AeroVironment Inc. will pay a $500,000 penalty after reaching a two-year settlement agreement with the U.S. State Department over alleged export violations of defense equipment, including technical data.
The Simi Valley unmanned aircraft manufacturer voluntarily reported the Arms Export Control Act and International Traffic in Arms Regulations violations that occurred between June 2014 and December 2016.
The company was levied a $1 million penalty to be paid over two years but $500,000 of that amount was suspended and credited against investments it has made or will make to enhance its export controls. Also, the company will hire an outside special compliance officer for one year and conduct an external audit to assess and improve its compliance program.
The company is alleged to have illegally exported military equipment; not properly maintained records involving controlled transactions; and violated the provisos, terms and conditions of export authorizations.
Melissa Brown, AeroVironment vice president and general counsel, said that AeroVironment understands the importance of protecting its technology while making it available to allies and therefore takes U.S. export regulations seriously.
“We will continue to enhance our export controls and appreciate the Department of State’s acknowledgement of the corrective actions we have already taken,” Brown said in a statement.
“AeroVironment acknowledged the serious nature of the alleged violations, cooperated with the department’s review and instituted a number of compliance program improvements during the course of the department’s review,” the State Department said in a statement. “For these reasons, the department has determined that it is not appropriate to administratively debar AeroVironment at this time.”
The settlement announcement was made on Thursday. On Monday, shares of AeroVironment (AVAV) closed up $2.04, or 3.5 percent, to $60.44 on the Nasdaq.