International eDiscovery: United Technologies Corporation Pays Big Fines for Breaching Blocking Statute.

International eDiscovery: United Technologies Corporation Pays Big Fines for Breaching Blocking Statute.

Author: Eric Everson, MBA, MSIT-SE (Juris Doctorate Candidate, May 2013)

Today from Bridgeport, Connecticut US-based United Technologies Corporations (UTC) plead guilty 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. 

As a matter if International Electronic Discovery (eDiscovery), blocking statutes are laws enacted in one jurisdiction to obstruct the local (extra jurisdictional) application of a law enacted from another jurisdiction.  The nature of blocking statues is that they prevent the disclosure of certain kinds of information from being leaked from its country of origin.  Many countries apply these statutes (including America) and most countries use national security as their legislative intent in passing such laws.

Blocking statutes as applied in this case make sharing certain information a criminal act.  Here UTC violated a U.S. blocking statute (likely a violation of the U.S Commerce Control List – 15 CFR Part 774).  One of the great hurdles of International eDiscovery stems from production requests that may include such confidential information. 

As demonstrated by the more than $75 million in fines in connection with the export violations (and for providing misleading information to the U.S. government), violations of blocking statutes can carry stiff penalties.  Counsel for technology companies should be especially cautious with regard to export contracts and should consider an Export Addendum when drafting agreements.  This case arose from the international transaction between UTC and the Chinese government which subjects this cause to extensive International eDiscovery.  

#eDiscovery

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About the Author:  Eric Everson is a 3L law student at Florida A&M University – College of Law.  Prior to law school he earned an MBA and Masters in Software Engineering while he tenured ten years of executive leadership in the U.S. telecommunications industry.  The views and opinions presented in this blog are his own and are not to be construed as legal advice.  Eric Everson currently serves on the Board of Governors for The Florida Bar Young Lawyers Division Law Student Division and is the President of the Electronic Discovery Law Student Association at Florida A&M University – College of Law.  Follow @IntleDiscovery