3D Systems fined $20 million for US export violations

March 7, 2023

The US Department of State has concluded an administrative settlement with 3D Systems, Rock Hill, South Carolina, to resolve alleged violations of the US Arms Export Control Act (ACEA) and the International Traffic in Arms Regulations (ITAR). It was stated that a settlement, totaling $20,000,000, has been reached following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The Department of State and 3D Systems agreement was in pursuant of ITAR section 128.11, to address alleged violations occurring between 2012-2018 involving the unauthorised exports of technical data to Germany, unauthorised exports and retransfers of technical data to China, a proscribed destination under ITAR section 126.1, unauthorised reexports of technical data to Taiwan, unauthorised exports of technical data to foreign-person employees, and the failure to maintain ITAR records.

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Under the terms of the thirty-six month Consent Agreement, 3D Systems will pay a civil penalty of $20,000,000. The Department has agreed to suspend $10,000,000 of this amount on the condition that the funds will be used for Department-approved Consent Agreement remedial compliance measures to strengthen 3D Systems’ compliance programme. In addition, the company will engage an external Special Compliance officer for at least the first year of the Consent Agreement and will conduct two external audits of its ITAR compliance programme and implement additional compliance measures.

The settlement was said to demonstrate the Department’s role in strengthening US industry by protecting US-origin technical data from unauthorised exports. The settlement also highlights the importance of obtaining appropriate authorisation from the Department before exporting ITAR-controlled technical data.

The company cooperated with the State Department’s review and has been undertaking corrective actions to address the misconduct by expanding the scope of its internal investigation to cover exports of technical data, implementing remedial compliance measures, selling its business unit primarily responsible for ITAR activity, and signing a statute of limitations agreement tolling the statutory period. As such, 3D Systems will not be administratively debarred.

www.3dsystems.com

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