Hey, what could possibly go wrong?

Boeing Could Face Big Fine Due To Microchip

Via a reader:

The State Department has warned Boeing Co. that the aerospace titan could be fined up to $47 million because it sold commercial airliners to China and other countries without obtaining an export license for a tiny electronic chip that has defense applications, The Seattle Times reported Wednesday.

Although it recently obtained permission to export the chips, Boeing didn’t wait.

Early last year, the government conceded Boeing’s right to export the technology as a civilian item rather than a military one. But the State Department alleges that between 2000 and 2003 the company showed “a blatant disregard for the authority of the department,” by misrepresenting facts and making false statements on shipping documents to get around the export restrictions.

Boeing contends it ignored State Department edicts because its lawyers said the department was “without legal authority” to regulate the exports.

The case involves the export of jets that contain a gyroscopic microchip called QRS-11, used as a backup system in determining a plane’s orientation in the air.

On Boeing jets, three microchips are embedded in an instrument box. Acting together, the chips provide a three-dimensional positional reading, telling the pilot through the flight display the precise yaw, roll and pitch of the airplane.

A Boeing document obtained by The Times calls the chip technology “relatively unsophisticated,” but says it also has been used to help stabilize and steer guided missiles.

So I guess I’m not sure what this means. Was the technology not cleared until now, and Boeing didn’t wait because it knew better? Was there an honest misunderstanding? Or was the technology controlled, but since everyone has it now anyway (thanks to Boeing ignoring the State Department) the government gave up trying to regulate it?

In any event, if Boeing truly ignored the government about this sort of technology export, they should be slapped and good. According to this story, regardless of the circumstances, Boeing clearly and willfully ignored government demands, apparently by cheating on the paperwork.

The global economy: Our greatest strength and our greatest weakness.

And residents of Taiwan, Japan, South Korea, and California can rest easy knowing that if they’re hit with missiles incorporating this technology, at least they’ll be “relatively unsophisticated” missiles.


  1. Boeing has been an enormously corrupt company for quite some time now. This is just more of the same.

  2. While I am not a big fan of Boeing, they do have a leg to stand on with this one. [based on the information listed in the story] Specifically, it sounds like the state department is going after Boeing under The Arms Export Control Act (AECA). This act specifically grants the state department the authority to restrict military sales to countries. However, this act only relates to military products. The government by conceding the dual use of the chips, is basically admiting the AECA does not apply. That said, the law that would cover this sale is The Export Administration Act of 1979. As amended, this act gives the Department of Commerce, in consultation with other appropriate agencies, to regulate the export or re-export of U.S.-origin dual-use goods, software, and technology. [side bar in 1996 president Clinton transfered the dual use tech controls from the State department to the Commerce department] Thus, I would think it is reasonable opinion that Boeing is not required to satisfy the state department regulations for those items controlled by commerce department regulations. http://www.exportcontrol.org/index.php/pagetype/htmlpage/id/1373.html Now if Boeing is violating the Commerce department regs, then it is a different story.