Old Problem, New Fine

The State Department has allegedly told Boeing that the company may be fined up to $47 million for selling airliners to China without an export license for a small computer chip. The sales took place between 2000 and 2003.

A letter alleging 94 violations of the Arms Control Act was reportedly obtained by the Seattle Times. It reported that the fine could be up to $500,000 per violation. The State Department alleges that between 2000 and 2003 the company showed "a blatant disregard for the authority of the department."

Boeing says its lawyers determined that the department did not have the authority to regulate the exports.

The government conceded that Boeing could export the technology as a civilian item in January of last year. But they claim that Boeing misrepresented facts and made false statements to avoid the export restrictions prior to that.

A backup gyroscopic microchip is the root of the problem. Three of the chips work together to help the pilot know the yaw, roll and pitch of the aircraft. The chip technology at the time was classified as militarily significant technology to China and other countries.

Boeing said the exports were "made in good faith based upon a well-founded legal opinion."

Boeing says that the charges only apply to activity prior to 2004 and that the company continues "to work with the State Department towards possible resolution of this matter."

FMI: www.boeing.com, www.state.gov