Debarment For BAE?

A report posted yesterday in Defense News said the U.S. State Department has placed a “temporary administrative hold” on weapons export licenses “by BAE Systems or companies using BAE Systems’ products.”

The story said the State Department’s action “applies to BAE Systems, Inc. as well as BAE Systems PLC while the department studies the guilty plea and determines whether to take additional action against the company.”

BAE pleaded guilty Monday to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act compliance program, and to violate the Arms Export Control Act and International Traffic in Arms Regulations. It was sentenced to pay a $400 million criminal fine.

U.S. law permits the federal government to ban exports by companies convicted of FCPA and related offenses.

The first debarment notice posted on the State Department’s website Monday was withdrawn and a second notice was changed at least once and then also withdrawn. Defense News quoted a Washington trade lawyer as saying:

One notice Monday, another one Tuesday, and now they’re both down. Which is it, guys? What State has done sends a terrible message. It makes it seem like State does not have a handle on what it wants to do – or that it’s being manipulated by outside interests.

On Wednesday, the State Department said it was “still determining whether to debar BAE Systems, which would limit the company’s ability to export products with U.S.-made content.” But a BAE spokesperson told Defense News the company is “interpreting the current absence of a State Department notice about the hold to indicate that there is none in place.”