By Saabira Chaudhuri
A China-based construction company controlled by the People's
Republic of China agreed to pay $3 million and pled guilty in an
investigation of illegal exports of coatings from the U.S. to a
nuclear power plant in Pakistan, according to the U.S. Department
of Justice.
According to the justice department, China Nuclear Industry
Huaxing Construction Co.'s plea represents the first time that a
corporate entity controlled by the People's Republic of China has
pled guilty in a U.S. criminal export matter.
The department said the company's guilty plea is the result of a
long-term investigation of illegal exports of high-performance
epoxy coatings from the U.S. to the Chashma II Nuclear Power Plant
in Pakistan, which Huaxing was building as part of a nuclear
cooperation pact between the People's Republic of China and
Pakistan, and which is owned by the Pakistan Atomic Energy
Commission
Huaxing's guilty plea is related to the December 2010 guilty
plea of PPG Paints Trading (Shanghai) Co.--a Chinese subsidiary of
Pittsburgh-based PPG Industries (PPG)--which was charged with the
conspiracy to export high-performance coatings for use in the
Pakistani nuclear reactor. The parent and its subsidiary paid $3.75
million in criminal and administrative fines and more than $32,000
in restitution.
Nanjing-headquartered Huaxing, which bought the coatings for
application in the Pakistani reactor, was charged with conspiring
to violate the International Emergency Economic Powers Act and the
Export Administration Regulations.
The company has agreed to the maximum criminal fine of $2
million. The terms of Huaxing's probation will require it to
implement an export compliance and training program that recognizes
its obligation to comply with U.S. export laws. Huaxing has also
agreed to pay another $1 million immediately and be subject to
multiple third-party audits over the next five years to ensure
compliance with U.S. export laws.
-Write to Saabira Chaudhuri at
saabira.chaudhuri@dowjones.com
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