Hughes Electronics [NYSE: GMH] and Boeing Satellite Systems, formerly Hughes Space and Communication Co., reached a $32 million settlement with the U.S. Department of State involving claims of technology transfer from two failed launches of commercial communications satellites on Chinese rockets in 1995 and 1996.

The State Department charged that violations of the Arms Export Control Act had occurred when Boeing Satellite Systems operated as Hughes Space and Communications. In October 2000 Hughes sold its satellite-manufacturing unit to Boeing, which took responsibility for resolving HSC pre-acquisition export matters.

The consent agreement between the companies and the State Department calls for payment of a civil penalty of $32 million, including $4 million credited to the companies for their past expenditures on export program enhancements and $8 million to be invested by Hughes and Boeing to enhance their compliance programs. The $20 million cash portion of the penalty is to be paid in eight equal installments over the next seven years, according to the consent decree.