United Technologies sold military software to China

United Technologies, Canada-based Pratt and Whitney and US-based Hamilton Sundstrand Corporation entered guilty pleas to criminal charges and agreed to pay more than US$75m to the government in a settlement, the Justice Department said in a statement.

Pratt and Whitney admitted to selling to China military software that is designed to test and control the company's helicopter engines, it said.

The technology helped China develop a new combat helicopter, the Z-10.

Pratt and Whitney pleaded guilty to violating the arms export control act while United Technologies and Hamilton Sundstrand Corporation admitted to making false statements to US authorities.

The companies had claimed in statements to the State Department that they initially believed their exports would be used for a civilian helicopter that would form the basis for a military chopper. However, executives admitted they knew from the start that the software was for a military aircraft, despite a US embargo on arms sales to China, the Justice Department said.

Of the US$75m owed in the settlement, about US$20.7m is due to be paid to the Justice Department and the remaining US$55m will be paid to the State Department. The payments include turning over profits made in the deal with China.

"This case is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses," said John Morton, director of US Immigration and Customs Enforcement.

"I am hopeful that the conviction of Pratt & Whitney Canada and the substantial penalty levied against United Technologies and its subsidiaries will deter other companies from considering similarly ill-conceived business practices in the future," he said.

Source: AFP via I-net Bridge