Chinese Nationals Convicted of Illegally Exporting ITAR-Controlled Items to China
05/17/10 12:28 PM
On May
17, 2010, Bureau of Industry and Security
(BIS) announced that a federal
jury in Massachusetts convicted Chinese
nationals Zhen Zhou Wu (Wu) and Yufeng Wei (Wei)
of conspiracy to violate U.S. export laws and
illegally exporting electronic equipment from
the U.S. to China on numerous occasions from
2004 to 2007.
Evidence presented at trial showed that between April 2004 and June 2006 Wu and Wei illegally exported military electronic components, designated on the U.S. Munitions List (USML), to mainland China via Hong Kong. The defense articles that defendants exported are primarily used in military phased array radar, electronic warfare, military guidance systems, and military satellite communications.
Also indicted was Chitron Electronics, Inc. (Chitron), a company created by Wu. Using Chitron, Wu targeted Chinese military factories and research institutes as customers of Chitron, including numerous institutes of the China Electronics Technology Group Corporation, which is responsible for the procurement, development, and manufacture of electronics for the Chinese military.
Based on the correspondence, Wu, Wei and other Chitron employees knew that exports of restricted parts were being shipped to Chinese customers without required export licenses. Wu instructed Wei and Chitron employees to never tell U.S. companies that parts were being exported overseas. Instead, U.S. companies were told to ship all ordered products to the Chitron office located in Waltham, Massachusetts. Upon receiving the products, Chitron employees forwarded them to Chitron’s Shenzhen office using freight forwarders in Hong Kong. The shipments were done without the requisite Department of State and Department of Commerce export licenses.
Wu and Wei both face up to 20 years imprisonment to be followed by three years supervised release and a $1 million fine. After serving their sentence, both will face deportation to China.
Chitron faces up to a $1 million fine for each count in the indictment charging them with illegal export of U.S. Munitions List items and $500,000 for each count in the indictment charging them with illegal export of Commerce controlled electronics. Sentencing is scheduled for August 17, 2010.
Evidence presented at trial showed that between April 2004 and June 2006 Wu and Wei illegally exported military electronic components, designated on the U.S. Munitions List (USML), to mainland China via Hong Kong. The defense articles that defendants exported are primarily used in military phased array radar, electronic warfare, military guidance systems, and military satellite communications.
Also indicted was Chitron Electronics, Inc. (Chitron), a company created by Wu. Using Chitron, Wu targeted Chinese military factories and research institutes as customers of Chitron, including numerous institutes of the China Electronics Technology Group Corporation, which is responsible for the procurement, development, and manufacture of electronics for the Chinese military.
Based on the correspondence, Wu, Wei and other Chitron employees knew that exports of restricted parts were being shipped to Chinese customers without required export licenses. Wu instructed Wei and Chitron employees to never tell U.S. companies that parts were being exported overseas. Instead, U.S. companies were told to ship all ordered products to the Chitron office located in Waltham, Massachusetts. Upon receiving the products, Chitron employees forwarded them to Chitron’s Shenzhen office using freight forwarders in Hong Kong. The shipments were done without the requisite Department of State and Department of Commerce export licenses.
Wu and Wei both face up to 20 years imprisonment to be followed by three years supervised release and a $1 million fine. After serving their sentence, both will face deportation to China.
Chitron faces up to a $1 million fine for each count in the indictment charging them with illegal export of U.S. Munitions List items and $500,000 for each count in the indictment charging them with illegal export of Commerce controlled electronics. Sentencing is scheduled for August 17, 2010.
Western Companies Face Obstacles to Doing Business in China Chinese Communist Party has a long history of monitoring dissidents and limiting freedom of expression. The sales of foreign movies, books, and music has long been restricted, even though a World Trade Organization (WTO) ruling in August 2009 held that these policies violate China’s legally binding commitments to the international trade system. China appealed the ruling, but in the meantime sought to strengthen its domestic encryption industry: the government has all the decryption codes but is withholding the government certifications that foreign-owned companies need to sell their products on Chinese market. Google’s reaction to operation obstacles in China reflects general foreign business sentiment, which is said to be pessimistic and full of unpredictability. The long-standing general consensus that no one can afford not to be in China, is being questioned as a result of the government’s attitude toward multinationals. Chinese business environment has always been difficult for foreign companies. For a long time, they have been complaining of being cheated by joint venture partners who go on to set up parallel businesses or disappear with venture’s assets. In addition, government policies have always protected Chinese companies from international competition by allowing them to grow in a large market to prepare for exporting to less-protected foreign markets. While many other countries have policies that favor domestic companies, they operate under relatively strict WTO controls. When China joined WTO in 2001, it promised to quickly negotiate joining WTO’s agreement on free trade in government procurement, but it has never actually done so. As a result, China follows its own buy-Chinese government procurement policy and uses its enormous buying power to direct the contracts to Chinese companies. On June 4, 2009, China’s National Development and Reform Commission, the top economic planning agency in the country, issued an order that mandates national, provincial and local government agencies to buy only Chinese-made products as part of the country’s $600 billion economic stimulus plan. Foreign substitutes may be purchased only when no suitable Chinese products are available. On the exports side, China has imposed restrictions on mineral exports, for which it mines a large part of the world’s supply. Due to these export restrictions which include high export tariffs, tonnage quotas and even export bans, many manufacturers choose to locate their factories in China to ensure they have a supply of raw materials free from export taxes. The U.S. and the EU have filed a WTO case in June 2009 challenging China’s export restrictions on zinc and bauxite, but China has denied any wrongdoing. With respect to intellectual property, Western companies have suffered great damages from China’s weak protection of patents and trademarks, as a result of which large industries make goods in direct competition with Western competitors but are spared any significant marketing or research expenditures. To fight the counterfeiting, many Western companies are trying to respond by limiting the intellectual property transferred to China. Despite all these concerns, companies are unwilling to leave a market as big as China. For Google and other companies whose primary assets lay in intellectual property, the concept of staying in China is more complex since they risk losing those assets. But then again, China’s market is so large and competitive that many Western companies offer their latest technology in fear of losing market share. In auto sector, China has developed the world’s largest market, but foreign auto manufacturers are limited to a 50% stake in auto assembly plants, and are assessed high tariffs on imported cars. Chinese joint venture partners in auto industry are now starting to produce their own models, developed and built almost exclusively for China. Similar policies have been introduced forcing international companies to transfer their best technology in industries such as railroad locomotive manufacturing and aircraft assembly. China has also tried to give market preference to domestic companies that invest in developing their own technology, even if that technology is initially inferior to foreign technology. In November of last year, Chinese government notified both domestic and foreign companies that the government will give preference to products that use technology developed in China and carry trademarks that were first registered in China
01/14/10 10:42 PM
On
January 14, 2010, The New York Times
reported on difficult
business conditions in China for Western
companies. Companies have complained that they
are subjected to a long list of obstacles to
doing business in China, including “buy Chinese”
government procurement policies, increasing
restrictions on foreign investments, and
widespread violations of intellectual property
rights.
The obstacles are said to be a result of China’s desire to control internal dissent efforts and to successfully compete in international markets. In protest to these policies many call discriminating, Google has threatened to pull out of the country. In mid-January, Google complained about attacks on its computers that originated in China and stated it was no longer willing to censor its Chinese site’s search results.
Chinese Communist Party has a long history of monitoring dissidents and limiting freedom of expression. The sales of foreign movies, books, and music has long been restricted, even though a World Trade Organization (WTO) ruling in August 2009 held that these policies violate China’s legally binding commitments to the international trade system. China appealed the ruling, but in the meantime sought to strengthen its domestic encryption industry: the government has all the decryption codes but is withholding the government certifications that foreign-owned companies need to sell their products on Chinese market.
Google’s reaction to operation obstacles in China reflects general foreign business sentiment, which is said to be pessimistic and full of unpredictability. The long-standing general consensus that no one can afford not to be in China, is being questioned as a result of the government’s attitude toward multinationals.
Chinese business environment has always been difficult for foreign companies. For a long time, they have been complaining of being cheated by joint venture partners who go on to set up parallel businesses or disappear with venture’s assets.
In addition, government policies have always protected Chinese companies from international competition by allowing them to grow in a large market to prepare for exporting to less-protected foreign markets.
While many other countries have policies that favor domestic companies, they operate under relatively strict WTO controls. When China joined WTO in 2001, it promised to quickly negotiate joining WTO’s agreement on free trade in government procurement, but it has never actually done so. As a result, China follows its own buy-Chinese government procurement policy and uses its enormous buying power to direct the contracts to Chinese companies. On June 4, 2009, China’s National Development and Reform Commission, the top economic planning agency in the country, issued an order that mandates national, provincial and local government agencies to buy only Chinese-made products as part of the country’s $600 billion economic stimulus plan. Foreign substitutes may be purchased only when no suitable Chinese products are available.
On the export side, China has imposed restrictions on mineral exports, for which it mines a large part of the world’s supply. Due to these export restrictions which include high export tariffs, tonnage quotas and even export bans, many manufacturers choose to locate their factories in China to ensure they have a supply of raw materials free from export taxes. The U.S. and the EU have filed a WTO case in June 2009 challenging China’s export restrictions on zinc and bauxite, but China has denied any wrongdoing.
With respect to intellectual property, Western companies have suffered great damages from China’s weak protection of patents and trademarks, as a result of which large industries make goods in direct competition with Western competitors but are spared any significant marketing or research expenditures. To fight the counterfeiting, many Western companies are trying to respond by limiting the intellectual property transferred to China.
Despite all these concerns, companies are unwilling to leave a market as big as China. For Google and other companies whose primary assets lay in intellectual property, the concept of staying in China is more complex since they risk losing those assets. But then again, China’s market is so large and competitive that many Western companies offer their latest technology in fear of losing market share.
In auto sector, China has developed the world’s largest market, but foreign auto manufacturers are limited to a 50% stake in auto assembly plants, and are assessed high tariffs on imported cars. Chinese joint venture partners in auto industry are now starting to produce their own models, developed and built almost exclusively for China.
Similar policies have been introduced forcing international companies to transfer their best technology in industries such as railroad locomotive manufacturing and aircraft assembly. China has also tried to give market preference to domestic companies that invest in developing their own technology, even if that technology is initially inferior to foreign technology.
In November of last year, Chinese government notified both domestic and foreign companies that the government will give preference to products that use technology developed in China and carry trademarks that were first registered in China. This last step led to a strongly worded letter of protest by 34 industry associations to China’s Ministry of Commerce.
The obstacles are said to be a result of China’s desire to control internal dissent efforts and to successfully compete in international markets. In protest to these policies many call discriminating, Google has threatened to pull out of the country. In mid-January, Google complained about attacks on its computers that originated in China and stated it was no longer willing to censor its Chinese site’s search results.
Chinese Communist Party has a long history of monitoring dissidents and limiting freedom of expression. The sales of foreign movies, books, and music has long been restricted, even though a World Trade Organization (WTO) ruling in August 2009 held that these policies violate China’s legally binding commitments to the international trade system. China appealed the ruling, but in the meantime sought to strengthen its domestic encryption industry: the government has all the decryption codes but is withholding the government certifications that foreign-owned companies need to sell their products on Chinese market.
Google’s reaction to operation obstacles in China reflects general foreign business sentiment, which is said to be pessimistic and full of unpredictability. The long-standing general consensus that no one can afford not to be in China, is being questioned as a result of the government’s attitude toward multinationals.
Chinese business environment has always been difficult for foreign companies. For a long time, they have been complaining of being cheated by joint venture partners who go on to set up parallel businesses or disappear with venture’s assets.
In addition, government policies have always protected Chinese companies from international competition by allowing them to grow in a large market to prepare for exporting to less-protected foreign markets.
While many other countries have policies that favor domestic companies, they operate under relatively strict WTO controls. When China joined WTO in 2001, it promised to quickly negotiate joining WTO’s agreement on free trade in government procurement, but it has never actually done so. As a result, China follows its own buy-Chinese government procurement policy and uses its enormous buying power to direct the contracts to Chinese companies. On June 4, 2009, China’s National Development and Reform Commission, the top economic planning agency in the country, issued an order that mandates national, provincial and local government agencies to buy only Chinese-made products as part of the country’s $600 billion economic stimulus plan. Foreign substitutes may be purchased only when no suitable Chinese products are available.
On the export side, China has imposed restrictions on mineral exports, for which it mines a large part of the world’s supply. Due to these export restrictions which include high export tariffs, tonnage quotas and even export bans, many manufacturers choose to locate their factories in China to ensure they have a supply of raw materials free from export taxes. The U.S. and the EU have filed a WTO case in June 2009 challenging China’s export restrictions on zinc and bauxite, but China has denied any wrongdoing.
With respect to intellectual property, Western companies have suffered great damages from China’s weak protection of patents and trademarks, as a result of which large industries make goods in direct competition with Western competitors but are spared any significant marketing or research expenditures. To fight the counterfeiting, many Western companies are trying to respond by limiting the intellectual property transferred to China.
Despite all these concerns, companies are unwilling to leave a market as big as China. For Google and other companies whose primary assets lay in intellectual property, the concept of staying in China is more complex since they risk losing those assets. But then again, China’s market is so large and competitive that many Western companies offer their latest technology in fear of losing market share.
In auto sector, China has developed the world’s largest market, but foreign auto manufacturers are limited to a 50% stake in auto assembly plants, and are assessed high tariffs on imported cars. Chinese joint venture partners in auto industry are now starting to produce their own models, developed and built almost exclusively for China.
Similar policies have been introduced forcing international companies to transfer their best technology in industries such as railroad locomotive manufacturing and aircraft assembly. China has also tried to give market preference to domestic companies that invest in developing their own technology, even if that technology is initially inferior to foreign technology.
In November of last year, Chinese government notified both domestic and foreign companies that the government will give preference to products that use technology developed in China and carry trademarks that were first registered in China. This last step led to a strongly worded letter of protest by 34 industry associations to China’s Ministry of Commerce.
China Won’t Require Green Dam Censorship Software on Home and Business Computers
08/14/09 08:52 PM
On
August 13, 2009, the Minister of the Chinese
Ministry of Industry and Information Technology
(MIIT), Li Yizhong, announced at a press
conference that the government's Green Dam
computer software mandate was "not thoughtful
enough" and that the use of the software
developed to filter out online pornography would
"depend on consumers."
The minister admitted that "[t]he choice of words in the directive was not clear enough, which led to people's misunderstanding of why the Green Dam software was ordered to be available on all computers" and that the government’s intent had always been for the software to be “included” with PCs sold in China and not “pre-installed” into the computers. However, the minister added that the software will be installed on computers in schools, Internet cafes and in other public places.
The China Daily reported that the China “softens its stance” on Green Dam Filter due to consumer voices and that there were protests from foreign computer manufacturers, twenty-two international chambers of commerce and the US government over the mandate before Green Dam was postponed. Previous information on the Green Dam censoring software in China including U.S. government’s reaction can be accessed here.
The minister admitted that "[t]he choice of words in the directive was not clear enough, which led to people's misunderstanding of why the Green Dam software was ordered to be available on all computers" and that the government’s intent had always been for the software to be “included” with PCs sold in China and not “pre-installed” into the computers. However, the minister added that the software will be installed on computers in schools, Internet cafes and in other public places.
The China Daily reported that the China “softens its stance” on Green Dam Filter due to consumer voices and that there were protests from foreign computer manufacturers, twenty-two international chambers of commerce and the US government over the mandate before Green Dam was postponed. Previous information on the Green Dam censoring software in China including U.S. government’s reaction can be accessed here.
China Indefinitely Postpones A Gov't Mandate Requiring Content-Filtering Software for All Computers Produced and Sold in China
06/30/09 09:02 PM
On June 30, 2009, China state media announced that
it would indefinitely postpone a mandate that would
require all computers produced and sold in China to
come pre-installed with a specific
content-filtering software known as “Green
Dam-Youth Escort.” The Green Dam mandate was due to
take effect on July 1, 2009.
On June 24, 2009, the U.S. Secretary of Commerce Gary Locke and the U.S. Trade Representative Ron Kirk sent a joint letter to their counterparts in China's Ministry of Industry and Information Technology (MIIT) and Ministry of Commerce (MOFCOM) urging China to revoke the proposed Green Dam rule (Circular 226).
More information on this issue can be found on CNN.com here or on the New York Times’ website here.
On June 24, 2009, the U.S. Secretary of Commerce Gary Locke and the U.S. Trade Representative Ron Kirk sent a joint letter to their counterparts in China's Ministry of Industry and Information Technology (MIIT) and Ministry of Commerce (MOFCOM) urging China to revoke the proposed Green Dam rule (Circular 226).
More information on this issue can be found on CNN.com here or on the New York Times’ website here.
PRC Revises Customs Enforcement of Intellectual Property Measures
06/30/09 02:08 PM
On July 1, 2009, the revised
Implementing Measures for Customs
Protection of Intellectual
Property
will go into effect in China.
Updated in March 2009, the revised measures enable intellectual property (IP) owners to settle disputes with consignors and consignees after the seizure but before the penalty decision in a case is issued. Because the resolution of IP infringement cases by Chinese customs can take months and even years and infringers are rarely willing to disclose the source of the goods, it is expected that the new settlement provisions will provide a helpful tool to IP rights holders to obtain information on the true identity of the sellers and buyers of the goods.
The new rules allow IP holders to withdraw an IP rights enforcement complaint only when the owners submit to customs a copy of the settlement agreement and an application for the withdrawal of the complaint. Upon receipt of the settlement agreement, Chinese Customs will be able to terminate its investigation except in cases where a criminal offense is suspected.
The new regulations adopt China’s General Administration of Customs (GAC) and the Ministry of Public Security (MPS) rules that require transfer of suspected criminal cases to Chinese police (PSB). As stated by both China’s Supreme People’s Court and Supreme People’s Procuratorate, counterfeiting may be deemed a criminal offense where the case value in question exceeds RMB50,000, or about $7,300.
The updated regulations impose a 10-day deadline for the GAC to issue a decision on whether an application of customs recordal will be renewed, and permits the GAC to cancel recordals in cases whether an IP rights holder has failed to update its recordal in a timely fashion.
Under the new notificaton provisions, Chinese Customs are no longer required to first notify the IP owner upon detecting a shipment suspected to infringe IP rights, and instead will have discretion to approach the consignor or consignee of the goods for proof that IP was used with the owner’s permission.
The new regulations also require Chinese Customs to obtain the IP rights holder’s permission prior to auctioning off the infringing goods.
Finally, the new regulations adopt the GAC’s May 2006 provisions that permit the trademark owners experiencing high levels of infringement to provide to customs a renewable guarantee, calculated as the total costs of warehousing and handling fees paid for customs in the prior year, set at a minimum of RMB200,000, instead of paying a customs bonds in every case.
Updated in March 2009, the revised measures enable intellectual property (IP) owners to settle disputes with consignors and consignees after the seizure but before the penalty decision in a case is issued. Because the resolution of IP infringement cases by Chinese customs can take months and even years and infringers are rarely willing to disclose the source of the goods, it is expected that the new settlement provisions will provide a helpful tool to IP rights holders to obtain information on the true identity of the sellers and buyers of the goods.
The new rules allow IP holders to withdraw an IP rights enforcement complaint only when the owners submit to customs a copy of the settlement agreement and an application for the withdrawal of the complaint. Upon receipt of the settlement agreement, Chinese Customs will be able to terminate its investigation except in cases where a criminal offense is suspected.
The new regulations adopt China’s General Administration of Customs (GAC) and the Ministry of Public Security (MPS) rules that require transfer of suspected criminal cases to Chinese police (PSB). As stated by both China’s Supreme People’s Court and Supreme People’s Procuratorate, counterfeiting may be deemed a criminal offense where the case value in question exceeds RMB50,000, or about $7,300.
The updated regulations impose a 10-day deadline for the GAC to issue a decision on whether an application of customs recordal will be renewed, and permits the GAC to cancel recordals in cases whether an IP rights holder has failed to update its recordal in a timely fashion.
Under the new notificaton provisions, Chinese Customs are no longer required to first notify the IP owner upon detecting a shipment suspected to infringe IP rights, and instead will have discretion to approach the consignor or consignee of the goods for proof that IP was used with the owner’s permission.
The new regulations also require Chinese Customs to obtain the IP rights holder’s permission prior to auctioning off the infringing goods.
Finally, the new regulations adopt the GAC’s May 2006 provisions that permit the trademark owners experiencing high levels of infringement to provide to customs a renewable guarantee, calculated as the total costs of warehousing and handling fees paid for customs in the prior year, set at a minimum of RMB200,000, instead of paying a customs bonds in every case.
BIS Approves Additional VEU
05/01/09 09:31 PM
On
April 29, 2009, the Bureau of Industry and Security
(BIS) published a final rule in the Federal
Register, which adds a name to the list of
end-users for the Peoples’ Republic of China
(PRC) approved to receive exports, reexports,
and transfers of certain items under the
authorization Validated End-User (VEU). The rule
also amends the Export Administration
Regulations (EAR) to add and revise eligible
items and destinations for existing VEU
authorizations.
The VEU authorization is a mechanism to facilitate increased high-technology exports to companies in the PRC and India that have a record of using such items responsibly. VEUs may obtain eligible items on the Commerce Control List (CCL) without having to wait for their suppliers to obtain export licenses from BIS. In addition to U.S. exporters, VEU authorization may be used by foreign reexporters, and does not have an expiration date.
The final rule amends Supplement No. 7 to Part 748 of the EAR to identify an additional company with eligible facilities in the PRC as a VEU and to identify the items that may be exported, reexported, or transferred under Authorization VEU. The new entry is for Aviza Technology China and lists Export Control Classification Numbers (ECCNs) 2B230, 3B001.c.1.a. and 3B001.e.
The VEU authorization is a mechanism to facilitate increased high-technology exports to companies in the PRC and India that have a record of using such items responsibly. VEUs may obtain eligible items on the Commerce Control List (CCL) without having to wait for their suppliers to obtain export licenses from BIS. In addition to U.S. exporters, VEU authorization may be used by foreign reexporters, and does not have an expiration date.
The final rule amends Supplement No. 7 to Part 748 of the EAR to identify an additional company with eligible facilities in the PRC as a VEU and to identify the items that may be exported, reexported, or transferred under Authorization VEU. The new entry is for Aviza Technology China and lists Export Control Classification Numbers (ECCNs) 2B230, 3B001.c.1.a. and 3B001.e.
BIS Initiates Foreign Availability Assessment Process for Certain Thermal Imaging Cameras in China
09/04/08 06:29 PM
On
September 2, 2008, the U.S. Department of
Commerce’s Bureau of Industry and Security
(BIS) announced a 90-day study
to assess the foreign availability of uncooled
thermal imaging cameras incorporating
microbolometer focal plane arrays in China.
BIS was required to initiate such assessment after the Sensors and Instrumentation Technical Advisory Committee (SITAC) certified a petition asserting that uncooled thermal imaging cameras were widely availably in China, thus rendering U.S. export controls ineffective. In connection with the petition, SITAC has issued a report detailing the foreign availability of the uncooled thermal imaging cameras in controlled countries.
Part 768 of the Export Administration Regulations (EAR) sets out the procedure associated foreign availability assessment. The Secretary of Commerce has 90 days from the date of initiation to determine whether the thermal imaging cameras are available in China in sufficient quantity, and whether they are of comparable quality to render current U.S. export controls ineffective.
To develop its own recommendation for the Secretary of Commerce consideration, BIS is also seeking information from the public and other U.S. Government agencies on the availability of these cameras in China. Comments from the public must be received by September 17, 2008. Once the Secretary completes the review process, both SITAC and Congress will be notified of the final assessment determination.
If foreign availability is determined, the Department of Commerce may remove the license requirements, unless the President determines that this would be detrimental to national security. The Secretary may also recommend to the President that negotiations be undertaken to eliminate the foreign availability.
The Federal Register notice details methods by which public may submit comments on the matter.
BIS was required to initiate such assessment after the Sensors and Instrumentation Technical Advisory Committee (SITAC) certified a petition asserting that uncooled thermal imaging cameras were widely availably in China, thus rendering U.S. export controls ineffective. In connection with the petition, SITAC has issued a report detailing the foreign availability of the uncooled thermal imaging cameras in controlled countries.
Part 768 of the Export Administration Regulations (EAR) sets out the procedure associated foreign availability assessment. The Secretary of Commerce has 90 days from the date of initiation to determine whether the thermal imaging cameras are available in China in sufficient quantity, and whether they are of comparable quality to render current U.S. export controls ineffective.
To develop its own recommendation for the Secretary of Commerce consideration, BIS is also seeking information from the public and other U.S. Government agencies on the availability of these cameras in China. Comments from the public must be received by September 17, 2008. Once the Secretary completes the review process, both SITAC and Congress will be notified of the final assessment determination.
If foreign availability is determined, the Department of Commerce may remove the license requirements, unless the President determines that this would be detrimental to national security. The Secretary may also recommend to the President that negotiations be undertaken to eliminate the foreign availability.
The Federal Register notice details methods by which public may submit comments on the matter.
New York Times Publishes Article Questioning New China Export Rules
01/03/08 10:34 AM
On
January 2, 2008, the New York Times published a
report entitled, "Eased
Rules on Tech Sales to China
Questioned." The
report states that the Bush administration
"quietly" eased some restrictions on the export
of "politically delicate technologies to China"
six months ago, but are now facing questions
from weapons experts about whether some
equipment could instead end up helping China
modernize its military.
The report states that questions are being raised by a report entitled, In China We Trust, issued by this week by the Wisconsin Project on Nuclear Arms Control, an independent research foundation that opposes the spread of arms technologies. The Wisconsin Project specifically questions the wisdom of BIS' new Validated End User authorization. In October 2007, BIS announced the first five companies approved for VEU authorization.
The report claims that two of the first nonmilitary Chinese companies designated as VEUs are in fact high risk because of their links to the Chinese government, the People's Liberation Army, and other Chinese entities accused in the past of ties to Syria and Iran. One of these Chinese companies, the BHA Aero Composites Company, is partly owned by two American companies - 40 percent by Boeing and 40 percent by the aerospace materials maker Hexcel, with the remaining 20 percent owned by a Chinese government-owned company, AVIC I, or the China Aviation Industry Corporation I.
Gary Milollin, director of the Wisconsin Project, claims that his staff has uncovered several links with the Chinese military establishment involving both BHA and another of the first five VEUs, the Shanghai Hua Hong NEC Electronics Company. The report claims that AVIC I produces fighters, nuclear-capable bombers and aviation weapons systems for the People's Liberation Army and the U.S. State Department has cited another AVIC subsidiary, the China National Aero-Technology Import & Export Corporation, for links to arms sales to Iran and Syria.
The Wisconsin Project report also states that Shanghai Hua Hong NEC Electronics is majority owned "through a corporate chain" by the China Electronics Corporation, which the report says is a government conglomerate that produces military equipment along with consumer electronics. The report claims it has a unit that produces arms for the military.
The report states that questions are being raised by a report entitled, In China We Trust, issued by this week by the Wisconsin Project on Nuclear Arms Control, an independent research foundation that opposes the spread of arms technologies. The Wisconsin Project specifically questions the wisdom of BIS' new Validated End User authorization. In October 2007, BIS announced the first five companies approved for VEU authorization.
The report claims that two of the first nonmilitary Chinese companies designated as VEUs are in fact high risk because of their links to the Chinese government, the People's Liberation Army, and other Chinese entities accused in the past of ties to Syria and Iran. One of these Chinese companies, the BHA Aero Composites Company, is partly owned by two American companies - 40 percent by Boeing and 40 percent by the aerospace materials maker Hexcel, with the remaining 20 percent owned by a Chinese government-owned company, AVIC I, or the China Aviation Industry Corporation I.
Gary Milollin, director of the Wisconsin Project, claims that his staff has uncovered several links with the Chinese military establishment involving both BHA and another of the first five VEUs, the Shanghai Hua Hong NEC Electronics Company. The report claims that AVIC I produces fighters, nuclear-capable bombers and aviation weapons systems for the People's Liberation Army and the U.S. State Department has cited another AVIC subsidiary, the China National Aero-Technology Import & Export Corporation, for links to arms sales to Iran and Syria.
The Wisconsin Project report also states that Shanghai Hua Hong NEC Electronics is majority owned "through a corporate chain" by the China Electronics Corporation, which the report says is a government conglomerate that produces military equipment along with consumer electronics. The report claims it has a unit that produces arms for the military.