Export News and Regulations

FLIR Systems Hit with $30 Million Fine in Major Deemed Export Compliance Case

The U.S. Department of State continues to pursue a zero-tolerance policy when it comes to export and deemed export compliance.

FLIR Systems Inc., a company that makes infrared cameras and thermal imaging systems, was accused of violating the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) after they shared ITAR-controlled defense items with dual-national employees from Iran, Iraq, Lebanon, and Cuba.

According to the State Department, the violations included “unauthorized exports of defense articles, including technical data; the unauthorized provision of defense services; violation of the terms of provisos or other limitations of license authorizations; and the failure to maintain specific records involving ITAR-controlled transactions.”[i]

In addition, they also stood accused of retransferring ITAR-controlled technical data and the provision of defense services to multi-national individuals that come from restricted countries which they failed to report during the export compliant process.

The State Department and FLIR have officially reached a settlement requiring the company to pay a $30 million civil penalty. However, the fine will be reduced to $15 million on the condition that the funds be “used for Department-approved Consent Agreement remedial compliance measures.”[ii]

FLIR will also be required to hire an external Designated Official to oversee the Consent Agreement. This will result in an additional two external audits to test and improve upon its deemed exports procedures and existing export compliance program.

According to reports, FLIR willingly reported certain AECA and ITAR violations, acknowledged the severity of their violations, and was generally cooperative with the State Department’s review of their deemed exports and export compliance program.

“We accept responsibility for our actions leading to these penalties,” FLIR Systems Chief Executive Officer James Cannon said in a statement, noting that he is “fully committed to complying with U.S. export control laws.”[iii]

The State Department will not seek administrative debarment for FLIR due to the company’s willingness to cooperate with investigators.

Further reading
Read more about the export compliance considerations surrounding deemed exports in Deemed Export Visitor Compliance: Five Tips for Rolling Out the Red Carpet, and Beware of Elicitation: Gateway to Deemed Export Violations.


[i] Consent agreement. United States Department of State, Bureau of Political-Military Affairs.  https://www.pmddtc.state.gov/sys_attachment.do?sysparm_referring_url=tear_off&view=true&sys_id=1c78debfdb2d1b4044f9ff621f961988. Accessed April 30.

[ii] Ibid.

[iii] FLIR Systems to pay $30 million to settle U.S. allegations: State Department. News Article. Reuters.     https://www.reuters.com/article/us-flir-systems-usa-settlement/flir-systems-to-pay-30-million-to-settle-u-s-allegations-state-department-idUSKBN1HW2X5. Accessed April 30, 3018.


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