25 January 2002
Text: China -- Nonproliferation Sanctions Imposed on Chinese Entities
(January 25 State Department statement) (590)
Following is the text of a question taken at the January 25 regular
State Department briefing on sanctions imposed on two Chinese
companies and one individual for transferring sensitive equipment and
technology to Iran. An answer was posted later in the day.
(begin text)
U.S. DEPARTMENT OF STATE
Office of the Spokesman
For Immediate Release
January 25, 2002
Taken Question for January 24, 2002
Daily Press Briefing
China: Sanctions Imposed on Chinese Entities Pursuant to the Iran
Nonproliferation Act
Question: Can you provide details on the sanctions imposed on two
Chinese companies and one individual that have been published in the
Federal Register?
Answer: On January 16, 2002, the U.S. imposed penalties on two Chinese
companies and one Chinese national pursuant to the Iran
Nonproliferation Act of 2000. The Chinese entities are: Liyang
Chemical Equipment, China Machinery and Electric Import and Export
Company, and Q.C. Chen. (We cannot comment on whether or how Chen is
related to the two companies.)
The determination was published in the Federal Register on January 24,
2002. The penalties will remain in effect until January 15, 2004.
The penalties were imposed on the Chinese entities for the transfer to
Iran since January 1, 1999, of sensitive equipment and technology
controlled by the Australia Group (AG). The Australia Group is a
33-nation nonproliferation regime that seeks to prevent the
proliferation of chemical and biological weapons.
The law does not require imposition of penalties against the recipient
entities, so no Iranian entities are named in this determination.
The penalties imposed on the three Chinese entities are:
-- No department or agency of the U.S. Government may procure, or
enter
into any contract for the procurement of, any goods, services, or
technology from the three Chinese entities;
-- No department or agency of the U.S. Government may provide any
assistance to the three Chinese entities;
-- The three entities shall not be eligible to participate in any
assistance program of the U.S. Government;
-- U.S. Government sales of any item on the U.S. Munitions List to any
of these Chinese entities are prohibited, and sales of any defense
articles, defense services or design and construction services
controlled under the Arms Export Control Act are to be terminated;
-- New licenses are to be denied, and existing licenses suspended, for
transfer to these three entities of items controlled under the Export
Administration Act of 1979 or the Export Administration Regulations.
Although the law contains waiver provisions, we did not believe it was
appropriate to waive the penalties in this case.
Q.C. Chen is already subject to U.S. sanctions. In May 1997, he was
among seven Chinese entities sanctioned, pursuant to the Chemical and
Biological Weapons Control and Warfare Elimination Act of 1991, for
knowingly and materially assisting Iran's chemical weapons program
through the transfer of chemical weapons precursor chemicals and/or
chemical weapons-related production equipment and technology. These
sanctions currently remain in place.
For many years we have made known to the Chinese Government our
concerns about specific Chinese entities providing assistance to
Iran's chemical weapons program. Q.C. Chen has been among the entities
we have raised on multiple occasions. China was informed in advance
through diplomatic channels of our recent sanctions decision; we are
not in a position to discuss the details of our contacts on this
issue.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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