China Anger Over U.S. Sanctions

July 20, 2002

WASHINGTON (CNN) -- China has insisted the U.S. reverse its decision to impose "unjustified" sanctions against Chinese companies accused of arms or technology sales to Iran.

State Department Spokesman Richard Boucher confirmed on Friday that two-year sanctions will be imposed against 10 individuals or countries for transferring to Iran equipment and technology prohibited under U.S. export control rules.

Some of the entities are Chinese, and India is also involved, a senior State Department official said.

China has reacted strongly to the sanctions, which will be imposed under the Iran-Iraq Arms Non-Proliferation Act of 1992, meant to stop Iran and Iraq from developing weapons of mass destruction.

The legislation prohibits the transfer of goods, services and technologies that could boost their ability to develop nuclear, biological or chemical weapons, or ballistic or cruise missiles.

A Chinese diplomat told CNN that the Chinese government "expresses strong dissatisfaction and opposition" to the sanctions imposed by the United States.

"The Chinese position on non-proliferation has been consistent and clear," the diplomat said.

"The proliferation of weapons of mass destruction is not in China's interest. We oppose proliferation of weapons of mass destruction."

The diplomat said that China "insists that the U.S. side change the decision to impose sanctions and lift all of the other unjustified sanctions against Chinese companies."

Increasing frustration

The response comes amid increasing frustration by the Bush administration over Beijing's inability or unwillingness to crack down on Chinese companies.

"It is an ongoing issue, it's an issue that we raise when we talk to the Chinese," Boucher said.

"Non-proliferation is one of the most important issues on our agenda."

Eight of the entities will also be sanctioned for a year under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 because the technology transfers contributed to Iran's chemical weapons program, Boucher said.

The Associated Press reports the sales, from nine Chinese firms and one from India, occurred between September 2000 and October 2001.

Boucher said he was unaware whether the Chinese government was notified about the decision -- which was made July 9 -- to impose the sanctions.

The identities of the 10 entities will be published in the Federal Register within the next few days, following a report to Congress.

Boucher said that some of the entities have been sanctioned by the United States in the past under other U.S. laws.

The penalties prohibit all departments and agencies of the U.S. government from purchasing goods, technology, or services from the companies and individuals. In addition, the U.S. government cannot provide assistance to the entities, which will also be ineligible to participate in any U.S. assistance program.

Sanctions add to list

This is the fourth time the Bush administration has sanctioned Chinese companies for export-control violations.

In May, Armenian, Chinese and Moldovan companies were sanctioned for transferring to Iran equipment and technology prohibited under the Iran Non-Proliferation Act of 2000.

In January, the State Department barred trade for two years with Liyang Chemical Equipment, China Machinery and Electric Equipment Import and Export Company for violating the Iran Non-Proliferation Act by transferring equipment and technology to Iran which could be used to make chemical weapons.

Sanctions were also imposed last September on Chinese arms manufacturers for selling missile technology to Pakistan, in violation of a 2000 arms-control agreement between the United States and China not to proliferate weapons to Islamabad.

http://www.cnn.com/2002/WORLD/asiapcf/east/07/20/us.china.sanctions/index.html