Wednesday, February 4, 2004

China has obtained military navigation technology from Boeing used on advanced U.S. missiles and warplanes that was improperly approved by the State Department, according to U.S. government officials.

The dual-use commercial-military items, known as QRS11 gyroscopic microchips, were sent to China inside the guidance systems of several Boeing 737-800 commercial jets sold to China Southern Airlines, one of several state-run Chinese airline companies.

The transfers and the U.S. government’s role in improperly allowing the exports were outlined in a letter sent in October to Secretary of State Colin L. Powell from two senior members of Congress.

“We are deeply troubled by the decision to export military items to the [Peoples Republic of China] absent the required license (and requisite non-transfer and end-user certificates) and believe such a decision is suspect on both policy and legal grounds,” Reps. Henry J. Hyde, Illinois Republican, and Tom Lantos, California Democrat, stated in the Oct. 10 letter.

Defense Department officials said the Chinese could obtain important details of guidance systems used in U.S. missiles and aircraft that could be used to counter those weapons. The Chinese also could reverse-engineer the specialty chips and use them in their own guided missiles and warplanes, the officials said.

A State Department official involved in the issue said the transfer of the chips inside Boeing 737 control systems was approved orally, without a written authorization, during a period of disruption in U.S. government operations caused by Hurricane Isabel in mid-September.

“We wanted the transfer of the aircraft to proceed on time,” the official said. “It was extremely important to Boeing that the sale of civil aircraft to China go through.”

The export also was approved by President Bush under a waiver of the ban on military-related sales to China for the 737s.

Mr. Hyde and Mr. Lantos, however, stated that the waiver still required Boeing to obtain a State Department export license and to obtain assurances from China that the chips would not be diverted to military use by the Chinese.

The State Department official said the U.S. government on Jan. 7 amended the International Traffic in Arms Regulations to ease export regulations on QRS11 chips when they are inside commercial aircraft. Additional new rules are expected to be issued next week.

The new regulations were opposed by the Pentagon, the official said, although they were approved by an administration interagency group.

Disclosure of the chip transfer comes as the Bush administration is seeking to loosen export controls on defense-related goods to several nations as part of its pro-business policies.

China, for its part, has been pushing the U.S. government to lift 1989 sanctions on arms-related sales. The sanctions were imposed after the Chinese military’s massacre of pro-democracy protesters in Beijing’s Tiananmen Square, where hundreds were killed.

The European Union, led by the French government, is considering lifting its Tiananmen sanctions on China. If that takes place, it is likely to increase pressure on the Bush administration to follow suit.

Boeing spokeswoman Amanda Landers said the company works closely with the State Department and fully complies with all export rules.

The QRS11 is known as a gyroscope on a microchip because, unlike traditional gyroscopes, it has no moving parts. In addition to its use on military and commercial aircraft, the chip also is deployed on the Mars rover and U.S. unmanned aerial vehicles.

The State Department official said that the new rules only allow the transfer of a version of the QRS11 that is less advanced than those used on more modern U.S. missiles and aircraft.

The official said that the Chinese might be able to “harvest” the QRS11 from the Boeings. However, the Pentagon has determined doing so would fail 70 percent of the time, resulting in ruining the silicon control chip, the official said.

According to the Hyde-Lantos letter, the State Department failed to require Boeing to obtain an export license for the Boeing 737-800 with the chip that was sent to China on Sept. 20. Additionally, the letter stated that the department failed to require China to sign a declaration pledging that it would not re-export the chip or divert it for military purposes.

The chips are classified as “significant military equipment” and thus require an export license before being sent to nations like China.

Mr. Hyde, who is chairman of the International Relations Committee, and Mr. Lantos, the ranking Democrat, said the State Department defended its actions in the 737 transfer because Boeing had made previous “unauthorized exports.”

The congressmen said as many as 10 Boeing aircraft were sent to China without licenses.

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