China’s government backed companies specialize in going around U.S. trade sanctions.
Many Chinese manufacturers of consumer products are so obsessed with shoveling products out the door that they cut dangerous corners in order to keep their selling prices down. First it was lead in children’s toys. Then faulty materials in wallboard that made several hundred U.S. homes uninhabitable because of mold and noxious odors. More recently it has been deadly cadmium in children’s jewelry. Why do Chinese manufacturers use toxic materials in their products? It’s cheaper.
After outcries in the United States, China’s biggest market, its government usually punishes one or two offending manufacturers and vows it will make more and better inspections in the future.
It turns out that Chinese corner-cutting isn’t restricted to consumer products. Some Chinese industrial manufacturers and trading companies, owned by the government, have devised an elaborate shell game to bypass U.S. sanctions. These sanctions, in place for more than three years, prohibit U.S. companies from importing products from foreign firms that sell missile technology to Iran. One of them, China Precision Machinery Import-Export Corp. (CPMIEC), has managed to skirt the sanctions with approximately 300 sales into the U.S. since the ban went into affect in 2006.
As reported by the Wall Street Journal, according to the Wisconsin Project on Nuclear Arms Control, a non-profit watchdog group which uncovered the shipments — from toys, oil drainage tanks, and anchors to auto parts — CPMIEC is one of several Chinese firms skirting the U.S. sanctions. The caseload requiring enforcement of 20 U.S. sanctions has becomes so heavy that it threatens to swamp the Treasury Department’s Office of Foreign Assets Control, which is in charge of the process.
The Wisconsin Project, in its report, notes that CPMIEC and others create shell subsidiaries to act as export brokers and shippers. U.S. companies receiving the goods usually don’t realize a sanctioned company is behind the sale. For example, the American Forge & Foundry Co. received some oil drainage tanks from China JMM Import & Export Shanghai Pudong Corp., which at the time was not on any sanction list. It was only recently discovered that this firm has the same address as a CPMIEC subsidiary. It was, in effect, a sort of corporate doppelganger.
Although many U.S. companies make use of software intended to detect names of exporters subject to sanctions, JMM China didn’t show up when a U.S. manufacturer purchased some lawn-mower parts from a firm that used JMM China as export broker. Chinese companies that want to skirt the U.S. sanctions are adept at creating new subsidiaries and altering names of some on the taboo list.
The Chinese government. predictably, objects to trade sanctions by the U.S., using meaningless comments such as this one from a Ministry of Foreign Affairs spokeswoman, according to the Wall Street Journal, “This kind of mistaken practice…damages the atmosphere for Sino-American cooperation on nonproliferation and is not beneficial to promoting international nonproliferation efforts.” How so?
China plays dog in the manger over United Nations sanctions on Iran by threatening a veto in the Security Council. Why does it do this when the danger of Iran developing nuclear weapons — with the threat they pose — comes closer by the day? It’s simple. Iran is a major customer of China. And, for the Chinese government, in its frenetic effort to keep economic growth at a high pace, trade trumps long-range security. Meanwhile, Treasury’s OFAC is one regulatory agency that could use more money and more agents.
(Mr. Hannaford is a member of The Committee on the Present Danger.)
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?