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UTC Subsidiary Guilty of Aiding China’s Helicopter Program
BRIDGEPORT, Conn. – Pratt & Whitney Canada Corp., a Canadian subsidiary of United Technologies Corporation (UTC), has pleaded guilty to violating the Arms Export Control Act and making false statements in connection with its illegal export to China of U.S.-origin military software used in the development of China’s first modern military attack helicopter, the Z-10.
As part of the settlement, UTC, its U.S.-based subsidiary Hamilton Sundstrand Corporation and PWC have agreed to pay more than $75 million. Roughly $20.7 million of this sum is to be paid to the Justice Department. The remaining $55 million is payable to the State Department as part of a separate consent agreement to resolve outstanding export issues, including those related to the Z-10. Up to $20 million of this penalty can be suspended if applied by UTC to remedial compliance measures.
The charges against UTC, PWC and HSC were filed in the District of Connecticut. Count One charges PWC with violating the Arms Export Control Act in connection with the illegal export of defense articles to China for the Z-10 helicopter. Count Two charges PWC, UTC and HSC with making false statements to the U.S. government in their belated disclosures relating to the illegal exports. Count Three charges PWC and HSC with failure to timely inform the U.S. government of exports of defense articles to China.
While PWC has pleaded guilty to Counts One and Two, the Justice Department has recommended that prosecution of UTC and HSC on Count Two, and PWC and HSC on Count Three be deferred for two years, provided the companies abide by the terms of a deferred prosecution agreement with the Justice Department.
Since 1989, the United States has imposed a prohibition upon the export to China of all U.S. defense articles and associated technical data as a result of the conduct in June 1989 at Tiananmen Square by the military of the People’s Republic of China. In February 1990, the U.S. Congress imposed a prohibition upon licenses or approvals for the export of defense articles to the People’s Republic of China. In codifying the embargo, Congress specifically named helicopters for inclusion in the ban.
David B. Fein, U.S. Attorney for the District of Connecticut, announced the settlement along with Lisa Monaco, Assistant Attorney General for National Security, and other high-ranking officials. The companies admitted conduct set forth in a stipulated and publicly filed statement of facts.
The Z-10, developed with assistance from Western suppliers, is China’s first modern military attack helicopter. During the development phases of China’s Z-10 program, each Z-10 helicopter was powered by engines supplied by PWC. The company has agreed to pay the fines and comply with export laws for the next two years under a deferred prosecution agreement with the Justice Department.
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Key Facts
- State: Connecticut
- Category: Weapons
- Source: DOJ Press Release ↗
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