Page 2 of 2 China hawks target US sign-off shuffle
By Peter J Brown
Before everyone is left with the impression that Ruppersberger and others might
be on the verge of breaking down the walls that have kept space sector
companies in the US and in many other countries from doing business with China,
a dose of reality is in order. This is provided by the US Attorney's Office in
Boston.
"Three nationals of the People's Republic of China and two corporations were
charged on October 1, 2009, in federal court with conspiring over a period of
10 years to illegally export defense articles, designated on the United States
Munitions List, and Commerce-controlled electronics components to end-users in
China, including several Chinese military entities," said a release issued by
this office.
Named in this case are Zhen Zhou Wu, aka Alex Wu; Yufeng Wei, aka Annie Wei; Bo
Li, aka Eric Lee; Massachusetts-based
Chitron Electronics, Inc (Chitron-US); and Shenzen Chitron Electronics Co Ltd.
(Chitron-Shenzhen). All were charged in a 38-count indictment with "conspiring
to violate US export laws including the Arms Export Control Act and Export
Administration Regulations, illegally exporting defense articles and
Commerce-controlled electronics to China, money laundering, and causing false
Shipper's Export Declarations to be filed with the US Department of Commerce".
What leaps out immediately is the fact that the destination for the illegally
exported items in question was the Shanghai Academy of Spaceflight Technology,
"an organization which is designated on the US Department of Commerce's Entity
List [according to the indictment, organizations listed on the Entity List are
subject to specific license requirements due to US national security
interests]". This Chinese institution "conducts research for the development
of, and manufactures, tactical missiles, carrier rockets, space launch
vehicles, and satellites", according to the release.
In 1996, Alex Wu founded Chitron-Shenzhen in China, then roughly two years
later established Chitron-US in the US. All three people named here allegedly
"ordered US military products and Commerce-controlled electronic components
from US companies for end-users in mainland China".
Parts and equipment flowed through Chitron-US, where the items were
"consolidated into packages, which were exported on a weekly basis to mainland
China using freight forwarders in Hong Kong without obtaining the required
export licenses from the Department of State and Department of Commerce".
What is most alarming is that, "by 2007, according to Wu, Chinese
military-related institutions (including research institutes) in electronics
and aerospace comprised 25% of Chitron-Shenzhen customers".
All three, who were arrested in late 2008, are facing possible 20-year jail
sentences and fines of up to $1 million.
Be mindful that all the details contained in the indictment detailed in the
release are simply allegations. The defendants are presumed to be innocent
unless and until proven guilty beyond a reasonable doubt in a US court.
What emerges here is a very dark cloud that now hangs over all the upbeat talk
that there are long-awaited signs of progress appearing in Washington, DC.
The notion that Chinese military personnel were provided with a US-based mail
order house that shipped items on a weekly basis back to China while operating
completely under the radar of the US defense and law enforcement communities
for a decade is baffling. Nor does it does bode well especially for those
supporters of reform who argue that existing export controls and customs
oversight are adequate to meet the additional workload that any meaningful
export regulatory reform will certainly trigger.
In a nutshell, customs and law enforcement agents in the US face a significant
challenge as they attempt to monitor outbound technology transfers and
terminate the actions of those who traffic in illegal exports.
The effects of this case will soon be magnified by the sentencing next month of
Dongfan "Greg" Chung, who could spend the rest of his life in prison. A former
Boeing employee, Chung was arrested in late 2008 and charged with providing
classified information to the Chinese about the space shuttle and rocket
technology.
"One likely sub-agenda to President Obama's September 29 decision to delegate
missile and space export control powers to the Commerce Department is the
desire to clear the legal books to begin manned space cooperation with China.
On both counts, shifting export control authority back to Commerce, and
beginning manned space cooperation with China, the administration is courting
disaster," said Richard Fisher, senior fellow at the International Assessment
and Strategy Center in Washington DC.
The People's Liberation Army's General Armaments Department has and will
continue to control all aspects of China's manned space program, said Fisher.
He is concerned that in starting any level of manned cooperation in space with
China, the US will end up ignoring China's manned military space ambitions.
"Quite simply, even seemingly benign or even humanitarian assistance like
helping China make a better space toilet will also be helping to make a better
Chinese military space station," said Fisher. "In the 1990s, the US learned the
hard way that China is willing and able to use its allies in the American
system to weaken its protection of critical aerospace technology and to then
use American aerospace technologies to advance Chinese military-space
capabilities."
In addition, Fisher describes the US Congress as "well within its rights to
place a special burden of proof on Commerce Secretary Gary Locke and demand
that he explain in detail how he is going to ensure that any revival of the
sale of dual-use space technologies to China will not result in increased
Chinese military threats to Americans".
"After all, in the 1990s, Locke had to return campaign contributions from
[alleged Chinese agent] John Huang himself, and then went on to make the
promotion of US-China commerce the centerpoint of his career," said Fisher.
"There is absolutely no reason to in any way relax US export control vigilance;
the weight of recent history shows that China is hard at work to build military
space combat capabilities and has no desire to truthfully reveal its aims or
limit them by any verifiable means."
Fisher's concerns are addressed in a very direct fashion by Kerry Scarlott, a
partner with the Boston-based law firm of Posternak Blankstein and Lund LLP and
who is a top expert on US export control policies.
"The president's order does not effect any substantive change. It only
delegates a Congressional reporting obligation within the Executive Branch,
from the president to the Department of Commerce. It does not change licensing
requirements with respect to exports of missiles or satellites, which remain
firmly subject to licensing by the DDTC" she said.
"It is worth noting that legislation will be required to return licensing
jurisdiction over commercial satellites to the Department of Commerce. The
shift cannot be accomplished by executive fiat. What the president's order does
potentially portend is a willingness to consider future significant export
control reform."
Peter J Brown is a satellite journalist from the US state of Maine.
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