Image caption The company's guards were also accused of being trigger happy in Iraq

The security firm formerly known as Blackwater has agreed to pay a $7.5m (£4.8m) fine to settle US federal charges related to arms trafficking.

The US Justice Department said the deal would cover 17 "violations" by the company, now called Academi LLC.

The offences include illegal possession of arms and unauthorised sales of training and equipment abroad.

The deal ends a case against the firm, which held US security contracts worth billions in Iraq and Afghanistan.

The case covers possession of unregistered automatic weapons in the US, unauthorised sales of satellite phones in Sudan and illegal export of body armour, among other things.

The move means that Academi will not face prosecution over the violations as long as it meets auditing requirements and complies with export restrictions.

The firm was a target of intense international scrutiny over its activities in Iraq.

In 2004, four of its security guards were ambushed, shot, beaten and burned to death in the flashpoint city of Falluja. Two of their bodies were hung from a bridge in an act which shocked the United States and triggered an assault on the city.

The firm was accused of exposing them to high risk without proper protection.

In January, families of the four guards settled a long-running lawsuit with the company. The details of the deal have not been released.