ISIS Iran Report

Chinese Firms Continue to Evade Iran Sanctions

Chinese Firms Continue to Evade Iran Sanctions photo

October 19, 2010

The Washington Post’s John Pomfret reported on October 18 that Chinese firms continue to evade Iran sanctions to supply its nuclear, missile, and military programs with needed dual-use goods.  Pomfret reports that State Department Special Advisor for Nonproliferation and Arms Control Robert J. Einhorn visited China last month to hand deliver a list containing evidence of cases involving sales of sensitive equipment to Iran’s military programs.  The U.S. administration believes that China’s weak enforcement of its export controls is to blame, rather than tacit or direct Chinese governmental authorization for the sales.  China is often seen as a transshipment point or a broker for dual-use goods ordered by Iranian military entities.

Officials said that months after a new United Nations Security Council sanctions resolution was passed last June, Chinese firms continue apace with their restricted trade to Iran.  A U.S. official cited in the Washington Post story cited recent sales of carbon fiber which could assist Iran in building more advanced gas centrifuges.  In 2008, as the Associated Press reported, a Chinese company purchased 108 pressure transducers for Iran.  These devices measure the gas pressure inside a centrifuge, and Iran uses a large quantity of them in its centrifuge plants.  Between 2006 and 2008, the United States investigated another Chinese company’s sales of missile and nuclear related materials to Iran, during which the company illegally accessed the U.S. financial system to receive payments from Iran.  (Read an ISIS study of this case here).  In 2006, a Chinese company sold European vacuum pump systems to Iran’s centrifuge program.  (Read an ISIS study of this case here).  These cases are attributed to lapses in China’s enforcement of export controls; U.S. officials are seeking China’s commitment to better prevent the transfer of goods to Iran from its territory that are banned by U.N. Security Council resolutions.       

Under the first term of George W. Bush’s administration, the United States stopped doing business with sixty-two Chinese companies suspected of selling missile technology to Iran.  According to the Washington Post article, Obama administration officials say they must balance other competing interests, such as currency revaluation, help on North Korea, and a desire to gain Chinese divestment of Iran’s energy sector, with the Iranian proliferation threat and the need to demand China’s cooperation on export controls.  The administration, however, continues to blacklist Chinese violators of U.S. export control laws.  A spokesman for the Chinese embassy indicated that the Chinese government “will investigate the issues raised by the U.S. side.” 

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