Today’s lesson in compliance comes from Raytheon Corporation, which recently agreed to pay the US Department of State $8 million to settle alleged violations of the International Traffic in Arms Regulations. What’s the lesson? Pay now, or pay much more later. From attorney Reid Whitten at Sheppard Mullin:
“The size of the penalty catches the eye, but beyond the whopping number is a sizeable lesson to be drawn from such enforcement actions: when a company forgoes the expense of maintaining its ITAR compliance system, it risks paying a much greater price if a breakdown occurs.
Folks tend to gripe about the money they shell out to have oil changed, filters replaced, or tires rotated. But the smart vehicle owners among us know that, however much we may complain at the time, we are paying only a pittance in the present to prevent a future fiasco. Maintenance and upkeep of a vehicle are key to long-term performance and, maybe more importantly, critical to avoiding that terrible day where your ride gives out on you, leaving you alone and stranded on the highway-side, your engine billowing smoke, while all the other drivers cruise past you, smug in their well-kept cars.
Similarly, the breakdowns that allegedly led to the Raytheon settlement were eminently avoidable. According to a State Department press release, the Office of Defense Trade Controls Compliance (DTCC) determined that ‘numerous violations demonstrated a recurring, corporate-wide weakness in maintaining effective ITAR controls.’”
Read the full update, $8 Million Penalty for Weak ITAR Compliance: How the Price of Maintenance Beats the Cost of Repair - Sheppard Mullin Richter & Hampton LLP»