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U.S. Imposes Sanctions on China, North Korea
In July, Paula DeSutter, U.S. assistant secretary of state for
verification and compliance, testified that China has so far failed
to implement and enforce acceptable export controls. Meanwhile,
the United States imposed sanctions on five Chinese companies for
exporting materials that could be used for producing weapons of
mass destruction or missiles.
DeSutter told the U.S.-China Economic and Security Review Commission—an
advisory body that reports to Congress—during a July 24 hearing
that China is not doing enough to enforce its missile nonproliferation
commitments. The State Department has repeatedly accused Chinese
state-owned companies of transferring missile technology to countries
such as Pakistan, Iran, North Korea, and Libya. China often defends
the companies, denying the alleged proliferation activities occurred.
In 2002, China issued new export control laws aimed at curbing the
spread of biological and chemical weapons technology and missiles
and related technologies. (See ACT, November 2002.) DeSutter, however,
said that China is not living up to the commitment it has made on
paper. China is not properly enforcing its borders, and “it
must establish a system of end-use verification checks to ensure
that items approved for transfer are not diverted,” she stated.
Meanwhile, on July 3 the United States imposed sanctions on one
North Korean and five Chinese companies for exporting materials
to Iran that could be used for weapons of mass destruction programs.
According to the sanctions, the exports occurred during the first
half of 2002. The sanctions, imposed pursuant to the Iran Nonproliferation
Act of 2000, took effect June 26 and will last for two years. The
sanctions limit the dealings that these entities may have with the
United States.
Additionally, the North Korean company—Changgwang Sinyong Corporation—was
sanctioned July 25 pursuant to the 1976 Arms Export Control Act
and the 1979 Export Administration Act (EAA); those sanctions last
three years and eight months. Five days later, sanctions were also
placed, for an indefinite period of time, on China Precision Machinery
Import/Export Corporation (CPMIEC), pursuant to Executive Orders
12938 and 13094.
In addition to CPMIEC, the Chinese firms affected are Taian Foreign
Trade General Corporation, Zibo Chemical Equipment Plant, Liyang
Yunlong Chemical Equipment Group Company, and China North Industries
Corporation (NORINCO). All of these companies, except Taian Foreign
Trade General, are already under sanctions for previous nonproliferation
violations.
The State Department refused to provide further details regarding
the transfers these companies made that violated the Iran Nonproliferation
Act. The sanctions imposed under the act prohibit the U.S. government
from purchasing goods or services from and providing assistance
to these entities. All sales of goods on the U.S. Munitions List
or other defense-related materials and services to these entities
are also prohibited. Additionally, any existing export licenses
for the transfer of dual-use material to sanctioned entities are
suspended, and no new licenses may be granted.
The State Department’s additional sanctions on the North Korean
firm reflect its alleged transfer of Scud missiles to Yemen in December
2002. (See ACT, January/February 2003.) These latter sanctions are
similar to those imposed under the Iran Nonproliferation Act but
also ban the importation of products produced by the sanctioned
company into the United States. In addition, because North Korea
has “a non-market economy that is not a former member of the
Warsaw Pact,” the Helms amendment to the EAA extends these
sanctions to the North Korean government. The sanctions have little
effect, however, because North Korea conducts negligible trade with
the United States.
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