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US Imposes Sanctions on Chinese, Indian Companies for Violating Anti-Proliferation Laws - 2002-07-20

The Bush administration is imposing sanctions on ten foreign companies and individuals, nine of them Chinese and one Indian, for violating U.S. laws aimed at preventing the spread of weapons of mass destruction. It is the fourth time in less than a year that such penalties have been imposed on Chinese entities.

The names of the companies and individuals being penalized were not disclosed by the State Department, which said Congress had to be notified first. But the entities involved will be barred from doing business with the U.S. government, and from buying U.S. military equipment or so-called "dual use" technology, for up to two years.

A senior official who spoke to reporters on condition of anonymity said the sanctions were being applied to nine Chinese firms or individuals, along with a corporate officer of an Indian company. He said some of the Chinese entities were already subject to U.S. penalties because of previous violations.

The State Department also did not list the purchasers of the sensitive goods and technology, but most or all of the transfers in question are understood to have gone to Iran.

It was the fourth time since last September that Chinese entities have been penalized for violating U.S. anti-proliferation laws. At a briefing here, State Department spokesman Richard Boucher declined to say if the latest action was accompanied by a U.S. protest to Beijing. But he said the proliferation issue is always high on the agenda in the Bush administration's contacts with China.

"There have been continuing discussions. It is an on-going issue. It is an issue that we raise when we talk to the Chinese," Mr. Boucher said. "Non-proliferation is one of the most important issues on our agenda. It's been raised at the highest levels of our government. And it is raised regularly by our embassy."

The Chinese government has long maintained it is committed to non-proliferation and has dismissed past anti-proliferation actions against its companies by the United States as unwarranted.

The new U.S. sanctions are being invoked under two laws from Congress: the 1992 Iran-Iraq Arms Proliferation Act, and the 1991 Chemical and Biological Weapons Control Act which bans exports of materials that could be used to build such weapons to countries listed by the State Department as state supporters of terrorism.