U.S. Department of State Concludes $20,000,000 Settlement of Alleged Export Violations by 3D Systems Corporation

The U.S. Department of State has concluded an administrative settlement with 3D Systems Corporation (3D) of Rock Hill, South Carolina, to resolve alleged violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130.  The Department of State and 3D have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The Department of State and 3D have reached an agreement pursuant to ITAR § 128.11 to address alleged ITAR violations occurring during the period of 2012 – 2018 involving unauthorized exports of technical data to Germany, unauthorized exports and retransfers of technical data to the People’s Republic of China (PRC), a proscribed destination under ITAR § 126.1, unauthorized reexports of technical data to Taiwan, unauthorized exports of technical data to foreign-person employees, and the failure to maintain ITAR records.

The settlement demonstrates the Department’s role in strengthening U.S. industry by protecting U.S.-origin technical data from unauthorized exports.  The settlement also highlights the importance of obtaining appropriate authorization from the Department before exporting ITAR-controlled technical data.

Under the terms of the 36-month Consent Agreement, 3D Systems Corporation will pay a civil penalty of $20,000,000.  The Department has agreed to suspend $10,000,000 of this amount on the condition that the funds will be used for Department-approved Consent Agreement remedial compliance measures to strengthen 3D’s compliance program.  In addition, the Company will engage an external Special Compliance officer for at least the first year of the Consent Agreement and will conduct two external audits of its ITAR compliance program and implement additional compliance measures.

The Company cooperated with the Department’s review and has been undertaking corrective actions to address this historic conduct by expanding the scope of its internal investigation to cover exports of technical data; implementing remedial compliance measures; selling its business unit primarily responsible for ITAR activity; and signing a statute of limitations agreement tolling the statutory period.  For these reasons, the Department has determined at this time that it is not appropriate to administratively debar 3D Systems Corporation.

The Consent Agreement and related documents will be available for public inspection in the Public Reading Room of the Department of State and on the Penalties and Oversights Agreements section of the Directorate of Defense Trade Controls’ website.

For additional information, please contact the Bureau of Political-Military Affairs’ Office of Congressional and Public Affairs at [email protected].