International Trade Law News

At an August 17, 2004 hearing before Senior Judge John Garrett Penn of the U.S. District Court of the District of Columbia, Interaero Inc., of Westlake Village, California, pleaded guilty to violating the Arms Export Control Act in connection with sales of military aircraft and missile parts to China.

In entering the company's guilty plea, Arthur Hale, president of Interaero, admitted that the company sold six shipments of military aircraft parts valued at more than $40,000 to a company located in China without obtaining the required Department of State export licenses. The shipments included parts for F-4 Phantom Fighters, F-5 Phantom/Tiger Fighters and Hawk Missiles. The military aircraft parts that were exported were advertised by Interaero on the Inventory Locator Service (www.ilssmart.com), a subscription computer database on which aircraft parts suppliers advertise the parts they can supply. In the indictment, the U.S. Government alleged that Interaero knew it was dealing with a buyer from China and was also aware that the Chinese buyer intended to sell the parts to Iran.

Under the plea agreement, Interaero has agreed to pay a criminal fine of $500,000 and receive five years of corporate probation. Interaero is scheduled to be sentenced on October 26, 2004. Neither Hale nor any other Interaero employee was prosecuted.

This conviction is the eleventh conviction resulting from an undercover investigation that targeted aircraft parts suppliers that sell defense articles and military parts over the Internet to foreign buyers without obtaining export licenses or complying with the arms embargoes.