The US Department of State announced on 13 August that it had reached an administrative settlement with America’s arm of the UK’s largest defence company, BAE Systems, over breaches of the Arms Export Control Act and the International Traffic in Arms Regulations, known as ITAR.
The violations included unauthorised exports of technical data and defence services, as well as failures to comply with existing export authorisations.
Among the cases identified was the transfer in December 2023 of technical data relating to printed wiring boards for Global Positioning System equipment to a manufacturer in China. According to the State Department, BAE later recognised that members of its supply-chain team had not fully understood the relevant export-control requirements and that its secure file-transfer systems had not adequately flagged the restrictions.
Other breaches included sending military GPS-related technical data to Canada after a licence agreement had expired, transmitting technical information concerning a US Navy guided-missile destroyer to Germany, and sending specifications relating to an explosive mixture to the UK.
A control system for a military gas-turbine engine was also exported without authorisation to Switzerland.
A BAE subcontractor was also found to have provided defence services without the required approval on more than 17 occasions in Italy and France, as well as in Indonesia.
BAE voluntarily disclosed all but one of the alleged violations. Of the $36 million penalty, the State Department suspended $18 million on condition that the money is used to strengthen BAE’s compliance programme.
BAE Systems said it had cooperated with the review and remained committed to complying with export-control laws.
The case raises significant questions about governance in the global arms giant, not least because of the scale of BAE Systems’ international footprint.
In 2024, Action on Armed Violence carried out an extensive investigation into the company’s global military relationships. AOAV identified 93 countries with definite or reported links to BAE Systems between 2013 and 2023, equivalent to almost half of UN member states. Of these, 81 were classified as definite relationships and 12 as reported relationships.
Our investigation also found that BAE’s clients included almost all of the world’s 40 largest military spenders. Eighteen of its 81 definite clients were among SIPRI’s top 20 military spenders, while 36 were in the top 40.
AOAV found that more than half of countries with definite BAE relationships scored below 50 out of 100 on Transparency International’s Corruption Perceptions Index. BAE also had definite relationships with ten of the 32 countries then listed by the UK government as human-rights priorities, and reported relationships with another three.
Twenty-nine of BAE’s 81 confirmed client states had used explosive weapons in incidents reported to have harmed civilians since 2013. Across those states, AOAV recorded 6,292 incidents in which some 44,103 civilians were reported killed or injured, including 24,019 deaths. AOAV stressed that it was not possible to determine whether BAE-produced weapons were involved in individual incidents.
AOAV’s report at the time did not allege that BAE Systems was acting illegally.
Indeed, BAE told AOAV at the time that it complied fully with relevant export laws and rigorously applied responsible-trading standards. The latest fines from the US raise questions as to the accuracy of that statement.
Moreover, they offer a rare glimpse into the practical difficulties of controlling sensitive military technology across sprawling international supply chains.
Such export-control failures go to the heart of whether governments can effectively oversee where military technology travels, who receives it, and whether the regulatory safeguards intended to control the global arms trade are functioning as they should.
As Dr Iain Overton, Executive Director of AOAV, said of the fines: “As one of the world’s largest arms companies, BAE Systems operates across an extraordinarily complex network of countries, subsidiaries and supply chains. These violations show why claims of rigorous compliance cannot simply be taken on trust.”
“When sensitive military data can be transferred without proper authorisation, including to China, it raises serious questions about corporate oversight, export-control enforcement and whether governments are capable of keeping pace with the global arms trade. For a company with BAE’s extraordinary international reach, failures of this kind deserve close public scrutiny.”
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