The State Department has imposed economic sanctions on China for its sales of missile technology, State Department officials said yesterday.
“These are the strongest sanctions we’ve ever imposed on China,” said one official, speaking on the condition of anonymity.
The sanctions were imposed on the government-run conglomerate Norinco and will ban all export licenses on controlled U.S. goods to China. That ban prohibits launches of U.S. satellites on Chinese rocket booster.
Additionally, the sanctions triggered a provision of the Arms Export Control Act that could lead to a ban on imports of a large number of Chinese goods into the United States.
All of Norinco’s products are banned from entering the United States under the new sanctions.
But more severe sanctions that cover other major Chinese companies were waived for one year and could be triggered if China continues to permit its companies to sell missiles to rogue states, said officials who spoke on the condition of anonymity.
Those sanctions could cost China “billions” of dollars in lost sales, one official said.
“These sanctions invoke the Helms amendment,” the official said. “In this case what it does is that it prevents the U.S. government from issuing any type of export license to a variety of products, including satellite launches.”
The 1991 Helms amendment to the arms-control act, named after Sen. Jesse Helms, North Carolina Republican, punishes nations with nonmarket economies, such as China, by extending sanctions to all companies.
Invoking the amendment restricts sales to the United States of all goods that could be used in building missiles, including aircraft, electronics, and space systems or equipment.
No details of the missile-related sale were made public and the identity of the missile-goods purchaser was not identified.
The sanctions were announced in public documents sent to the Federal Register that will be published in today’s edition of the official announcement bulletin.
It is the third time in four months that China was hit with sanctions for violating U.S. laws regarding the spread of weapons of mass destruction and missile-delivery systems for those weapons. Norinco also was sanctioned in May and July.
The additional sanctions are an attempt to target a company that U.S. officials have labeled a “serial proliferator” that China’s government refuses to rein in.
Norinco is one of China’s largest state-run manufacturers and U.S. officials have estimated that recent sanctions will cause the company up to $100 million in lost U.S. sales.
The weapons sanctions come amid mounting pressure from the Bush administration on China for trade and financial practices.
A CIA report to Congress released in March stated that, “Chinese entities remain key suppliers of [weapons of mass destruction] and missile-related technologies to countries of concern.”
Norinco was punished in May with stiff penalties for selling missile-related goods to Iran’s Shehid Hemmat Industrial Group, the state-owned defense contractor that builds Iran’s short- and medium-range missiles.
Norinco was caught selling specialty steel used in Iran’s missiles in October 2002. The specialty steel sale was upsetting to U.S. officials because it took place two months after Beijing announced new export regulations aimed at curbing missile-technology sales.
China’s government denied the sale took place and denounced the sanctions as an attempt to hinder China’s economic growth.
In July, Norinco and five other Chinese companies were hit with U.S. sanctions under the 2000 Iran Nonproliferation Act for selling chemical, biological and nuclear arms and missile materials to Iran.
Norinco has been identified as a China’s third-largest manufacturer and its products are distributed through numerous U.S. discount retailers.