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[Federal Register: January 13, 2000 (Volume 65, Number 9)] [Notices] [Page 2220-2221] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr13ja00-118]

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DEPARTMENT OF STATE

Office of Defense Trade Controls [Public Notice 3195]

Munitions Exports Involving China National Aero-Technology Import and Export Corporation (CATIC), China National Aero-Technology International Supply Company, CATIC (USA), Inc., Tal Industries, Inc., Yan Liren and Hu Boru (Employees of CATIC), McDonnell Douglas Corporation, Douglas Aircraft Company, and Robert Hitt (Employee of McDonnell Douglas and Douglas Aircraft)

AGENCY: Department of State.

ACTION: Notice.

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SUMMARY: Notice is hereby given that it shall be the policy of the Department of State to deny all export license applications and other requests for approval pursuant to section 38 of the Arms Export Control Act, that request authorization for the export, the brokering activity involving, the transfer by, for or to, or transactions that involve directly or indirectly by or to: China National Aero-Technology Import and Export Corporation (CATIC), China National Aero-Technology International Supply Company, CATIC (USA) Inc., Tal Industries, Inc., Yan Liren, Hu Boru, McDonnell Douglas Corporation, Douglas Aircraft Company, and Robert Hitt, and any of their subsidiaries, affiliates, or successor entities in connection with the transactions involving defense articles or defense services. This policy also precludes the use in connection with such entities of any exemptions from license or other approval included in the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130) except as those exemptions directly pertain to licenses or other written approvals granted prior to October 19, 1999.

EFFECTIVE DATE: October 19, 1999.

FOR FURTHER INFORMATION CONTACT: Mary F. Sweeney, Acting Chief, Compliance and Enforcement Branch, Office of Defense Trade Controls, Department of State (703 875-6644, Ext. 3).

SUPPLEMENTARY INFORMATION: A sixteen count indictment was returned on October 19, 1999, in the U.S. District Court for the District of Columbia, charging China National Aero-Technology Import and Export Corporation, China National Aero-Technology International Supply Company, CATIC (USA) Inc., Yan Liren, Hu Boru (employees of CATIC),

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McDonnell Douglas Corporation, Douglas Aircraft Company, and Robert Hitt (employee of McDonnell Douglas and Douglas Aircraft), with conspiring (18 U.S.C. 371) to violate and violating Section 11 of the Export Administration Act (50 U.S.C. 2401-2420); aiding and abetting (18 U.S.C. 2); making false statements (18 U.S.C. 1001); and violating the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) regarding details of a 1994 sale of American machining equipment, some of which was diverted to a Chinese military site. The indictment charges the defendants with making material false, fraudulent and misleading statements and material omissions on the applications, and end user certificates upon which the Department of Commerce granted 10 export licenses to McDonnell Douglas and Douglas Aircraft permitting the export of 13 pieces of machinery that bend and shape steel for aerospace products to the People's Republic of China (PRC), for use by a PRC owned company called China National Aero-Technology Import and Export Corporation (CATIC). The defendants, CATIC and TAL caused six of the 13 pieces of machinery to be diverted to an unauthorized end-user in Nanchang, PRC, known for military production. (United States v. China National Aero-Technology Import and Export Corporation, et al.,) U.S. District Court for the District of Columbia, Criminal Docket No. 1:99-CR-00353).

Note: Commercial exports from the United States of certain equipment that could make a significant contribution to the technology and military potential of other countries is governed by the Export Administration Act of 1979, 50 U.S.C. App. sections 2401- 2420 and the Export Administration Regulations, 15 C.F.R. Parts 768- 799. Although the Export Administration Act expired August 20, 1994, the implementing regulations, the Export Administration Regulations, were continued in effect pursuant to Executive Order.

On October 19, 1999, the Department of State instituted a policy of denial of all requests for licenses and other written approvals (including all activities under manufacturing license and technical assistance agreements and brokering activities) concerning exports of defense articles and provision of defense services, by, for or to, or other transactions involving directly or indirectly, the above-named defendants and any of their affiliates, subsidiaries, or successor entities. Furthermore, the Department precluded the use in connection with those defendants of any exemptions from license or other approval included in the ITAR except as those exemptions directly pertain to licenses or other written approvals granted prior to October 19, 1999.

This action has been taken pursuant to sections 38 and 42 of the Arms Export Control Act (AECA) (22 U.S.C. 2778 and 2791) and 22 CFR 126.7(a)(2) and 126.7(a)(3) of the ITAR. It will remain in force until rescinded.

Exceptions may be made to this denial policy on a case-by-case basis at the discretion of the Office of Defense Trade Controls. However, such an exception will be granted only after a full review of all circumstances, paying particular attention to the following factors: whether an exception is warranted by overriding U.S. foreign policy or national security interests; whether an exception would further law enforcement concerns; and whether other compelling circumstances exist which are consistent with the foreign policy or national security interests of the United States, and which do not conflict with law enforcement concerns.

A person indicted for violating or conspiring to violate the Export Administration Act or International Emergency Economic Powers Act may submit a written request for reconsideration of the denial policy to the Office of Defense Trade Controls. Such request for reconsideration should be supported by evidence of remedial measures taken to prevent future violations of the AECA and/or the ITAR and other pertinent documented information showing that the person would not be a risk for future violations of the AECA and/or the ITAR. The Office of Defense Trade Controls will evaluate the submission in consultation with the Departments of Treasury, Justice, and other necessary agencies. After a decision on the request for reconsideration has been made by the Assistant Secretary for Political-Military Affairs, the requester will be notified whether the exception has been granted.

Dated: January 3, 2000.

Eric D. Newsom, Assistant Secretary, Bureau of Political-Military Affairs, Department of State. [FR Doc. 00-836 Filed 1-12-00; 8:45 am] BILLING CODE 4710-25-U

-- Hokie (Hokie_@hotmail.com), January 14, 2000