New Commerce Department Rule May Weaken U.S. Export Controls, Benefit China’s Military

WASHINGTON, D.C. – Today, Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce and Homeland Security Committees and the co-chair of the House Bipartisan Task Force on Non-Proliferation, demanded information from the Department of Commerce on a new rule which could fast-track exports of sensitive U.S. technology to companies affiliated with China’s military.

The Department of Commerce has designated five Chinese corporations as "Validated End-Users," a new designation meaning that they are allowed to import certain sensitive U.S. technologies without an export control license. Export control licenses are used to prevent diversion of such sensitive technologies to military users.

This month the non-governmental Wisconsin Project on Nuclear Arms Control reported that two of the five Chinese corporations designated as "Validated End-Users" (VEU) have significant ties to China's military-industrial complex. One of the corporations, according to the Wisconsin Project, is majority-owned, through a corporate chain, by the Chinese government.

Rep. Markey said, "Serious questions have been raised about this new Validated End-User policy, which allows certain Chinese corporations to import sensitive U.S. technologies without a license. As the Chinese economy continues to grow, it clearly holds great potential as an export market for U.S. goods. But if the VEU program results in allowing the Chinese military to improve its weapons systems with U.S. technologies, as has been reported, this program may very well need to be scrapped.

"We cannot give China's military an open pipeline to advanced U.S. technologies that have rightly been restricted. The Commerce Department needs to answer these extremely serious charges that have been leveled against the VEU program," Rep. Markey concluded.

Rep. Markey's letter to the Department of Commerce is available HERE.

The Wisconsin Project report, "In  China We Trust?: Lowering U.S. Controls on Militarily Useful Exports to China," is available at http://www.wisconsinproject.org/pubs/reports/2007/inchinawetrust.pdf.


January 29, 2008

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