Legal trouble for defence, drone companies

Defence company Raytheon has been slammed with a billion-dollar fine while Sweden’s Saab has been served a subpoena by the U.S. Department of Justice. But China’s well-known consumer and commercial drone manufacturer DJI has filed a lawsuit against the U.S. Department of Defense for adding it to a Pentagon list of Chinese military companies.

Drone Wars

DJI, which is the world’s largest drone company, has said in its lawsuit that it is neither owned or controlled by the Chinese military. The company said it has ‘lost business deals, been stigmatised as a national security threat and been banned from contracting with multiple federal government agencies,’ because of what it called the Defense Department’s ‘unlawful and misguided decision.’

The company has been increasingly viewed with suspicion in the United States over security risks, with the U.S. Army stopping the use of DJI drones, and with the company being added to the U.S. Department of Commerce Entities List, which bans U.S. companies from exporting technologies to it, for alleged involvement in human-rights abuses in China.

DJI has also been added to a U.S. Treasury list of companies that are part of the Chinese military-industrial complex. If that weren’t enough, U.S. Customs have also recently blocked the entry of DJI drones for alleged violations of the Uyghur Forced Labour Prevention Act, which is intended to prevent U.S. dollars being used to fund forced labour in China’s Xinjiang region. DJI says it does not manufacture anything in Xinjiang.

DJI’s drones have become very common in conflict zones like Ukraine for surveillance and for the ease with which they are capable of being jerry-rigged with munitions payloads for strikes on adversaries.

Retaliation?

In possibly unrelated news, China has imposed sanctions on the largest U.S. commercial drone manufacturer, Skydio for selling drones in Taiwan. Skydio supplies UAVs to Taiwan’s national fire service, and its drones are powered by batteries from China, supplies of which have been cut off by the sanctions. Ukraine has asked for thousands of Skydio’s X10 drones, orders for which will be impacted by the new sanctions.

Raytheon Fine

U.S. defence company Raytheon has agreed to pay a fine amounting to almost a billion dollars after agreeing to deferred prosecution agreements with the U.S. Department of Justice.

The company, part of RTX Corporation, has agreed to pay more than 950 million dollars to settle allegations that it defrauded the U.S. government with inflated billing and paid bribes to get business in the Emirate of Qatar.

Raytheon is also alleged to have lied to the U.S. government about the costs involved for three Patriot air defence system batteries, with prosecutors alleging the company overcharged the U.S. government by a 100 million dollars.

Raytheon representatives are alleged to have paid bribes to a senior Qatari military official in exchange for advantages in their bid to secure contracts.

The amount includes criminal penalties as well as civil fines.


The company has said the activities under scrutiny took place before the merger between Raytheon and Rockwell Collins in 2020 and that it has taken ‘robust corrective actions’ to address these issues.

Two months back, the company agreed to pay the U.S. state department 200 million dollars over alleged violations of the Foreign Corrupt Practices Act, Arms Export Control Act and International Traffic in Arms Regulations — which included allegations that the company provided classified military aircraft information to China.

Saab Subpoena

In separate news, Swedish defence company Saab said it has received a subpoena from the U.S. Department of Justice, which is asking for information about the sale of 36 Saab Gripen fighters to Brazil in 2014 for $5.4 billion.

Saab added in its statement that ‘Both Brazilian and Swedish authorities have previously investigated parts of the Brazilian fighter procurement process. These investigations were closed without indicating any wrongdoings by Saab.’ Unquote.

Brazilian President Luiz Inacio Lula da Silva reportedly termed the U.S. subpoena, as meddling in the affairs of another country and said the decision to purchase the fighter aircraft had been left to the successor to his earlier term, President Dilma Rouseff.