TE Connectivity settles with US for illegally shipping components to Chinese entities

By Karen Freifeld

(Reuters) – Global electronics company TE Connectivity (NYSE:) has agreed to pay $5.8 million to settle with the U.S. Department of Commerce for illegally shipping items to parties tied to Chinese hypersonics, drone and military electronics programs.

TE Connectivity violated U.S. export control laws 79 times between 2015 and 2019, mostly by shipping wires, circuit-board connectors and other low-level items to restricted customers, the Commerce Department said in a statement on Thursday.

The U.S. imposed sweeping export controls on U.S. technology and added hundreds of Chinese parties to its export control list in recent years to limit China’s ability to strengthen its military in ways that threaten U.S. national security.

Switzerland-based TE Connectivity, the Pennsylvania and Hong Kong units of which were named in the settlement agreement, voluntarily disclosed violations of those controls to the Commerce Department’s Bureau of Industry and Security (BIS) after they discovered them, the department and company said.

The department’s investigation found TE exported $1.74 million worth of items to Chinese parties on its restricted “Entity List,” among other violations. Company representatives in China concealed and disguised certain customers, such as state-owned military corporations, the department said.

“Today’s penalty takes into account both the cooperation of TE Connectivity in disclosing violations to us and the seriousness with which we act when a company permits China’s destabilizing military modernization programs to benefit from U.S. technology,” Commerce official Matthew Axelrod said in the statement.

“We have fully cooperated with BIS and are pleased to have reached a settlement in this matter,” a TE Connectivity spokesman said in a statement. “We have a strong commitment to compliance with trade laws.”