However, the source said, the companies ultimately were cut out of China’s civilian helicopter market when the Chinese chose to buy from other manufacturers.
United Technologies said it accepted responsibility for the past violations and regretted them. The company said it had spent $30 million to investigate and fix export control procedures throughout the company, and hired more than 1,000 full and part-time employees to address the issue. Officials said they were determined to have “best-in-class compliance” going forward.
Jay DeFrank, a spokesman for Pratt & Whitney Canada, said the company continued to do business in China.
“China is and remains an important market for UTC and we will continue to do business there in full compliance with the law,” he said. United Technologies said it had put money aside to cover more than $75 million in settlement payments.
Western experts said the Z-10 is developing into one of the world’s most modern and capable combat helicopters. Full production of the Z-10 powered by Pratt & Whitney Canada engines would give Chinese military forces unprecedented levels of “aerial artillery” to support any amphibious invasion and subsequent operations against Taiwan, which Beijing claims as its own, according to Richard Fisher, an expert on China’s military application of so-called dual-use technologies.
PROGRAM DATES TO 1990s
U.S. authorities said China had been trying to develop a specialized modern military attack helicopter since the 1980s. But since the Chinese government’s 1989 crackdown on the pro-democracy movement, the U.S. government has prohibited the export to China of U.S. defense equipment and technology.
Beginning in the 1990s, a U.S. official said, China began an effort to develop a military attack helicopter but under the guise of a civilian helicopter program. The program culminated in the Z-10 attack helicopter, which is in production today, the official said.
Initial batches of the aircraft were delivered to China’s People’s Liberation Army beginning in 2009. The helicopters’ primary use would be for attacking armor and battlefield operations but it also has limited air-to-air combat capabilities.