When a Shipment Becomes a Crisis and How Export Violations Can Cripple a Company
What do General Electric Company, Precision Castparts, RTX, and 3D Systems Corporation all have in common?
If you said they all have a public settlement for allegations of violating ITAR regulations, you’re right!
In global trade, there’s always pressure to move fast. Sales wants to close, customers want their product yesterday, and operations is trying to keep things moving. I’ve witnessed that when that pressure builds, export compliance can start to feel like a speed bump or a wall instead of what it is: a safeguard.
The problem is that it only takes one misstep. One shipment. One wrong assumption, then suddenly you’re not dealing with logistics anymore, you’re dealing with government regulators asking you questions. If there’s one thing I’ve learned, you cannot rush compliance.
Export violations aren’t small issues. They can seriously damage a company in ways that go far beyond a fine.
The “It’s Probably Fine” Trap
Most violations don’t come from bad intent.
They come from the narrative of:
“We’ve shipped this before.”
“It’s low value, it can’t be that controlled.”
“The customer is legit.”
“We don’t need a license for this.”
“Everything we ship is EAR99”
That’s usually where things start to go sideways.
Export controls don’t care about how routine something feels. They care about classification, where’s it going, who’s receiving it, and what are they doing with it. I’ve seen relatively small dollar shipments carry just as much risk as multimillion-dollar shipments because the underlying controls weren’t understood.
When something goes wrong, the fine is just the beginning.
You’re looking at the costs of legal reviews, internal investigations, disruptions to shipments, and an overall slower processes across the board.
And then there’s the reputational hit. Once regulators are involved, your company is on their radar. Customers notice. Partners notice. It changes how people view your business. Your business is no longer known for your innovative ideas, but rather your lack of regard (intentionally or not) for the law!
In some cases, companies lose export privileges altogether. That’s not a setback; that’s a shutdown of part of your business, for many a major source of revenue.
Real Companies, Real Consequences
This isn’t hypothetical. Large, experienced companies have been through this.
General Electric Company (April 2026, $36 Million Settlement)
GE has faced export enforcement actions tied to unauthorized exports and compliance breakdowns within its aviation-related business units. These cases often involved controlled technology and highlighted how even mature organizations can struggle with classification and licensing discipline. The result: financial penalties, mandated compliance improvements, and increased regulatory scrutiny.
Precision Castparts (October 2024, $3 Million Settlement)
A key supplier in the aerospace supply chain, Precision Castparts, encountered export control violations tied to unauthorized exports of controlled components. The case underscored how supply chain players, not just prime contractors, carry significant compliance risk. The penalties were substantial, and the company was required to enhance internal controls and oversight.
RTX (August 2024, $200 Million Settlement)
RTX (formerly Raytheon Technologies) has been involved in multiple export control enforcement actions over the years, including violations under ITAR. These included improper authorizations and failures in handling defense-related technical data. The consequences extended beyond fines, requiring comprehensive compliance program enhancements and long-term monitoring.
3D Systems Corporation (February 2023, $20 Million Settlement)
3D Systems faced enforcement actions related to unauthorized exports of controlled technology, including shipments to restricted destinations. The case is a strong example of how emerging technology companies—especially those dealing with advanced manufacturing—must carefully assess how their products and software are classified and exported.
What Happens After the Violation?
This is the part many companies underestimate.
The government doesn’t just fine you and move on. They make you fix everything.
That usually means you’ve got to invest in rebuilding your compliance program (or building one from the ground up). Your employees all need retraining across departments and functions. You may be required to bring in outside auditors or monitors ($$$), and the settlement more likely will include you reporting back to regulators regularly.
It’s expensive, it’s time-consuming, and it sticks around for years like an ex you can’t shake off.
Where Things Usually Break Down
In my experience, the same issues come up again and again…Misclassification or no real classification process, poor communication between teams (engineering, sales, shipping), a lack of training, your people don’t know what to look for, or the content of your “process” is in someone’s mind and is a completely informal process instead of structured controls.
None of these feel like major problems in the moment, but they add up quickly, and they don’t provide you with anything to back up your story to the enforcement agent.
Intent Doesn’t Protect You
One of the biggest misconceptions I run into is that if something was accidental, it won’t be treated as serious. If you believe you can plead ignorance as your main reason for violating the law, you’re wrong.
That’s not how regulators see it. You could have no mal intent, a good customer, a small shipment…and still end up with a significant violation!
The Bottom Line
Export compliance isn’t about slowing business down. It’s about protecting it.
If your processes are weak, if your team isn’t trained, or if decisions are being made based on assumptions, you’re exposed, whether you realize it or not. I’ve seen how quickly things can escalate. What starts as a routine shipment can turn into fines, audits, and years of oversight.
The good news is that this is preventable. Companies don’t need to rely on guesswork or take unnecessary risks, but they do need to take compliance seriously and build the right foundation.
Because once something goes wrong, you don’t just fix a shipment, you’re stuck fixing your entire organization. Are you concerned you may be like one of the companies discussed in today’s blog and sitting with a violation on your hands? Let our team of experts at Export Solutions help you! We can offer assessments to challenge your current compliance program or aid in building one from scratch. Contact us today for a free consultation. The cost to stay compliant will always be less than your costs if you violate the laws.
Michelle Brown is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm specializing in U.S. import and export regulations.