Company illegally exported software used in Chinese helicopter development

Military Helicopter

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A military helicopter takes flight on September 16, 2011. United Technologies Corp. has pleaded guilty to illegally distributing software oversees used to develop military helicopters.

A division of United Technologies Corp. pleaded guilty Thursday to crimes related to the illegal export of software that U.S. officials say was used by China to develop the country's first modern military attack helicopter.

The subsidiary, Pratt & Whitney Canada Corp.; Hartford, Conn.-based UTC; and another subsidiary also agreed to pay more than $75 million in fines in connection with the export violations and for providing misleading information to the U.S. government.

The U.S. attorney for Connecticut, David Fein, said Pratt & Whitney Canada knowingly committed the violations because it wanted to become the exclusive supplier for a helicopter market in China with projected revenues of up to $2 billion.

"PWC exported controlled U.S. technology to China, knowing it would be used in the development of a military attack helicopter in violation of the U.S. arms embargo with China," Fein said.

At attorney for the company, Paul Beach, said in U.S. District Court in Bridgeport that the firm deeply regrets the violations and has taken substantial action to ensure it will not happen again.

The United States has barred the export of defense articles to China since 1989.

Beginning in the 1990s, China sought to develop its attack helicopter under the guise of a civilian program to secure Western assistance, according to U.S. authorities. Pratt & Whitney Canada delivered development engines to China for what become the "Z-10," China's first military attack helicopter, in 2001 and 2002 after determining on its own that the engines did not require an export license because they were identical to engines already supplied to China for a commercial helicopter, officials said.

U.S. authorities say the electronic engine control software, however, required a U.S. export license because it was modified for a military helicopter application. Authorities say the Canadian subsidiary had six versions of the military software, made by UTC subsidiary Hamilton Sundstrand, sent to China in 2002 and 2003.

Pratt & Whitney Canada pleaded guilty to violating the Arms Export Control Act and making false statements in connection with the illegal export of software.

The fine to be paid by UTC, Pratt & Whitney Canada and Hamilton Sundstrand is part of a settlement with the U.S. Justice Department and the U.S. State Department. As much as $20 million can be suspended if UTC applies to remedial compliance efforts.

Copyright 2012 The Associated Press.

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