RTX Corp to Pay $200 Million Fine

By Mike Stone
WASHINGTON (Reuters) – RTX Corp will pay a $200 million fine to settle allegations of violating export laws by exchanging data and products with prohibited countries, including China, as per U.S. State Department records dated Thursday.

The fine arises from RTX’s failure to adhere to the International Traffic in Arms Regulations due to improper classification and control of defense article exports, including classified items, according to the State Department.

RTX voluntarily disclosed these errors and informed investors during its earnings call on July 25 that it had earmarked approximately $1 billion to address three legal issues, primarily identified during the integration of Rockwell Collins (NYSE:COL) and Raytheon (NYSE:RTN) Co. into RTX.

The notification from the State Department released on Friday was the first of these legal issues and included unintentional sharing of technology and intellectual property with China. One significant incident involved providing Chinese nationals with details about an aluminum display housing component of the F-22 Raptor Fighter Aircraft in Shanghai, which was deemed more sensitive than initially assessed.

As part of resolving these matters, RTX will engage independent compliance monitors for a three-year duration of the agreements. Approximately half of the fine will finance the compliance program.