One F-35 Canopy, Three Legal Systems

F-35 parts bound from Australia to the US for repair ended up in Hong Kong. How one crate crossed three export-control regimes, and which records can trace it.

Thomas Rossi
Sep 23, 2026

TL;DR

  • Unserviceable F-35 parts, including a stealth-coated canopy, left Australia for repair in the US and ended up in Hong Kong. The Pentagon says it is working to retrieve them. Nobody has said publicly where they are.
  • The Pentagon owns the pooled spares, Lockheed Martin keeps the records, and an unnamed intermediary moved the crate. GAO found in 2023 that the programme office does not enter these parts into an accountable property system.
  • The route crossed three regimes: a licence-free AUKUS exemption limited to the three countries' territories, a US policy of denial that treats Hong Kong as China, and Hong Kong's own licensing of military aircraft components in transhipment.
  • Lawful seizure, a process failure and theft all look the same from outside. The answer is in the intermediary's bookings, the air waybills and the terminal logs, not in the owner's property records.

Earlier this year a shipment of unserviceable F-35 parts left Australia for repair in the United States. It was meant to be flown. It ended up in Hong Kong, and nobody has said publicly where it is now.

Politico broke the story on 18 September, citing three people familiar with the matter. The Pentagon's F-35 Joint Program Office confirmed it was "aware of a shipment issue of unserviceable F-35 Lightning II components" and said it was working "to retrieve these components, investigate the incident, and place safeguards to avoid a future occurrence." On 22 September Australia's Defence Minister, Richard Marles, confirmed that Australia is helping with the investigation, while saying his understanding is that "we're not talking about sensitive equipment here, or sensitive parts."

According to two of Politico's sources, the shipment included a canopy: the acrylic bubble over the cockpit, coated with a thin layer of transparent radar-absorbent material. That coating degrades over time, so canopies get repaired or replaced. Australia flies 72 F-35s. There are Australian maintenance depots for the jet, but none of them can yet repair canopies. A worn canopy therefore has to leave the country.

Most of the coverage asks whether China now has it. The public record cannot answer that. FreightWaves put it plainly: there is no public indication that Chinese authorities or the Chinese military have obtained the parts. Anyone who moves controlled goods for a living can learn more from a second question. How does a crate travelling between two allies end up in the one place both of their rulebooks are built to keep it out of? And which record would have shown that happening?

Who owned it, who counted it, who moved it

The F-35 programme runs a shared pool of spare parts stored around the world. The US Defense Department owns a part until it is installed on a jet. Lockheed Martin manages the pool and does the accounting. A 2023 Government Accountability Office report quoted by Politico is blunt about what that means: "The F-35 Joint Program Office does not track or enter these spare parts into an accountable property system of record that would enable it to capture and store real-time changes to property records. The prime contractors maintain this information." The same report found that more than 1 million F-35 spare parts had gone missing over the previous five years.

The physical movement sits with a third party again. Lockheed uses commercial shipping providers. For this shipment Politico describes "an intermediary" transporting the parts on Lockheed's behalf, and ABC calls it a "third company." Australian Defence Magazine notes that the provider has not been identified. Lockheed says it cannot discuss specific shipments "for security reasons" and that it follows all US regulations on shipping aircraft components.

Ownership, record-keeping and physical custody therefore sit with three different organisations, and the one that actually had the crate in hand is the one nobody has named.

One crate, three legal systems

What makes this more than a lost-parts story is that the route passed through three different legal regimes, and each one sees the same crate differently.

Between Australia and the United States, the trend is towards fewer licences. Since 1 September 2024, the ITAR § 126.7 exemption has allowed licence-free defence trade among Australia, the United Kingdom and the United States. The State Department describes "the vast majority" of commercial defence trade between the three countries as eligible. The exemption has a geographic condition: "transfers must be to or within the physical territories of Australia, the United Kingdom, and the United States." Public reporting does not say which authorisation this shipment moved under. Government-owned spares may well travel on different paperwork. But the direction of travel matters. A licence is also a record, held by a government, that names the parties and the destination. Removing licences speeds up trade between allies, and it also removes that record.

Under US rules, Hong Kong is not a waypoint. It counts as China. On 15 July 2020 the State Department's Directorate of Defense Trade Controls said that "Hong Kong is now considered to be included in the entry for China under ITAR section 126.1(d)(1)", which carries "a policy of denial for all transfers subject to the ITAR." When the Commerce Department made the same change on the dual-use side that December, it gave the reason in one sentence: the US Government "can no longer distinguish between the export of controlled items to Hong Kong and the PRC." That is why the word "Hong Kong" in this story matters more than a missed connection normally would.

Under Hong Kong's own law, the crate is a strategic commodity. Hong Kong's Import and Export (Strategic Commodities) Regulations, Cap. 60G, include a munitions list. Its entry ML10 covers aircraft "specially designed or modified for military use" and "specially designed components" for them. On its face, that describes an F-35 canopy. Hong Kong Customs states that a licence "is required for the import / export / re-export / transshipment of every shipment of strategic commodities." Registered airlines and cargo operators can use an exemption scheme for air transhipment cargo, but only for goods that "remain within the confines of the cargo transhipment area" while they wait for an onward flight, and only for items outside Schedule 2, the most sensitive munitions category. For offending goods that are seized, the Customs page lists "mandatory forfeiture."

Put those three together. On a route that included Hong Kong, a crate could move under a licence-free regime at one end, reach a place where the other end's policy is denial, and fall under a third jurisdiction's licensing law at the transfer point. Each regime is coherent on its own terms, but not one of them follows the crate from one end of the route to the other.

"Diverted" is doing a lot of work

Politico says the shipment was "rerouted as it transited the Pacific Ocean from Australia." ABC reports that the components "were meant to be flown to the United States."

"Diverted" invites a picture of an aircraft changing course in mid-air. With air freight, there is a more ordinary reading. Long-haul cargo mostly moves hub-and-spoke. A forwarder books a destination, the carrier's network chooses the hubs, and a freighter from Australia to North America can connect through an Asian hub as a normal part of the product being sold. On that reading, the Hong Kong stop may have been in the routing from the start, and it would have looked unremarkable in a booking system. Public reporting does not say which reading is true, and we are not asserting either one. But the second one is the everyday case, and it is where the controls above are weakest.

Transhipment also takes time. Cargo is unloaded, broken down, held in a terminal and then built up again onto the onward aircraft. For as long as the crate sits in that terminal, whether hours or days, it is in someone else's warehouse and under someone else's law.

Same mechanics, three different endings

Seen from outside, a crate that stops at a hub can mean several very different things, and all of them use the same mechanics:

  • Lawful action. Hong Kong Customs holds or seizes a strategic commodity that is moving without the licence Hong Kong law requires, which is exactly what that law provides for. Or the owner, or the US, tells the carrier to hold the cargo.
  • Process failure. The crate is sorted onto the wrong onward load, mislaid in storage, or sent back towards origin.
  • Crime. Theft, an insider at a terminal or forwarder, or a targeted acquisition.

FreightWaves summarised the state of knowledge: it remains unclear "whether it was a mistake or an unauthorized act." ABC describes the parts as "mistakenly diverted." Nobody has published evidence for any single one of these endings, and this piece does not pick one.

The legal and illegal versions share the same machinery: an intermediary chosen by contract, a hub picked by the network, a transfer period in a bonded area. That is exactly why US export control stopped treating Hong Kong separately in 2020. The worry in the Federal Register was that controlled items would be "illegally diverted" through it. From the outside, an honest routing failure and a deliberate abuse of the same route are hard to tell apart until someone reads the shipping documents.

Where the answer lives

Everyone involved has something reassuring to say. Lockheed follows all US regulations. Australia's Defence Department says it "maintains a robust export control regime." An analyst quoted by ABC says "Defence will have sufficient visibility to conduct a proper investigation." All of that can be true, because each of those controls answers for its own part of the route, and the route passed through a place none of them governs.

The investigation now has to work in order. When did Hong Kong first appear in this shipment's routing: in the booking, at the hub, or after arrival? The answer will not come from the owner's property records, because the owner does not keep them. It will come from the intermediary's bookings, the air waybills, and the terminal's handling logs. Those records, kept separately by companies that were each doing only their own part, are the only ones that show where the crate actually went.

References

Image: A Royal Australian Air Force F-35A pilot in the cockpit during Black Flag 22-1 at Nellis Air Force Base, May 2022. U.S. Air Force photo by William R. Lewis, public domain, via Wikimedia Commons.

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