China state-controlled nuclear company pleads guilty to illegal exports to Pakistan
Nuclear Industry Huaxing Construction Co., Ltd.,
("Huaxing"), a company with links to the
Chinese government, has pleaded guilty in the US to export control
violations. It is probably the first occasion where such a company
has done so. Huaxing was ordered to pay a criminal and
administrative fine of more than USD 3 million.
The fine comes after an investigation of illegal exports of high-performance epoxy coatings to the Chashma II Nuclear Power Plant in Pakistan. The plant is owned by the Pakistan Atomic Energy Commission ("PAEC"), an entity on the U.S. Department of Commerce's Entity List. The investigation was led by the U.S. Department of Commerce's Bureau of Industry and Security.
Huaxing agreed to the maximum criminal fine of USD 2 million, USD 1 million of which will be stayed pending its completion of five years of corporate probation. Huaxing is required to implement an export compliance and training program to comply with US export laws. Huaxing will also pay an administrative fine of USD 1 million as part of an agreement with the U.S. Department of Commerce and be subject to multiple third-party audits over the next five years to ensure the efficacy of its compliance with US export laws.
Former MD of PPG Paints Trading sentenced for conspiring to illegal export
A former managing director of PPG Paints Trading Co., Ltd., was
sentenced to a year in prison for conspiracy and violating the U.S.
International Emergency Economic Powers Act. The former MD
was also ordered to pay a USD 100,000 fine and to perform 500 hours
of community service. In 2011 she also settled an administrative
proceeding brought by the U.S. Department of Commerce regarding the
same subject matter as her criminal case. She agreed to pay a
civil penalty of USD 200,000 with another USD 50,000 payment
suspended. She will be placed on the Denied Persons list for a
period of five years with an additional five years suspended, and
will be prohibited from directly or indirectly participating in any
transaction involving a commodity, software or technology exported
or to be exported from the US that is subject to Department of
Commerce regulations.
In both cases, the former MD is accused of conspiring to export, re-export, and trans-ship high-performance epoxy coatings to the Pakistani Cashma II Nuclear Power Plant. The PAEC, and also its subordinate nuclear reactors and power plants, are on the list of prohibited end-users under the Export Administration Regulations. A restricted end-user, to re-export or trans-ship any items subject to the U.S. Export Administration Regulations, would first need to obtain a licence from the U.S. Department of Commerce.
Singapore nationals extradited from Singapore to US in connection with plot to illegal export
Two Singapore nationals have been arrested by Singaporean authorities and extradited to the US to stand trial in connection with an alleged fraud conspiracy involving the unlawful export of 55 military antennas from the US to Singapore and Hong Kong. The defendants are accused of conspiracy to defraud the US by violating the U.S. Export Administration Regulations. If convicted, they could face a potential sentence of five years in prison.
According to the indictment, both men allegedly conspired to defraud the US by causing a total of 55 cavity-backed spiral antennas and biconical antennas to be illegally exported from a Massachusetts company to Singapore and Hong Kong without the required licence. These military antennas are controlled for export as US munitions and are used in airborne and shipboard environments. According to the indictment, the defendants have conspired to undervalue the antennas to circumvent US regulations on the filing of shipper's export declarations to the US government and used false names and front companies to obtain the antennas illegally from the US.
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