- The Washington Times - Friday, July 26, 2002

The State Department has identified the eight Chinese companies and two men it punished with economic sanctions last week for selling arms to Iran.

The companies include several Chinese firms that have been sanctioned in the past for selling arms and related equipment to rogue states, an indication that U.S. efforts to deter China's state-run companies from dealing with states that sponsor terrorism are not working, say analysts.

State Department spokesman Richard Boucher identified the companies Wednesday night. They include:

•Jiangsu Yongli Chemicals and Technology Import and Export

•China Machinery and Equipment Import Export

•China National Machinery and Equipment Import Export

•CMEC Machinery and Electric Equipment Import and Export

•CMEC Machinery and Electrical Import Export

•China Machinery and Electric Equipment Import and Export

•Wha Cheong Tai

•China Shipbuilding Trading

Additionally, the State Department identified two men, Chinese national Q.C. Chen and Indian national Hans Raj Shiv, for their roles in the weapons sales to Iran.

The penalties, first reported by The Washington Times, were issued July 9 under the Iran-Iraq Arms Non-Proliferation Act of 1992 and the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.

Both forbid any company or person that helps either Iran or Iraq acquire chemical weapons or destabilizing advanced conventional arms from doing business with U.S. companies and the government for two years. They also ban U.S. companies from exporting goods that require U.S. government license controls to the entities.

It was the fifth time since June 2001 that the Bush administration publicly identified China's weapons-proliferation activities.

China's government has denied that it is involved in selling arms to rogue states or unstable regions.

Mr. Boucher said the sanctions were the result of the entities "knowingly and materially contributing, through the transfer of goods or technology, to the efforts of Iran or Iraq to acquire chemical weapons or destabilizing numbers and types of advanced conventional weapons."

The sanctions were imposed based on intelligence reports of sales of advanced conventional weapons to Iran. Two other cases involved sales to Iran of biological-weapons control.

One intelligence official said the conventional-arms sale that triggered the sanctions was Beijing's transfer of high-speed catamaran missile patrol boats to Iran. The boats were identified as C-14 patrol boats and are outfitted with anti-ship cruise missiles.

Short-range anti-ship missiles for the patrol boats also were sold from China to Iran in January.

The catamaran and anti-ship missile sales were first disclosed by The Washington Times in May.

China also has been working to build an advanced air-defense warning system in Iran, according to U.S. intelligence officials.

"Nonproliferation is a key issue in our bilateral relationship with the People's Republic of China, and we will continue to seek Chinese cooperation in resolving areas of concern," Mr. Boucher said.

Talks with Chinese officials aimed at getting Beijing's cooperation to halt the arms sales have not produced any results, U.S. officials said. China's government had promised to adopt new export controls but refused to implement new rules because of recent U.S. sanctions.

Mr. Boucher said it was the first time sanctions have been imposed by the State Department under the Iran-Iraq act since its passage in 1992.

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