[Federal Register Volume 65, Number 9 (Thursday, January 13, 2000)]
[Notices]
[Pages 2220-2221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-836]


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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),

[[Page 2221]]

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