On May 16, 2011, the State Department entered into a civil settlement with BAE for alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). No court action was involved and BAE agreed to pay $79 million, the largest penalty in State Department history.
BAE pleaded guilty to conspiracy to violate the FCPA and export laws in March 2010. For more information on that enforcement action, see our post here.
Due to the guilty plea in 2010, the State Department stated that it "determined to impose a statutory debarment" on the company but, because a finding that appropriate steps had been taken to mitigate law enforcement concerns, the State Department "concurrently" rescinded the statutory debarment. The State Department did, however, impose a policy of denial on three BAE subsidiaries due to their involvement in the conviction. This means that there will be an initial presumption of denial for all applications involving these entities, unless, upon case-by-case review, the State Department determines that it is in the foreign policy or national security interests of the United States to provide an approval.