Companies involved in producing products or components of products to be used in US defense systems should take note of the following case.

A plasma technology company located in Knoxville, Tennessee has plead guilty to ten counts of illegally providing a Chinese national with technological data used in the development of an unmanned aerial weapons system in violation of the Arms Export Control Act.  The maximum punishment for each offense includes a $1 million fine and a maximum 5 year probation term.  Three agencies, the FBI, the US Air Force Office of Special Investigations, and the Immigration and Customs Enforcement branch collaborated in the investigation. 

In a related indictment, a university professor providing services to the company was also charged with taking restricted documents to China and e-mailing restricted documents to a foreign national.

This case highlights the need for employers to constantly screen the nationality of participants on various government contract projects.  US law prohibits the “export” of defense-related data to any foreign national or foreign nation.  Such disclosure of defense-related information is a ‘deemed export violation.’

Contributed by Robert R. Gillispie