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.
FIREPOWER: On top of the torpedoes, the military would procure Kestrel II anti-tank weapons systems to replace aging license-produced M72 LAW launchers Taiwan is to receive US-made Mark 48 torpedoes and training simulators over the next three years, following delays that hampered the navy’s operational readiness, the Ministry of National Defense’s latest budget proposal showed. The navy next year would acquire four training simulator systems for the torpedoes and take receipt of 14 torpedoes in 2027 and 10 torpedoes in 2028, the ministry said in its budget for the next fiscal year. The torpedoes would almost certainly be utilized in the navy’s two upgraded Chien Lung-class submarines and the indigenously developed Hai Kun, should the attack sub successfully reach operational status. US President Donald Trump
TPP RALLY: The clashes occurred near the Chiang Kai-shek Memorial Hall on Saturday at a rally to mark the anniversary of a raid on former TPP chairman Ko Wen-je People who clashed with police at a Taiwan People’s Party (TPP) rally in Taipei on Saturday would be referred to prosecutors for investigation, said the Ministry of the Interior, which oversees the National Police Agency. Taipei police had collected evidence of obstruction of public officials and coercion by “disorderly” demonstrators, as well as contraventions of the Assembly and Parade Act (集會遊行法), the ministry said in a statement on Sunday. It added that amid the “severe pushing and jostling” by some demonstrators, eight police officers were injured, including one who was sent to hospital after losing consciousness, allegedly due to heat stroke. The Taipei
NO LIVERPOOL TRIP: Taiwan’s Lin Yu-ting, who won a gold medal in the boxing at the Paris Olympics, was embroiled in controversy about her gender at that event Taiwanese boxer Lin Yu-ting (林郁婷) will not attend this year’s World Boxing Championships in Liverpool, England, due to a lack of response regarding her sex tests from the organizer, World Boxing. The national boxing association on Monday said that it had submitted all required tests to World Boxing, but had not received a response as of Monday, the departure day for the championships. It said the decision for Lin to skip the championships was made to protect its athletes, ensuring they would not travel to the UK without a guarantee of participation. Lin, who won a gold medal in the women’s 57kg boxing
The US has revoked Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing its production capabilities at that older-generation facility. American officials recently informed TSMC of their decision to end the Taiwanese chipmaker’s so-called validated end user (VEU) status for its Nanjing site. The action mirrors steps the US took to revoke VEU designations for China facilities owned by Samsung Electronics Co and SK Hynix Inc. The waivers are set to expire in about four months. “TSMC has received notification from the US Government that our VEU authorization for TSMC Nanjing
RSS