Pratt & Whitney Canada has pled guilty to U.S. federal criminal charges in connection with the sale of helicopter engine software to the Chinese military.
The aircraft engine design, manufacture, and service corporation’s parent company, United Technologies Corp., and another United Technologies subsidiary, Hamilton Sundstrand Corp., were charged with violating U.S. export control law and making false statements to the U.S. government regarding the illegal export of software for use in the testing and operation of the Z-10 attack helicopter by China. The companies have agreed to pay over $75 million to the U.S. government to settle the charges, and Pratt & Whitney Canada faces limitations on obtaining new U.S. export licenses.
According to reporters Mark Hosenball and Andrea Shalal-Esa (“US, Canada sold military copter tech to China,” Montreal Gazette, 28 June 2012), investigators believe that the corporation intentionally provided the software to win the favour of Chinese authorities in an — ultimately unsuccessful — attempt to gain a piece of the estimated $2 billion civilian helicopter market.
U.S. authorities said that Pratt & Whitney Canada’s initial involvement in the program was to deliver 10 engines to China from Canada in 2001 and 2002. The United States said that for the purposes of this deal, Pratt & Whitney Canada argued that the engines did not constitute defense equipment subject to the U.S. military embargo on China because the engines were identical to those it was supplying China for commercial helicopters.
U.S. authorities maintain that when the software, made in the United States by Hamilton Sundstrand, was modified for use in military helicopters, it thus became subject to the U.S. military embargo on China.
According to court documents, Pratt & Whitney Canada allegedly knew from the outset of the Z-10 project in 2000 that the Chinese were developing a military attack helicopter and that helping them by supplying U.S.-origin components would be illegal. U.S. authorities say that the Canadian subsidiary failed to notify its U.S. parent and Hamilton Sundstrand until years later.
The United States maintains that the Canadian company deliberately turned a blind eye to the military applications of the technology it was exporting to China.
The U.S. government has prohibited the export of U.S. defence equipment and technology to China since the Chinese government’s violent crackdown on the pro-democracy movement in 1989.
Meanwhile, U.S. investigators say, Hamilton Sundstrand back in the United States believed it was providing its software to Pratt & Whitney Canada for use in a civilian Chinese helicopter. By 2004, investigators say, Hamilton Sundstrand learned there might be an export law problem and stopped working on the Z-10 program. But authorities say Pratt & Whitney Canada then modified software on its own and continued to export it to China through June 2005.
Court documents say neither United Technologies, Pratt & Whitney Canada nor Hamilton Sundstrand made any disclosures to U.S. authorities about their knowledge of Pratt & Whitney Canada’s illegal exports to China for several years.
Jay DeFrank, a spokesman for Pratt & Whitney Canada, said the company continued to do business in China.
“China is and remains an important market for UTC and we will continue to do business there in full compliance with the law,” he said.
Photo credit: China Military Online