Japan Firm Fined for Iran Military Sales : Arms exports: The company admits violating U.S. law in a 1980s deal to transfer jet fighter components to Tehran.
A leading Japanese military contractor pleaded guilty Wednesday to illegally selling Iran critical components to maintain U.S.-made jet fighters during Iran’s long war with Iraq.
Japan Aviation Electronics Industry Ltd. immediately paid a $10-million fine and was assessed an additional $5-million civil penalty by the State Department, which licenses defense-related U.S. exports.
U.S. Attorney Jay B. Stephens said the $10 million in criminal fines--$1 million for each of the 10 counts of violating the Arms Export Control Act to which the firm pleaded guilty--”is three times larger than any criminal fine ever previously imposed and collected in an export-violation case.”
In court Wednesday, Ronald Liebman, a Washington attorney for the firm, assured chief U.S. District Judge Aubrey Robinson that “the $10,000” check for full payment had been tendered.
“No, it’s 10 million,” Robinson said. “Otherwise, the whole thing (plea agreement) is absolutely kaput.” Liebman assured the judge that he meant $10 million.
Most important for the company, which is mainly owned by the Tokyo-based electronics giant NEC Corp., the plea agreement lifts the U.S. government’s suspension of its eligibility to receive U.S.-licensed technology and defense-related exports.
Outside court, Liebman said the suspension had done “pretty substantial” damage to the company’s ability to serve its principal customer, Japan’s Air Self-Defense Force, which operates U.S.-built F-4 Phantom jet aircraft.
A federal grand jury returned a 22-count indictment last Sept. 4 against JAE, Aero Systems Inc. of Florida and three of its subsidiaries, and five employees of JAE and Aero Systems. They were charged with taking part in a scheme from 1984 to 1987 to illegally transfer to Iran more than $7 million worth of navigational components for American-made F-4s.
Under a licensing agreement approved by the State Department, the Japanese firm had been authorized to manufacture components for the F-4 navigational system, but was barred from selling the components or related technology for use by any party other than the Japanese military.
In Wednesday’s plea, JAE admitted that between February and September, 1986, it sold 127 gyroscopes and one accelerometer--components of the F-4’s inertial navigation system--”with knowledge that the components would be illegally exported from Japan to Iran through Iranian diplomatic channels,” Stephens said.
While the flat export and license ban has been lifted, the firm is barred for one year from any new exports of defense articles intended for customers other than the Japanese government and for 90 days from any new exports of civilian goods to any customers but the governments of Japan and the United States.
