3D Systems to pay up to $27 million fine for illegal exports to China

3D Systems’ global headquarters, located in Rock Hill, S.C. Photo from CBRE Group.

U.S.-based additive manufacturing company, 3D Systems, has agreed to a $27 million settlement with the federal government for illegally transporting controlled designs of U.S. military electronics and spacecraft to China, the Department of State announced Monday

The Rock Hill, S.C. 3D printing company was fined for “regularly [emailing] design documents, blueprints and other technical specifications” to its Chinese subsidiary office, Quickparts.com, seeking price quotes for services requested from 2012-2018, according to officials from the Commerce Department.

Included in the emails were “controlled design drawings, including those for military electronics as well as those used in the development, production, operation, or repair of spacecraft,” officials said. The company also allegedly exported metal alloy powder – which is controlled for “national security and nuclear nonproliferation reasons” – to China without a license, and exported other controlled design documents to Germany, as well.

“Today’s enforcement action highlights a troubling trend of U.S. companies offshoring 3D printing operations and ignoring the export controls on the technical data sent overseas to facilitate the 3D printing,” said OEE Director John Sonderman.

Officials were notified about the illegal emails after a defense contractor came forward after noticing a price quote indicating that the parts would be manufactured in Asia, Sonderman said. 

A statement from the U.S. Attorney of the Northern District of Texas said 3D Systems agreed to a $20 million settlement with the Department of State, a $4.54 million settlement with the Department of Justice and a $2.77 million settlement with the Department of Commerce.

Export Control Laws prohibit certain classified items from being exported to certain foreign countries, including China, without a license or prior authorization from certain federal agencies, the U.S. Attorney’s office said. 

In a statement given to Reuters, 3D Systems said: “The company is pleased to have reached a settlement with the agencies and remains committed to continuing to enhance its export controls program.”

In June 2022, the Commerce Department announced it had frozen the export privileges of three U.S. companies based in Wilmington, N.C. – Quicksilver Manufacturing, Rapid Cut and U.S. Prototype – for illegally exporting technical drawings used to 3D print satellites, rockets and other defense-related equipment.