New York Times: The Bush administration imposed penalties this month against some of China’s largest companies for aiding Iran’s efforts to improve its ballistic missiles. The move is part of an effort by the White House and American intelligence agencies to identify and slow important elements of Iran’s weapons programs. The White House made no public announcement of the penalties, and the State Department placed a one-page notice on page 133 of The Federal Register early this month listing eight Chinese companies affected. New York Times
By DAVID E. SANGER
WASHINGTON – The Bush administration imposed penalties this month against some of China’s largest companies for aiding Iran’s efforts to improve its ballistic missiles. The move is part of an effort by the White House and American intelligence agencies to identify and slow important elements of Iran’s weapons programs.
The White House made no public announcement of the penalties, and the State Department placed a one-page notice on page 133 of The Federal Register early this month listing eight Chinese companies affected. The notice kept classified the nature of the technology they had exported.
Since the Federal Register announcement, the penalties have been noted on some Web sites that concentrate on China and proliferation issues.
President Bush has repeatedly praised China for its help in seeking a diplomatic end to the North Korean nuclear standoff. Some officials in the administration speculated in the past week that the decision not to publicize the penalties might have been part of an effort not to jeopardize Chinese cooperation at a critical moment in the administration’s effort to bring North Korea back to the negotiating table.
China has repeatedly vowed to curb its sales of missile technology, starting with an agreement with the first Bush administration in 1992, and expanded with the Clinton administration in 2000.
But two of the largest companies cited in the State Department’s list, China Great Wall Industry Corporation and China North Industry Corporation, known as Norinco, have been repeatedly penalized for more than a decade; each is closely linked to the Chinese military.
A third company on the penalties list, the China Aero-Technology Import and Export Corporation, or Catic, is one of the country’s largest producers of military aircraft and was accused of diverting to military use sophisticated machine tools bought from McDonnell Douglas. Eighteen months ago, a senior State Department official, Paula A. DeSutter, referred to several of the companies as part of China’s “serial proliferator problem,” and told a Congressional commission on relations between the United States and China that although the Chinese government had often repeated its opposition to missile proliferation, “the reality has been quite different.”
In the 1990’s, Republicans in Congress began a series of investigations into China’s efforts to obtain American nuclear technology and to export missile and nuclear expertise to Pakistan, Iran and possibly other nations. At the time, they sharply criticized the Clinton administration, accusing it of playing down Chinese offenses. Bush administration officials, when asked about the penalties over the past week, said nothing was particularly notable about the latest violations and that no evidence suggested that China’s leadership was aware of the sales.
One senior American official said the transactions took place “within the past year or 18 months,” or well after the last American penalties were announced on Chinese sales to Iran, in July 2003.
American officials said the list of exports to Iran was classified, but they described them as high-performance metals and components that are banned under the Iran Nonproliferation Act of 2000 because they could aid the country’s efforts to extend the range of its missile fleet. It was unclear whether some of the technology was “dual use,” meaning that it could be used for civilian or military purposes.
Iran’s efforts to develop longer-distance missiles that are capable of ever larger payloads are increasingly of concern among intelligence officials. American officials have charged that Iran is trying to develop nuclear warheads, which its leadership denies.
“We suspect that the Iranians also have the Chinese bomb design,” a former senior American official said several months ago, referring to a design that Abdul Qadeer Khan, the Pakistani nuclear scientist, acquired from China, sold to Libya and was suspected of peddling elsewhere. “What everyone is looking for is the missile that matches up with the design.”
American intelligence agencies are focusing much energy, officials say, on identifying major sites for Iran’s nuclear and missile programs. That information is collected, in part, to plan for possible military strikes, though President Bush has repeatedly said he is focusing on diplomacy to disarm Iran.
Still, Mr. Bush has also repeatedly said he would never summarily rule out any option in a crisis. In an interview broadcast Monday night by NBC News, when asked about using military action in Iran, he said, “I hope we can solve it diplomatically, but I will never take any option off the table.”
In an article in The New Yorker this week, titled “The Coming Wars,” Seymour M. Hersh reports that “the administration has been conducting secret reconnaissance missions inside Iran at least since last summer.”
He continued: “Much of the focus is on the accumulation of intelligence and targeting information on Iranian nuclear, chemical and missile sites, both declared and suspected. The goal is to identify and isolate three dozen, and perhaps more, such targets that could be destroyed by precision strikes and short-term commando raids.”
Administration officials said intelligence agencies had long worked to identify those sites, but they denied that more consideration was being given to striking those sites.
“That’s not the plan,” a senior official said. “In fact, a lot of energy is going into trying to keep the Israelis from getting ideas along those lines.”
For now, some of the American intelligence is being provided to the International Atomic Energy Agency to spur it to conduct investigations in Iran. Last week, inspectors visited one such military site, called Parchin, where the United States says work may be under way to develop a nuclear warhead.
Although the agency took soil samples to determine whether nuclear materials had been present at the site, it has no jurisdiction over missile work, or any authority to enforce the Missile Technology Control Regime, a voluntary international agreement that regulates the sale of missile components and designs. Many of Iran’s missiles are based on North Korean designs, and one North Korean company, Paeksan Associated Corporation, was penalized, with the eight Chinese companies. The penalties bar the companies from doing business with the United States government, and prevent them from obtaining export licenses allowing them to buy controlled technologies from American companies. Some of the penalized Chinese companies do little or no business with the United States, but Norinco, a maker of handguns and assault weapons, does millions of dollars of business here, and other companies are constantly in search of American technology.
Some American businesses have argued that the penalties are often self-defeating, contributing to the huge trade gap with China but doing little to deter Chinese companies from exporting nuclear, chemical or missile technology to nuclear aspirants like Iran.
A senior administration official, asked about the penalties, said Monday in an interview that the Chinese “are moving in the right direction generally” on proliferation and have stopped some exports to North Korea, including a chemical that could be used in reprocessing spent nuclear fuel into weapons.
But the official, who spoke on the condition of anonymity because the subject included intelligence matters, said that “while they are helping us on North Korea, they have not been as helpful on Iran,” perhaps because of China’s ever expanding need for oil and other energy sources.
President Bush, the official said, was trying to make the point to Chinese officials that their companies “are not going to be able to sustain the patterns of trade needed for strong economic growth and continued inward investment” in China if they are repeatedly penalized for aiding Iran.
But evidence is slight that previous penalties have seriously impeded the growth of the Chinese companies. In her testimony to the China commission, Ms. DeSutter, the senior State Department official, argued that Beijing’s nonproliferation commitments of 1992, 1994, 1998, 2000 and, most recently, a specific set of export control rules issued by China in 2002 “occurred only under the imminent threat, or in response to the actual imposition, of sanctions.”