this year when he warned that the company -- a top Pentagon contractor -- was still struggling to overcome a series of scandals related to procurement and other issues.

Boeing has agreed to hire an outside compliance officer to monitor the company`s export practices, as part of the agreement. Boeing`s practices will be monitored for the next 2 years. "The important thing for the government and for us is that the process at Boeing has been improved to make sure we don`t violate any export regulations going forward," Neale said.

Boeing had faced a fine of up to $47 million over the export without a license of the microchip, which was used in a backup navigation system but was defined as military technology because it could also be used to stabilize and steer guided missiles. The State Department had charged the company with 94 violations of the Arms Control Act, one for each of the jets exported during the period in question that carried the chip.