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State Department Concludes Settlement of Alleged AECA and ITAR Violations by Intersil Corporation


Media Note
Office of the Spokesperson
Washington, DC
June 18, 2014

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The U.S. Department of State concluded an administrative settlement with Intersil Corporation of Milpitas, California, to resolve alleged violations of the Arms Export Control Act (AECA) (22 U.S.C. § 2778) and the International Traffic in Arms Regulations (ITAR) (22 C.F.R. Parts 120-130). Intersil agreed to enter into a consent agreement with the Department pursuant to ITAR Section 128.11, following an extensive compliance review by the Department’s Directorate of Defense Trade Controls (DDTC) in the Bureau of Political-Military Affairs. This settlement resolves 339 alleged past civil violations of the AECA and ITAR, and highlights the Department’s responsibility to protect U.S. defense articles from unauthorized export, re-export, and retransfer.
 
DDTC’s compliance review concluded that many of these alleged violations occurred because Intersil did not properly establish ITAR jurisdiction over its radiation hardened and tolerant integrated circuit commodities. These commodities are defense articles controlled on the U.S. Munitions List under Category XV(d) and (e). Certain commodities were exported, re-exported, or retransferred to entities on DDTC’s Watch List. Some of these entities were known front companies for or diversion points to countries proscribed under ITAR Section 126.1. These transactions were contrary to U.S. foreign policy and potentially harmed U.S. national security.
 
Under the terms of a two year Consent Agreement with the Department, Intersil will pay a civil penalty of $10 million. The Department agreed to suspend $4 million of the penalty amount on the condition the Department approves expenditures for self-initiated, pre-Consent Agreement remedial compliance measures and Consent Agreement-authorized remedial compliance costs. Additionally, Intersil will establish an Internal Special Compliance Official position at the company to oversee the Consent Agreement, and Intersil will conduct two audits of its compliance program as well as implement additional compliance measures, such as improved policies and procedures, and additional training for employees and principals.
 
Intersil disclosed the alleged AECA and ITAR violations resolved under this settlement to the Department, acknowledged the serious nature of the alleged violations, cooperated with the Department, and implemented or has planned extensive remedial measures. For these reasons, the Department determined that administrative debarment of Intersil was not appropriate at this time.
 
The Consent Agreement and related documents will be available for public inspection in the Public Reading Room of the U.S. Department of State and on the Directorate of Defense Trade Controls website at http://www.pmddtc.state.gov/compliance/consent_agreements.html.
 
For additional information, please contact the Bureau of Political-Military Affairs’ Office of Congressional and Public Affairs at PM-CPA@state.gov.



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