The US government has indicted aerospace giant McDonnell Douglas, now part of Boeing Co, and one of China's largest government-owned companies on charges of conspiring to divert sophisticated machine tools for Chinese military use.
Also named in the 16-count indictment were two Chinese nationals employed by China's National Aero-Technology Import Export Corp, known as Catic, and the director of McDonnell Douglas's China program office.
US officials called it an important case, the first time a Chinese government entity has been indicted for violating US export laws, and said it also would send a strong message to US companies that violations would not be tolerated.
In Seattle, Boeing strongly denied McDonnell Douglas had committed any crime and vowed to fight the charges in court.
The indictment alleged the defendants made false and misleading statements and key omissions about the export by McDonnell Douglas to the Chinese company in 1994 and 1995 of 13 pieces of state-of-the-art equipment that were supposed to be used to build commercial aircraft parts.
McDonnell Douglas had failed to tell US government officials when getting export licenses that the Chinese company had expressed an interest in buying some of the equipment for use at a military project in Nanchang, China, where Silkworm missiles and A-5 attack aircraft were made, the government charged.
The indictment alleged that Catic caused six of the 13 pieces of equipment to be diverted from Beijing to the military factory in Nanchang.
"What today's indictment demonstrates is that US customs agents ... found clear and convincing evidence that Catic and McDonnell Douglas knowingly diverted sensitive technology for Chinese military use. This is an unprecedented case," US Customs Commissioner Raymond Kelly said.
Bonnie Tischler, assistant commissioner for investigations at the US Customs Service, said at a news conference outside the federal courthouse that the indictment was significant because of the message sent to US corporations.
"In the end, firms that sacrifice American security for profit must pay a price," she said. "Even before the equipment left American soil, both firms knew it was military bound."
The two companies face fines up to US$10 million and the individuals -- Chinese nationals Hu Boru and Yan Liren and Robert Hitt of McDonnell Douglas -- could be sent to prison for up to five years if convicted.
The equipment, which is used to bend and shape steel for aerospace products, had been used at a plant in Columbus, Ohio, that McDonnell Douglas decided to close in the early 1990s.
The indictment alleged that McDonnell Douglas failed to tell the US Commerce Department's about Catic's initial inquiry about using the equipment for military use and that it had been inspected by officials from the Nanchang factory.
In a statement, Boeing said: "It is unfortunate that the prosecutors have apparently not taken the time to learn the facts and gain a full understanding of a rather complicated matter."
In a detailed background paper giving a chronology of the case, Boeing said the prosecutors had no evidence that anyone at McDonnell Douglas intentionally made false or misleading statements related to the sale.
Instead, the company said, prosecutors were relying on circumstantial evidence and a theory of "conscious avoidance," holding that McDonnell Douglas collectively should have known the machine tools would be used for military purposes rather than in connection with a commercial aircraft program.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
‘MISGUIDED EDICT’: Two US representatives warned that Somalia’s passport move could result in severe retaliatory consequences and urged it to reverse its decision Minister of Foreign Affairs Lin Chia-lung (林佳龍) has ordered that a special project be launched to counter China’s “legal warfare” distorting UN Resolution 2758, a foreign affairs official said yesterday. Somalia’s Civil Aviation Authority on Wednesday cited UN Resolution 2758 and Mogadishu’s compliance with the “one China” principle as it banned people from entering or transiting in the African nation using Taiwanese passports or other Taiwanese travel documents. The International Air Transport Association’s system shows that Taiwanese passport holders cannot enter Somalia or transit there. The Ministry of Foreign Affairs (MOFA) protested the move and warned Taiwanese against traveling to Somalia or Somaliland
RSS