The United States imposed economic sanctions on five Chinese individuals, two Chinese companies and one company based in Hong Kong, for aiding Iran's quest to develop chemical weapons. Secretary of State Madeleine Albright announced the sanctions during a May 22 subcommittee hearing of the Senate Appropriations Committee, admitting that the administration's efforts to prevent such transfers have been, "far from perfect." A senior administration official said the sanctions decision followed years of dialogue with China about the transfer of dual-use chemical precursors and production equipment by Chinese enterprises.
Applied under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, which prohibits the export of chemical weapons and related equipment to terrorist nations, including Iran, the sanctions will affect an estimated $2 million in annual trade with these entities. The policy will be reviewed after one year to determine whether to extend or remove sanctions.
The Nanjing Chemical Industries Group and the Jiangsu Yongli Chemical Engineering and Technology Import/Export Corporation, in a May 23 statement, called the charges, "absolutely drawn from the air" and said the sanctions were "a brutal intervention in normal international trade and commercial activities." Albright said there is "no evidence that the Chinese government was involved." China and Iran, both Chemical Weapons Convention signatories, denied the allegations in separate statements.